Faith and Finances

King Solomon is known for being the wisest person who ever lived. The fame of his wisdom spread across the known world. That's no small feat considering how slow information travelled without the internet!

In 1 Kings 9 and 10 we read that King Solomon had a navy and "shipmen that knew the sea." What comes to your mind when you read, "a navy of ships?" For me, I start hearing "Anchors Aweigh" in my head, along with images of battleships of all sizes. Go Navy!

In This Episode, We Look At:

Solomon taught reducing risk through diversification

This background helps us understand the practical application of Ecclesiastes 11:1-2

"Cast thy bread upon the waters: for thou shalt find it after many days. Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth."

Increase expected growth

There are investment categories that have a higher expected rate of return than individual stocks.

Diversification in the stock market today

Owning investment categories with dissimilar price movements.

Hypothetically, when Investment A moves down, Investment B is likely to go up or stay level.

Global diversification

There are many countries, in addition to the good old United States (about 44 of them), that have free markets and publicly traded companies which produce goods or services. A country is said to have a Free Market when there is: Rule of Law, Property Rights, and Patent Protection.

Fixed income provides a "cushion" from the volatility of the markets

For example: Short-term Bond Funds and Intermediate Bond Funds

Today's Resources and Links:

Morningstar

A Random Walk Down Wall Street by Burton Malkiel

One Thing You Can Do Today to Improve Your Faith and Finances:

Look closely at your investment plan's list of investment choices to identify funds that are not closely related to each other. Diversify your portfolio by contrasting Large and Small, U.S. and International, and Bond Funds.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Entering into the investing world with a healthy, realistic view of the various risks is vital to a successful experience. Without some risk, there is no respectable growth.

If you search online for the word risk, you'll find:

–verb. "to expose to the chance of loss."

So, why take any risk at all?

For the investor there is an expected reward for the risk taken—the growth of an investment.

In This Episode, We Look At:

Some risks can be eliminated, some mitigated, and others can be taken on with confidence

Liquidity Risk (not having access to your money) – can be eliminated

Inflation Risk – can be mitigated

Single Company Risk – can be eliminated through diversification

Capital Risk – can be mitigated through:

Proper Diversification

Owning many asset classes that are dissimilar

Including fixed income in the portfolio to decrease market volatility

Volatility – Prices and values tending to fluctuate sharply and regularly

One Thing You Can Do Today to Improve Your Faith and Finances:

Remember that the investor anticipates a reward for the risk taken (over a long period of disciplined investing) and several risk factors can be eliminated or mitigated in your portfolio. Seek advice from a licensed, Registered Investment Advisor Representative before investing.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Matthew 25:16

Then he that had received the five talents went and traded with the same, and made them other five talents.

In This Episode, We Look At:

Let's put ourselves in the sandals of these servants:

Your boss just handed you a life's fortune and expects you to use it to make more money….

What do you do? What did the servants do?

We can safely assume that the faithful servants sought guidance. What sources of wisdom did they have access to in the 1st century?

Scripture.

In the first century they had access to the law of Moses, the Psalms, the Book of Proverbs, Ecclesiastes, and the Prophets.

Godly Counsellors

It is both wise and profitable to seek counsel from godly men or woman whom you respect. Proverbs 15:22 reminds us, "Without counsel purposes are disappointed: but in the multitude of counsellors they are established."

Professionals who have a good name (reputation)

Proverbs 22:1 A good name is rather to be chosen than great riches, And loving favour rather than silver and gold.

One Thing You Can Do Today to Improve Your Faith and Finances:

Determine to seek counsel and learn about investing before placing your money in the stock market.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Without a clearly defined personal purpose for investing, enough will never seem to be enough. Without clear goals, the answer to the question, "How much is enough?" will always be, "More."

In This Episode, We Look At:

Many get nervous or anxious when they do not know if they are on track to have enough money for their future.

It is not God's plan for His children to worry. Phil. 4:6 Be careful for nothing

There are those who have more than enough now and for their future, but are still driven to have more.

Solomon warned, "He that loveth silver shall not be satisfied with silver; nor he that loveth abundance with increase: this also is vanity." Ecc. 5:10

Most investors have a general idea as to why they want to invest. How much money will that goal require?

Knowing the future dollar amount needed (roughly) will help you know how much to invest each month to reach your goal.

Begin with the end in mind.

Better is the end of a thing than the beginning thereof: Ecc. 7:8

Consider your future required income, then work backwards. Use the 4% rule.

Example: Desired income = $40,000/ year.

Withdrawing 4% annually from an $1,000,000 balance is $40,000 per year

Today's Resources and Links:

www.calculator.net

One Thing You Can Do Today to Improve Your Faith and Finances:

Prayerfully consider your potential future financial need. Use a financial calculator to obtain an approximate monthly investment amount to meet that need.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Matthew 25:15

And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.

In This Episode, We Look At:

The lord of these servants knew their work ethic very well.

