When the stock market turns volatile, people take a second look at fixed-rate investments, including certificates of deposit. In a bull market, the CD may seem like just about the most unattractive investment choice out there. But during downturns, those who own CDs can be thankful for their cautiousness.

A classic interim investment?

Often, people choose to put money in a CD when they are “between investments” – that is, as they move a portion of their assets out of the market or a market sector for the short-term. While leaving the stock market altogether is a laughable and ill-advised idea for the serious, committed investor, most CDs are FDIC-insured and thereby offer safety of principal (up to $100,000) along with a guaranteed rate of return.

A CD is certainly a commitment: you can’t pull the money out of one until the end of the specified term. (If you need to withdraw your money, you’ll almost always pay an early withdrawal penalty.) You also want to find a CD that offers returns sizable enough to keep ahead of inflation and taxes. With interest rates still near historic lows, it may be tough to find attractive rates.

The tradeoff of a CD is easily expressed. We all want CDs with higher rates of return, but this usually means CDs with longer periods until maturity. The longer the wait, the longer the investor goes without access to those funds, and the greater the potential opportunity cost of not assigning those assets to an investment that might perform better.

What About Index-linked CDs?

Some CDs offer you the chance to earn stock-market like returns. As the term implies, index-linked CDs are linked to the performance of a particular stock index. Often, they will match 90-100% of the return generated by an index, and some offer guaranteed minimum returns regardless of how the linked index performs over the term of the CD.

Should you move money into a CD?

For the short-term, given this challenging market, it is an option to consider for a portion of your money. Far too many retirees put their full nest egg in CDs which is often a very costly mistake in the long run. Before you make a move to a CD, be sure to speak to a qualified financial advisor about your financial direction – for today, and for the long term.

Doing Business God’s Way- What every Christian called to the marketplace should understand about God’s Laws of Prosperity

When we view business in a different light – that of the Lord, we begin to see that He owns everything.  Not only that but He is also in control of everything.   This is a tough concept for me to wrestle with, especially in a “me” society.  I know there have been many times where I have failed to include God in “my plans”.

How about this?  What if we saw God as the CEO of our business. What if we looked at His Word as our business plan.  What if we focused on truly serving others rather than just making a profit?  Now I know many of you will say, “should we really mix faith and money?”   To quote Peacocke, “God is a businessman and He’s building a business.”  I love how he lays out a business plan based on biblical principles:

1. Change must work from the inside out – both personally and in your business
2. Change must happen from the bottom up (local to national to international)
3. Change must be comprehensive and not only look at today’s impact but the impact on eternity
4. Change must be affected by godly stewardship of servant-leaders

Here are a few other great takeaways from Doing Business God’s Way:

• We grow by caring for people and things
• Problems grow our character and generate profits. In other words, it is during our trying times that God does His best work and prunes us for future growth (personally and businesswise)
• All lasting wealth comes through the family unit and is built generationally – If we can pass wealth and wisdom, we can impact many generations to come!
• Work is a holy, everlasting calling.  Retirement may be worldly but we should never retire from God’s work. We can retire from a job or career but there is still much to do to serve Him!
• Service is the foundation of all lasting growth.  Look to truly serve others and improve their lives.
• I love this one: God pays for what He orders.  Many believe more money is the answer.  Yet God always funds what is important to Him.  Are you operating under His will or your own?
• Many of us are so afraid to fail so we sit in the same place – paralyzed! Yet, the possibility of a failure is essential for human growth.
• Ideas and actions have economic consequences.
• Here’s a controversial one: Men are not equal and economic redistribution cannot change this fact.  Think about it.  Can you jump as high as Lebron James?  Can you do business like Donald Trump?  Our gifts and abilities to create wealth are not equal…
• Get back to the roots of business and build from there!

Overall, this is a great book to inspire you to take a more disciplined, biblical approach to business.

What are your thoughts?  What other key business principles have helped you carry out God’s plan for your life?

