In the Fallen World of idol worshipping, God’s people are to “take no thought for (your) life” (Matthew 6:25a KJV) and yet, “know well how (your) flocks are doing, and keep (your) mind on your cattle” (Proverbs 27:26 NLV). While trust in God for everything is a pillar to a people’s relationship with the Creator; to gather assets, and weigh them against liabilities, to manage, grow and protect money earned takes an education, or a career in banking. If only this pertinent information was learned early in academic careers, maybe the government wouldn’t be $20T in debt -what a burden to bear for next generations; think of the interest alone! These are fundamental truths that need to be understood, not just to retire comfortably and be able to pass down a legacy, but to become responsible with all the Lord has entrusted to people.
From the beginning of humanity, a sinful nature was quickly passed down, to the first son, Cain, who was only willing to give the Lord “some of the fruits of the soil” (Genesis 4:3 NIV). If all things are God’s to begin with, don’t hesitate to give the One who owns it all the 10% tithe he commands (Deuteronomy 14:22). “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this, says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it” (Malachi 3:10 NIV). Begin here when computing budgets, so as not to forget the One who gives it all. It is up to an individual and her accountability partner whether she calculates this ten percent against her gross income (before taxes are withdrawn), her net pay (after deductions and retirement contributions paid), or her take home pay (what is left after taxes, deductions, and retirement contributions). A person whose base pay is $60,000 per year (before everything listed) is tithing (a measly; comparatively) $6,000.
“The wicked borrows but does not pay back” (Psalm 37:21 ESV). “Pay to all what is owed to them. Owe no one anything” (Romans 13:7-8a). “The borrower is the slave of the lender” (Proverbs 22:7). It is no surprise then, that the next financial endeavor to overcome is debt owed from a past life. Be it university or car loans, make this a priority and compute what can be afforded from the budget to pay towards a principle payment, to further lower interest rates monthly. Sacrifices will be made and possibly, a second job attained, but following Dave Ramsey’s “snowball method” of debt reduction will have, from the smallest figure to the largest, debts paid off! Do consider: those working in public service positions qualify for “student loan forgiveness” programs: after ten years of full time employment, and certain criteria met, one is free from that enslavement. A recent study by the Federal Reserve Bank of NY found that officially, student debt has surpassed credit card debt in the US!
While spending more than one makes, is a luxury only afforded by leaders private citizens vote to represent them in public office, some debt is shockingly, good! In a world where the cost of a home is four times a six-figure salary, the banking system allows for much borrowing against assets, like a home. Knowing most people won’t have a lump sum of $400,000 sitting in a money market /liquid savings account (earning, maybe 1.2% APY), the bank will allow an individual to borrow up to 80% ($320,000) of this. So technically, the house is owned by the financial institution until the “mortgage” debt is paid off. The incentive for banks to only receive a 20% ($80,000) “down payment” is, of course, the interest accrued over seven, fifteen and thirty years (standard mortgage time frames -how long does one plan to stay in current home? Interest paid, dependent upon this variable). If the loan to value ratio is higher than 80% percent, where home owners put down less than 20% on the closing date, a “private mortgage insurance” rate is issued. The home borrower’s interest rate is higher every month. Once PMI is paid off, the bank lending the house will reduce the interest rate, to that of a “normal” 20% mortgage rate. Non -US citizens, new to the States, with no credit or “reputation” are required to put down up to 25% of the value of the home when making this purchase. Some people never own their homes, while never nearing the principle $320,000 payment. Some people do their due diligence in estimating just how much interest they’ll end up paying, to pay off their mortgage off before due time.
All reoccurring monthly payments (Comcast, Verizon, NJ Power &Light), to a financial institution, prove credibility. Even financing a portion of a car (liability), that could be paid in cash would help to confirm a client’s “credit worthiness” to banks /creditors. How valuable is a person’s ability to borrow and pay back funds? Priceless! Banks are more inclined to advance funds to someone reliable. This is how to properly use a credit card: set up automatic payments from a checking /expense account to bring the balance to zero when the due date arrives. Memorize this monthly date. A great credit score earned is 760, and a near perfect one is 800 -just don’t miss a payment! The better the score, the lower the interest rate a bank will reward to one, come time for a mortgage, car, and future financial endeavors. Protect that number!
With a majority of her salary left over (before taxes), a twenty-eight-year old woman with no dependents would serve her future well by maxing out ($18,000 annual limit) her 401k retirement fund. Not only can she borrow, with no penalty when she purchases her first home from this investment vehicle, but it will grow astronomically from compound interest; that is: interest on interest. Wise is saving 30% tax free, lowering taxable income, of course. Plus, if her employer, like most, matches 6% of each contribution, that is free money! In the parable of ‘the three servants and money’ (Matthew 25:14-30 NLV), Jesus shows how important it is to do well with money earned: “the servant who had five pieces of money went out to the stores and traded until he made five more pieces.. the servant who had received the one piece of money went and hid the money in a hole in the ground.” What will one do with the money the Lord has bestowed responsibility upon? Demonstrate “faithfulness over a few things” (25:21b). “Only he would be punished who had made no effort to turn his talents to account” (Sandison 279). When filing a yearly tax report, Uncle Sam doesn’t get paid on 401k monies -work smart, not hard!