We see that their lord distributed to each servant his wealth according to the faithfulness they have previously displayed.

We see that he displayed grace by giving a portion to his servant that perhaps had not previously displayed faithfulness while in his presence—yet he gave him an opportunity to be faithful in his absence.

God has called all of His children to be faithful stewards in every area that He has entrusted us with.

God knows our individual hearts and He knows if we are faithful or unfaithful. He gives to each of us according to our varying levels of faithfulness and trustworthiness.

He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much. Luke 16:10

Are we currently faithful with what God has already entrusted to us as opposed to waiting for more before we start honoring Him?

The starting place for financial faithfulness…

As we acknowledge that everything belongs to the Lord, we need to also acknowledge that the tithe is the Lord's.

The heart that desires to cheerfully honor the Lord with finances will find that there will be more to honor the Lord with.

There is that scattereth and yet increaseth. Proverbs 11:24a

…And he which soweth bountifully shall reap also bountifully. 2 Corinthians 9:6b

Today's Resources and Links:

Books referenced in this episode:

If God is Good, by Randy Alcorn

The Root of Riches, by Chuck Bentley

One Thing You Can Do Today to Improve Your Faith and Finances:

Purpose to honor the Lord with what He has currently entrusted you with. God works through those whose hearts desire to do more for the kingdom of God.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

In this episode, we'll join Tim as he teaches one of several sessions in his Faith and Finances Series.

In This Episode, We Look At:

Why are there so many verses in Scripture on the subject of money? The majority are aimed at our heart.

Our actions come from our beliefs. Our beliefs come from our hearts.

If we desire to improve our Faith and Finances, we need to address what we believe about money. Who is the true Owner, what does stewardship mean, and, what does stewardship look like in our world today?

There are financial promises in God's Word that are contingent upon our faith and action.

Understanding our true citizenship

As Christians, we are primarily citizens of Heaven. Real treasure is what we lay up in Heaven; through both giving (Matt. 6:20) and in whatsoever we do unto the Lord.

"Without a doubt, the single greatest contributor to our inability to see money and possessions in their true light is our persistent failure to see our present lives through the lens of eternity." - Randy Alcorn

Today's Resources and Links:

Ambassador Baptist Church's Podcast on iTunes

Faith and Finances, Eternal Promises for Today's Resources by Tim Rosen

One Thing You Can Do Today to Improve Your Faith and Finances:

Acknowledge God's true ownership and choose to manage your finances as a Manager of God's resources. The Owner bears the burden, and the Owner will take care of you!

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

We naturally look around and view many things as "ours." Our house, our car, our dog, our kids…

We regard money as a private matter and perceive ourselves as the absolute owner of all we possess. In reality, God is the absolute owner of all things.

In This Episode, We Look At:

Your view of who owns the money you manage greatly impacts how you handle that money.

If we look and operate through the temporal lens; we are going to experience temporal results:

• Worry over having enough money to take care of ourselves and our families.
• Trusting in the balance of our savings or investments.
• Having more than enough with seemingly no needs, which may lead us (even unsuspectingly) to "…be full, and deny thee, and say, Who is the Lord?" (Proverbs 30:9).
• Loving money and the things that money brings more than we love God.
• Pain for ourselves and our families. "But they that will (to desire) be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition" (1 Timothy 6:9).

However, if we view money and possessions, by faith, through the eternal lens of Scripture, we can avoid the aforementioned turmoil.

We learn in God's Word that God not only owns the earth "…and the fullness thereof," but also "the world, and they that dwell therein" (Ps. 24:1). He owns us.

What? know ye not that your body is the temple of the Holy Ghost which is in you, which ye have of God, and oye are not your own? 20 For ye are bought with a price: therefore glorify God in your body, and in your spirit, which are God's 1 Cor. 6:19

This passage uses very clear language: "ye are not your own" – "bought with a price" – "body, and…spirit, which are God's."

We can be free of money-related stress, worry, fear, doubt, and covetousness.

Think about that! Why worry over something that is not yours? All is His. The owner bears the burden of ownership, not the manager(steward). Our job is to manage whatever the owner entrusts to us.

One Thing You Can Do Today to Improve Your Financial World:

Consciously put on your "Manager's Hat" every morning, acknowledging that you are managing the resources you have (from God) for God, and according to His will. His ways are so much better than our ways!

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Matthew 25:18 But he that had received one went and digged in the earth, and hid his lord's money.

While most of us would hesitate to align our thinking with the unfaithful steward, there are still many hindrances that we allow to keep us from saving and investing for the future.

In This Episode, We Look At:

Obstacles that keep us from investing:

Time

Time seems to be the most prominent deterrent. I don't have spare time to try and learn about investing; there are more important matters that require my full attention. {editor's note from Troy: This was my problem for decades. I'm a smart guy who simply didn't bother to put much thought into personal finance.}

Money

Many believe they do not have the resources to start investing, or they view the amount they are able to invest as too insignificant to make an impact.