Sometimes we get stuck!  We are going no where or worse we start heading in the wrong direction!  Whether it’s in our jobs, careers, spiritually, physically, maybe financially.  I talk to a ton of people who look at where they are today and are no further ahead than they were 5, 10, 15 or  even 20 years ago.  It reminds of the U2 song “Stuck in the Moment”:

“You’ve got to get yourself together
You’ve got stuck in a moment
And now you can’t get out of it
Don’t say that later will be better
Now you’re stuck in a moment

And you can’t get out of it”  - From U2 “Stuck in a Moment“

Too many were burned by advisor or lost money in the stock market or took a chance and got their heart broken.  Whatever setback that came, what did you learn?   Yes, there was pain.  Yes, it was real.  But growth happens through pain and certainly when we face setbacks.   But too many people let failure prevent them from moving forward.  They get “stuck in the moment”.

From Zero to Hero

If you look back through history, you will soon discover that some of the greatest breakthroughs came as a result of failure.   Michael Jordan, The Beatles, Walt Disney, Abraham Lincoln,  Thomas Edison, and even Dave Ramsey all had major failures before success came to them.

Michael Jordan, one of  the greatest basketball players of all time came close to quitting basketball after being cut from his high school team.  Instead of quitting, he focused on improving his skills and making the team the next year.  We know how that story goes…

The Beatles were rejected by Decca Records and essentially told that rock music was on its way out.  They were then rejected by Capitol Records.  Instead of giving up on their dreams, they pressed on and then sold millions of records.

Walt Disney was fired early in his career because he lacked imagination. Yet he turned that failure into one of the most famous  and creative companies in the world.

Thomas Edison was told as a child that he was too stupid to learn anything. Yet, he became one of the greatest inventors of all time and the founder of General Electric (GE).  It has been quoted that when Edison failed on 10,000 experiments to invent the electric light bulb, he said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

Even today you can look at the success of Dave Ramsey or Dan Miller.  Both were down and out financially before creating prosperous businesses.

The point is this:  failure is an important ingredient to success. Without failure, big breakthroughs will not happen.  You get up, dust yourself off, and get “unstuck”.   Success may be right around the corner.  However if you give up, one thing’s for sure: it’s tough to move forward!   Let me know how I can help you…

The past two weeks I have been busy collecting your stories.  We received hundreds of them!  The question was: how was 2009 for you financially?

Here are some of your responses:

“I don’t know how we are even still standing.  The only thing that i have is my faith in God and Jesus as my savior.” – N.A.

“Jay, Thank you for educating me on faith-based investing.  I have been following your picks and made a ton of money in a poor economy.  Thanks again, looking forward to 2010!”  – E.M.

“2009 was the worst year of my life!” – R.S.

“Are we there yet?  I couldn’t wait for 2010 to start so I could never again look back at 2009.  What a disappointment!”  – D.L.

“Despite a rocky start in 2009, the Lord blessed me in so many ways, maybe not so much financially as spiritually.  I am truly content.”  – L.B.

“God is good!  2009 was a decent year financially.  Thanks to you and your newsletter I finally took some action!” R.G.

Thanks everyone!  I will share more stories next week.  May God bless each and every one of you this year! 

I wanted to share a few good posts from this week

From Michael Hyatt, CEO of Thomas Nelson:
“Why aren’t you dead, yet?

From my blog:
“Who’s protecting your blindside?  Do you have financial accountability?”

From Bob at ChristianPF.com:
“John Rockefeller on Tithing”

Donald Miller:
“Living a good story, an alternative to New Year’s resolutions”

This vision will direct and affect all areas of your life, including your finances. What motivates you becomes your burning passion. This burning passion drives your success. If your passion is lukewarm, so, too, will be your results.