At this point in personal budgeting, taxes are to be paid from the individual to her leaders: “give to Caesar what is Caesar’s” (Mark 12:17 NIV). Use as many tax deductions as are allowed: tithe, 401k contributions, pre-tax employer medical benefits, other tax-free funds, but don’t cheat the system. Granted the welfare system needs reform, the ‘Gross domestic product’ needs more people with “skin in the game;” and the Bible says, “if anyone is not willing to work, let him not eat” (2 Thessalonians 3:10 ESV), “avenge not yourselves” (Romans 12:19). “Submit, for the Lord’s sake to every human authority” (1 Peter 2:13 NIV). And, when willing and capable, rise to the ranks of public servanthood and correct this crooked system.
Eventually, as the investment needs of a retail client grows, she will want to allocate assets, from liquid to real estate or other opportunities, and build a long term investment plan. When she changes career paths, due to an ever-shrinking world and technology’s inception, she can invest these “401k rollovers” from previous employer’s plans. There are more tax -advantaged retirement savings vehicles (without a company match or taxes paid once withdrawn), like a ROTH IRA (maximum annual contribution: $6,500). Down the line, with assets to protect (house), she can further help her credit score, and borrow against the value of the home she owns now. A “home equity line of credit,” or a HELOC, can also be used, at a lesser interest rate, to pay for college. When she’s happily married, her spouse, another “asset” will need protecting in the form of “life insurance.” If ever, God forbid, she were to leave the Earth before her partner in life, she would want the peace of mind that a lifestyle lived on two incomes could remain without her contribution. Children to save for, is another reason to develop a long term investment strategy (more tax-deferred options include: 529 Plans). Financial institutions earned a bad reputation in 2008, when the mortgage bubble burst and the housing market crashed, but financial advisors want to be with families through these imperative steps in life. Something as simple as making sure hard earned money grows for clients, beyond the 3% yearly rate of inflation is pivotal to a personal financial education.
Believe it or not, Jesus talks about money in half of his parables. Why? “No one can serve two masters. You cannot serve both God and money” (Matthew 6:24 NIV). “The things you own end up owning you” (Palahniuk 124). Live below means. Don’t keep up with the Joneses, because they’re broke. How one spends their time and money especially, exhibits precisely what is treasured in their hearts. After ever-present expenses of rent, car insurance, a cell phone and internet bill, groceries, and amenities for a feline, hopefully, a person has leftover money for random acts of kindness. Buy a pizza for a hurricane Harvey first responder, or the unfortunate that lost their homes to the California wildfires. Dave Ramsey specifies that, we earn and save, to give grandiosely (Ramsey 3)! Max De Pree, in “Leading Without Power” puts it this way: “We must use our freedom to serve the family” (40).
i am no bird; &no net ensnares me. -charlotte bronte
"never give in, never give in, never, never, never, never -in nothing, great or small, large or petty -never give in except to convictions of honor &good sense." -w. churchill. 10/28/41
the man who does not read has no advantage over the man who cannot read. m.t
i am not afraid of storms, for i am learning how to sail my ship. -louisa may alcott
nothing in this world can take the place of persistence. talent will not: nothing is more common than unsuccessful men with talent. genius will not; unrewarded genius is almost a proverb. education will not: the world is full of educated derelicts. persistence &determination alone are omnipotent.
i am not an extraordinary man, &i am quite ordinary. but God chose me for something quite extraordinary. -a. valladares receives '16 canterbury medal.
not failure, but low aim, is crime -james russell lowell
a genuine leader is not a searcher for consensus but a molder of consensus -mlk jr.
i don't lose any sleep at night over the potential for failure. i cannot even spell the word. -"mad dog mattis"
soft minded men always fear change -mlk jr.
it is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. the credit belongs to the man who is actually in the arena, whose face is marred by dust &sweat &blood; who strives valiantly; who errs, who comes short again &again because there is no effort without error &shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worth cause; who at the best knows in the end the trump of high achievement, &who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold &timid souls who neither know victory nor defeat. -theodore roosevelt
we are what we repeatedly do. excellence, then, is not an act, but a habit. -aristotle
no one can make you feel inferior without your consent. -eleanor roosevelt
i have nothing to offer but blood, toil, tears &sweat. -winston churchill, 1940
i keep my ideals, because in spite of everything i still believe that people are really good at heart. -anne frank
the most courageous act is still to think for yourself. aloud. -coco chanel
art is the signature of man.
a dead thing can go with the stream, but only a living thing can go against it.-gk c.