That belief can lead to putting off action, resulting in the thought that they will start investing when they are making more money.

Misconceptions

1. Some people struggle with the belief that they could actually accumulate a large sum of money for the future. $500,000 or $1,000,000 seems unattainable to them.
2. Another misconception is that investing is an activity through which people lose a lot of money. It's a dangerous game that only the pros can play.

We are comfortable with the "Here and Now"

Suddenly we find ourselves with all of these needed bills and very little financial breathing room.

One day we wake up and realize we are not twenty anymore, and that we are way behind in this business of saving!

We Spend

"Beware of little expenses; a small leak will sink a great ship" –Benjamin Franklin

Of course we have no problems spending money in areas that bring us pleasure, satisfaction, or areas we deem as important.

Today's Resources and Links:

Article: "Why We Don't Save, and How to Change That", by Tim Rosen

Article: "How to Boost Your Retirement Confidence"

One Thing You Can Do Today to Improve Your Faith and Finances:

Think 5, 10, and 20 years down the road. Should the Lord tarry His return, you will still need income. Saving and investing are the more effective means to prepare for such time. I want to encourage you to determine to take care of you and your family by planning for your financial future.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Matthew 25:14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. 15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. 16 Then he that had received the five talents went and traded with the same, and made them other five talents.

In the parable of the talents we read that the faithful servants doubled their master's money by trading. As we seek to increase the wealth God has entrusted us with today, where should we look?

In This Episode, We Look At:

Interest rates are very low in recent years and we certainly wouldn't turn the banks seeking to grow our money.

With the best savings account interest rates of around 1% and long-term inflation rates averaging 3%; the math is simple. An attempt to grow wealth through bank interest rates will result in the rapid reduction of buying power.

The Equities Markets

When planning for the future, investing money to increase its future value is not only logical, but almost necessary.

Investing certainly provides the potential for incredible growth of our assets. It also opens the door to potential pitfalls, snares, and destruction—mostly from investor behavior.

Growth comes from the markets themselves, not from investing gurus or by following suggestions from financial TV shows.

Emotions Can Work Against Us

Our instincts are to flee pain and pursue pleasure. This is wonderful when dealing with lions, and tigers, and bears (Oh, my!), but harmful when it comes to investing in equities. We expect volatility and endure it–not try to avoid it.

When markets move downward and the media highlights the fall, nervous investors are tempted to follow their fear and sell when values are down—thus suffering a loss.

Investing in equities (stocks) is a long-term discipline. It's helpful to know that the S&P 500 has a long-term expected rate of return of about 10%. Even with all the downturns in history, it has made up for down years to achieve this average.*

*For Educational purposes only. Seek the guidance of a licensed investment advisor prior to investing any of your own money.

Past performance is no guarantee of future results. Investing in stocks involves volatility and the potential of loss of capital.

Today's Resources and Links:

www.TimRosen.tv for more information on prudent investing.

One Thing You Can Do Today to Improve Your Faith and Finances:

Consider tuning out the media, especially when it comes to the stock market and the economy. You will normally not receive prudent answers to investing questions, nor receive peace of mind.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.

Experts estimate that you will need 70% of your pre-retirement income to maintain your standard of living.

Do you expect your standard of living to be 30% less expensive than your current standard?

According to the US Dept. of Labor, fewer than half of Americans have calculated how much they need to save for retirement. Yet, the average American will spend 20 years in retirement.

Also consider that you could be physically unable to work earlier than your current planned date of retirement.

In This Episode, We Look At:

Planning your future source of income

More than 21 million American workers expect to rely on Social Security in retirement. Unfortunately, 56% admit to not having a good understanding of social security benefits.

Many who reach retirement age will continue to work, utilizing their years of experience and wisdom in a capacity that they may enjoy more than having to work for someone else.

Who is saving for Retirement?

76% of Americans are living paycheck to paycheck. The majority cannot handle a $500 unexpected expense.

29% of workers say they have less than $1,000 saved for retirement.

56% of workers say the total value of their investments is less than $25,000.

Source: Employee Benefits Research Institute, Retirement Confidence Survey, 2010c

Why are we in this position?

We have the "I'll catch up later!" mindset. We might try to catch up later, but it gets harder the longer you put it off.

In many cases you cannot make up for lost time without having to invest a much greater dollar amount every month.

You can plan for your future with minimal pain

It's amazing what you can accumulate with a modest monthly contribution over the course of years.

A twenty-year-old who invests $100 per month in equities may accumulate over $1 million by age 65. (hypothetical calculated at 10.5% average annual return)

Someone who waits until they're 30 to invest $150 per month until age 65 may still accumulate over $400,000. (hypothetical calculated at 9% annual return)

One Thing You Can Do Today to Improve Your Faith and Finances:

Commit to invest an amount every month for as long as you are employed. Increase that monthly investment as your pay increases and as you pay off certain bills—like credit cards and car loans.

What Are Your Thoughts?

If you have a question or comment about today's topic, we invite you to share your thoughts.