Creating an action plan helps you implement your mission, live by your values, and move toward achieving your vision. Among the hundreds of faith-based millionaires I have interviewed, I have found these common characteristics that help make a vision work:

1. Love what you do each day. I’ve never seen anyone succeed who didn’t love what they were doing.
2. Don’t let roadblocks get in your way. You cannot stop. If there is a concrete wall in front of you, you have to find a way around it. You can never, ever give up or even think in terms of giving up.
3. Confidence is a very important thing. But confidence isn’t something you just develop by saying, “I’m going to do this or that.” You really have to believe it. Just saying you can do something is not enough. You have to take steps toward actually doing it.
4. Don’t let criticism get you down. You have to remain cool under fire and let criticism roll off you. Good leaders handle conflict easily; bad leaders are eaten up by it.
5. Become a people person. Learn to network. You must work well with others and be loyal to your team.

There is a Viking legend backed up by actual historical data, that long ago, a great warrior faced a situation where surrendering in battle was not an option. Yet he and his armies faced a very powerful foe. They were significantly outnumbered and “had no chance”. After sailing to the enemy’s country, the warrior chief unloaded his soldiers and equipment, and then had every one of their ships burned to ashes. Addressing his men before the battle, he is reported to have said, “Do you see our boats going up in smoke? There is no retreat. We win – or we perish!” Legend has it that each soldier fought harder than he ever had before in his life, and they won against great odds.

Many of us have ideas for change in our lives. There are dreams we want to follow. Yet, it is much easier to become comfortable in our daily lives, and put our dreams on hold for “someday”. Unfortunately, “someday” never comes. As long as you cannot imagine it, your dreams will never come true.

Self-defeating thoughts and self-imposed ceilings limit your financial progress. Your thoughts and attitudes will determine your success. If you have no strength to overcome this mindset, you will fail to reach the potential God intended for your life. It is not a lack of resources or a shortage of talent that prevents you from achieving wealth; it is the barrier that resides inside your mind. Your thoughts can keep you from living the financial life God has prepared for you. You will never change your financial future until you change your thinking. Do you think God will want to provide you with new, exciting, and fresh ideas if you continue having negative thoughts and a bad attitude?

Envision your dreams coming true

Envisioning your dreams coming true is a huge key to your success. Have you ever seen the movie Rudy? It is based on the true story of Daniel “Rudy” Ruettiger. He grew up in a mill town and dreamed of playing football at the University of Notre Dame, for his dad’s favorite team. The obstacles facing Rudy were tremendous, to say the least. A few barriers included Rudy’s poor grades and lack of money to attend Notre Dame, insufficient talent to play football, and not having the physical size (Rudy was 5´7˝ and weighed 165 pounds) to play football for the Fighting Irish.

Instead of chasing his dreams, Rudy takes a job at the local steel mill and settles for mediocrity until his best friend, Pete, is killed in an explosion at the mill. It is then Rudy decides to make his dreams of attending Notre Dame and playing college football for the Fighting Irish a reality. He is ridiculed by friends and family for his idea and is even rejected by Notre Dame. He could have let bygones be bygones, but instead goes to a small junior college, hoping to qualify for a transfer to the university.

During his final semester of eligibility for transfer, he is granted admission to Notre Dame. After walking onto football practice tryouts, Rudy convinces the coach to give him a spot on the football practice team, where Rudy exhibits more drive and desire than some of his big name varsity teammates.

Ultimately, it is this drive and determination that get Rudy to fully realize his dream of playing in a game. In the final game of the season, the coach is persuaded to insert Rudy (after all the players and later the fans chant, “Rudy… Rudy… Rudy . . .”). Rudy gets in the game and sacks the opposing quarterback to end the game. Rudy is then carried off the field by his teammates and becomes the last Notre Dame player to have such a distinction.

No accident – choose success

This was no accident. There was no stroke of luck. Rudy saw what he wanted and made it happen. He first had a dream, and then he stopped at nothing to make his dream come true. He could have quit very easily, but his determination and desire to change were overwhelming.
Rudy believed he could do it when no one else did. Wanting to change and actually changing are two separate paths. If the desire to change is small, then changing will be difficult. However, if your desire is overwhelming, change will become inevitable. It all begins in your mind. If you continually allow negative thoughts and a poor attitude to dictate your life, you will stay imprisoned in a life of defeat and failure. However, if you see yourself achieving wealth, becoming successful, and being closer to God, nothing can keep you from reaching your goals.

