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Worldly Wealth vs Godly Stewardship
- 6. What does the Bible say about greed? “ But people who long to be rich fall into temptation and are trapped by many foolish and harmful desires that plunge them into ruin and destruction.” I Timothy 6:9 Wall Street Greed?
- 7. What does the Bible say about debt? “ The rich rule over the poor, and the borrower is servant to the lender.” Proverbs 22:7 Individual Irresponsibility?
- 9. Personal Saving Rate 1946–2008 0 2 4 6 8 10 12% 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 49% of Americans could cover less than one month’s expenses if they lost their income.
- 13. Increase in Money Supply = Inflation
- 16. Emotional Roller Coaster Upbeat Confident Thrilled Euphoric Startled Nervous Terrified Defeated Desperate Resigned Hopeful Upbeat Riskiest Time? Best Opportunity?
- 17. Stay Diversified! “ Give portions to seven, yes to eight, for you do not know what disaster may come upon the land.” Ecclesiastes 11:2 Stocks Bonds Cash
- 19. More Funds Does Not Always Mean More Diversification Portfolio B Portfolio A
- 20. Fund A Top 15 Holdings Fund B Top 15 Holdings
- 21. Stocks, Bonds, Bills, REITs, and Commodities (1980 – 2008) 1980 1985 1995 2005 $40 10 1 0.60 $14.65 $19.30 $6.39 $4.97 $2.74 $18.78 1990 2000 Compound annual return • Stocks • Bonds • REITs • Commodities • Treasury bills • Inflation
Editor's Notes
- Thanks. I am not sure if I drew the short straw or not – going first and talking about money. Welcome to SPF 9 – Support, Preparation and Fellowship. If I recall, number 9 protection means some people may get burned. I will attempt to take it easy tonight, but money is usually a hot topic. And given the economy, it may be hotter. I have titled my message “Worldly Wealth or Wordly Wealth – Avoiding the Slippery Slope” and we will be looking at Psalms 73:1-3. Here is what is ahead of us – there are over 2,000 verses in the Bible on money & possessions and 16 of 38 parables on the topic. I have 34 slides and :30 minutes so buckle up. With that let’s look at Psalms 73:1-3 – “Surely God is good to Israel, to those who are pure in heart. But as for me, my feet had almost slipped; I had nearly lost my foothold. For I envied the arrogant when I saw the prosperity of the wicked.” Prayer In verse 2, the Psalmist writes that he almost slipped and nearly lost his foothold when he saw the prosperity of the wicked. Well, my feet did not almost slip. When I saw all that the world had to offer, I slipped and I slipped hard for this idea of keeping up with the Jones. I was knee deep in a desire for more money. How could I make more, not so that I could give it away, but in order to spend more on grown-up toys. Obviously, given the current condition of our economy, many others have slipped. I believe the problems with our economy are because of our wrong view of money. I believe we will only find the solution once we have the proper point of view of money. Let me see if this video will help. [NEXT SLIDE - VIDEO] Total time: 2:45 Time Remaining: 27:15
- [AFTER VIDEO NEXT SLIDE] We all love stories. Each of our lives is a story and actually a compilation of stories. In many ways, our checkbooks are the story of our lives. How we spend our money tells of our values – what we buy, how much we save and to whom we give. In fact, our spending tells us more about our priorities than just about anything else. This is the reason the Bible talks so much about money. Money is neither good nor bad, but it can be used for either. A wrong attitude toward and the misuse of money is what is bad. We must keep in mind that money is a tool, a test and a testimony. There should be a difference in the way we handle our money. Money is not A Measure of Self-Worth, A Reward for Godly Living, A Guarantee of Contentment, or A Measure of Success. Your net worth does not equal your self worth. The Apostle Paul said that he learned to be content. And I am sure we can all think of someone we know who has lots of money and is not happy. I want to be clear. This is not a look at tithing or a lead in to a Grace Evan building campaign. In fact, our look of money is about the remaining percentage. The amount that is left over after the tithe. All I will say about tithing is this. If you are concerned whether the tithe should be on the “gross” or “net” or is it “actually 10%” – you are missing the point and I would encourage you to read the story of the widow’s mite found in Luke 21:1-4. Total time: 7:20 Remaining time: 22:40
- With this in mind, let me give you an overview of what I would like to share with you tonight. In a group this size, we obviously all have different financial issues and concerns. Therefore, tonight I am going to paint with a broad brush. Next week, I will zero in a little more. I will attempt to stay away from giving advice and I will try as best as I can to remove some of my own personal economic opinions and just present and interpret the facts and some of the data that is out there. I want to share with you the slippery slope - where we are, how we got here, what are the implications, and then I want to share with you the significance of stewardship and possibly challenge your view of money and how you handle it and finally wrap it up with the safety strap - the ultimate guarantee. [NEXT SLIDE] Total time: 8:08 Remaining time: 21:52
- Every where you look the economy is a mess. Fraud, bailouts, bankruptcies, unemployment. The stock market is down. How did we get here, of course, everyone wants to know who is to blame and what is the outlook? And when it comes to blame there is plenty to go around. [NEXT SLIDE] Total time: 8:30 Time remaining: 21:30