Over time, if you truly desire to change, you can wipe your financial slate clean and begin a new journey. The road to success begins with examining the past in order to prevent repeating mistakes. Do not let your past barriers prevent future financial progress. If you truly desire to make changes, you will need to develop new habits. In order to unlearn bad behaviors, you must understand the reasons why you’ve made certain choices.

Root out poor habits

If you have poor money management skills, you should seek to learn the roots of those habits. Have you ever wondered why some people seem destined for greatness while others are dead broke? Expect God to do great things in your financial life if you put Him first and trust in Him.

God is constantly trying to plant new seeds in your heart to help you grow and expand beyond your current capabilities. Like Peter, who stepped out of the boat toward Jesus and walked on water, you have to take the first step in faith. Fresh ideas and a new outlook go a long way.

Eighty percent of your results will come from your own changed behaviors and attitudes about money. If you don’t change your behavior, your results cannot change. It is simply a matter of cause and effect. No matter what your financial situation, you should always keep in mind that there is hope.

Why is inflation inevitable?
With Democrats and Republicans alike agreeing deficits are necessary to fight our current economic crisis, Obama and his party have no constraints on how much they are willing to spend! “Sky’s the limit!  Heck, they have already committed to spend over trillion-plus dollars over the next two years alone.

So how will we pay for it?
We really only have two ways to pay for the spending:
(1) Printing more money, which causes inflation, and/or
(2) Hiking taxes, which kills investment, businesses and jobs.

Why is inflation dangerous?
Inflation simply means rising prices. But in addition to retail price inflation measured by the Consumer Price Index, you also have monetary inflation – the growth of the money supply, or the total amount of money in the economy. (Our money supply includes dollars, checking and savings accounts, CDs and money market funds, and short-term transfers of securities in exchange for cash.)

Here is the great balancing act of the Federal Reserve. If it eases the money supply (think lower interest rates), borrowing costs decrease, and investment generally increases. But with easy money, price inflation and currency devaluation follow. The Fed can fight inflation by raising rates to effectively tighten the money supply, but with possible byproducts of reduced consumer spending, lower corporate earnings, and less investment.

Is the government helping or harming the economy?
My opinion is the government is doing much more harm than good with its current spending.  We must realize that government intervention is magnifying, not solving the problems that caused the crisis!  It’s only when the patience of the public with Obama’s remedies run out that we can get the train back on the tracks.  However, this probably won’t happen until at least mid-term election time (late 2010), maybe re-election time (2012) or even thereafter.

What do you do in the meantime?
There are many ways to protect you and your family from the potentially dangerous effects of inflation. Hard times for America do not necessarily mean hard times have to come for you.  No matter what the economy is doing, no matter what the state of financial markets are there is always a strategy available that can make you money. The key is to recognize opportunities wherever they may be and, more importantly, detach from old investment strategies that are no longer working.

Here is a list of inflation protection securities.  Please note these are a list of suggestions.  These are not recommendations.  Please do your own research before purchasing. Here are six ETFs with the potential to do well if inflation takes off:

Holding (Symbol)

IShares USTIP Securities (TIP)
IShares COMEX Gold (IAU)
IShares Silver (SLV)
Proshare Ultrashort 20+ Year Treasury (TBT)
Proshares Ultrashort 7-10 yr Treasury (PST)
SPDR Gold (GLD)

Let’s be realistic: the next several years may be the toughest ones for Americans in their lifetime. However, they do not need to be tough years for you if you prepare, trust in God, and find and follow sound investment advice.

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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What would they have to do if health care reforms pass?

Provide employee health insurance, or pay a penalty?

Small business owners worry about having to face that choice. That possibility moved a step closer to reality in mid-July, as three of five Congressional committees approved new legislation to remake American health care – legislation that could expand health insurance coverage to 46 million uninsured Americans, with potentially harsh consequences for business owners.

Two variations of pay-or-play.

The House version of the bill would levy a fine on employers that don’t offer health coverage – a fine as large as 8% of a company’s annual payroll. However, some businesses could qualify for tax credits and some very small firms wouldn’t have to pay such penalties.

The Senate alternative would spare small companies (25 workers or less) from annual penalties. It would require a business with 25 or more employees to fork over $375-750 per worker annually if that business refused to offer health coverage or paid less than 60% of employees’ monthly health plan premiums.

Could businesses handle this?

After all, some companies have considered dropping health plans altogether. Health insurance premiums paid by businesses have increased more than 200% in the last ten years, according to a Kaiser Family Foundation report; in 2008, single coverage averaged $4,704 and family coverage $12,680. The report found that less than half of businesses with three to nine employees offered health plans at all last year.

The House version of the bill would require a small business with a payroll of $250,000 or more to provide coverage or be penalized. The penalty would actually be a sliding-scale payroll tax: it would be 2% of payroll at $250,000 and climb to 8% of payroll for companies with $400,000 payroll or greater.

What if you’re self-employed?

No break for you. In the Senate version of the bill, any self-employed individual would have to buy health insurance or pay a $750 penalty annually. However, insurers could not use past claims history or pre-existing medical conditions to deny you coverage. Individuals whose income is within four times the poverty level (i.e., $88,000 or lower for a family of four) could qualify for subsidies.

As for the House version, it asks self-employed individuals to buy coverage or pay a tax equivalent to 2.5% of the difference between their adjusted gross income and the tax filing threshold (which was about $9,000 in 2008). Sliding-scale subsidies would be offered to self-employed Americans so that they would not have to spend more than 11% of their income on health coverage. As in the Senate bill, insurers could not wiggle out of providing coverage by citing pre-existing medical conditions.

What would the long-term impact be?

In the bleakest scenario, businesses would be hard pressed to offer workers decent wages or decent health coverage. Nationally, fewer and fewer companies are offering health benefits in the first place. A 2008 National Small Business Association poll found that just 38% of small companies could afford health plans at all, compared to 67% of small businesses in 1995.

A sunnier outlook comes from the Small Business Majority, a nonprofit advocacy group founded by small business executives. Its report examined three scenarios using different levels of employer tax credits and employer payments. It concluded that the proposed health care reforms could save small businesses as much as $855 billion, and preserve as many as 128,000 jobs that would have been lost because of runaway health insurance costs.

Stay tuned.

Will Congress give business owners more of a break? Could penalties be reduced, or requirements eased? Will fewer businesses offer health plans, assuming that their employees could qualify for federal subsidies toward individual health insurance? At this point, there are more questions than answers – but with the median health insurance cost for U.S. businesses already at about 11% of payroll, any increase would be unkind.

Higher taxes, out of control spending, bailouts: defintely not the kind of change we can believe in!

1. Live below your means.

2. Allocate time, energy, and money efficiently to build wealth.

3. Turn to God in times of need.

4. Question needs versus wants.

5. Financial freedom is more important than high social status.

The Bigger Questions

Whenever you consider purchasing something think, “Is It adding to or subtracting from my wealth?”

Assets are things that bring wealth. They have value and grow over time. They have the ability to provide you income today, tomorrow, or at some point in the future. Examples of assets include certificates of deposit (CDs), savings accounts, mutual funds, stocks, bonds, and investment real estate. Liabilities, on the other hand, are things that take away from your wealth. They require that you make payments at some point to reduce what you owe. Examples of liabilities include mortgages, loans, credit cards, and IOUs.

As you begin to work through this area of your life, evaluate:

* What is my monthly income? How can I increase it?

* What are my monthly expenses? How can I reduce these?

* What assets do I own? How can I get better returns?

* What liabilities do I owe? How can I pay these off as quickly as possible?

* What else do I own? Do I really need it or can I sell it to help with my goals?

Questions like these will help you get into the mind-set you need to succeed financially. Financial freedom should be the goal of every individual. If you are not planning ways to add to your wealth, chances are you will never end up accumulating any. There needs to be a process, a plan, and a strategy to overcome your weaknesses and add to your strengths. With God on your side, all is possible. The only thing holding you back is you!