- Is it the government? This is an extract from a 1999 New York Times article that has been well circulated. The article highlights the “increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people.” I would love to take a closer look at a Biblical view of government in a capitalistic, free society, but it is beyond the scope of our topic tonight. So was it just government socialist policies or was there something else like Wall Street greed? [NEXT SLIDE] Total time: 8:50 Time Remaining: 21:10
- This is part of an article from the Wall Street Journal. The article quotes a former Bear Stearns board member. He says “I blame the system. I blame greed, Wall Street is really predicated on greed. This could happen to any firm.” And it did. What does the Bible say about greed? Besides Bear Stearns, several other Wall Street firms and many banks have collapsed. But was it just government socialism and Wall Street greed? This next article is probably my personal favorite. I bet that after you read the title someone will pop in your head – I just hope it is not your spouse. [NEXT SLIDE] Total time: 9:30 Time remaining: 20:30
- “Hi, My Name is Fred And I’m Addicted to Credit Cards” “After years of free spending -- $200 jeans, a silver BMW and other grown-up toys -- Michael Wagner had racked up $25,000 in credit card debt and was behind on his mortgage and car payments. Creditors called night and day. It was a "hopeless downward spiral," he says.” What does the Bible say about debt? Unfortunately, Fred and Michael aren’t the only ones in financial bondage. [NEXT SLIDE] Total time: 10:00 Time remaining: 20:00
- As you can see from this table, in the past 30 years, consumer debt has more than doubled as a percent of disposable income. Debt can be like driving an automobile with poor fuel economy. It can get expensive and you need to make sure that there is plenty of gas (cash) in the tank. [NEXT SLIDE] Total time: 10:30 Time remaining: 19:30
- The problem is – that there is not a lot of fuel in the tank. This graph illustrates the US personal savings rate over the past 60+ years. As you can see the last 30 years (from 1981 to 2008), the level of savings has fallen dramatically. What is socked away in savings is the fuel in the tank. When someone experiences a financial setback, maybe a medical emergency, a divorce, or a job loss – how much gas in the tank becomes very important. The good news is that the level of savings is starting to increase. Ok, so we have looked at how we got here – high debt and low savings. Let’s talk about where we are headed. [NEXT SLIDE] Total time: 11:20 Time remaining: 18:40
- So what are the implications of this. As I said earlier, the economy is obviously a mess. A recovery in the stock market could take a long time. In just a second, we will look at past downturns and recoveries in the stock market. Keep in mind, that -50%+50% does not equal zero. A 50% decrease requires a 100% increase to get back to even. I would encourage you to stay truly diversified and watch out for the safety trap. Taxes, interest rates and price inflation are expected to increase. Let me share with you why. [NEXT SLIDE] Total time: 12:00 Time remaining: 18:00
- First, lets look at some of the government programs that are currently available. This is an excerpt from– “A Citizen’s Guide to the 2008 Financial Report of the US Government.” It is available on-line and is an easy read. It is not very pleasant, but it is easy. Let me read to you a couple of sentences from the report – “If the Government is to retain the ability to manage a financial crisis such as the one today, it must eventually address the long-term fiscal imbalance resulting from Social Security, Medicare, and Medicaid. The Government’s fiscal policies for these programs as currently structured are not sustainable.” We are on “An Unsustainable Fiscal Path.” The government has three options concerning their financial obligations - default, increase taxes, or just print more money and inflate our way out. The government could obviously decide not to pay the benefits promised and/or the holders of US debt. I thought it was interesting a couple of months ago when China raised the question of American solvency. The US government could obviously tax its way out. I think the political pieces are in place for taxes to increase. And finally, the US government could crank up the printing press and just print more US dollars. [NEXT SLIDE] Total time:13:25 Time remaining: 16:35
- Let me read to you part of a speech the then Governor Ben Bernanke gave to a group of economist in 2002 on the heels of the collapse of the Japanese economy - In his speech, Mr. Bernanke outlines what the Fed would do IF deflation were to happen here. And currently we are tracking right along – first, the Fed would lower interest rate to near zero. If that didn’t work, then the Fed and I quote - “ Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost……..We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation . Of course, the U.S. government is not going to print money and distribute it willy-nilly ” I could say lot about “willy-nilly” but I promised I would hold back on may personal opinions. [NEXT SLIDE] Total time: 14:40 Time remaining: 15:20
- Well as you can see the US government has cranked up the printing press. This is a chart from the Federal Reserve that shows the increase in the monetary base. I just hope they don’t distribute it “willy-nilly.” So what does all of this mean to you? As we all know, the stock market has dropped. [NEXT SLIDE] Total time: 15:00 Time remaining: 15:00
- We looked at the past sizable (since 1926) drops in the stock market – the red rectangle on your left ( mouse click ) - and then calculated the number of months that it took to get back to even – the green rectangle on your right (mouse click) . After the Depression, it took over 12 years to get back to even. And after the gas line shortages of the early 70s, it took nearly 2 years to get back to even and after the Sept. 11 th attack, it took over 4 years to get back to even. So the million dollar question is - How long will this recovery take? [NEXT SLIDE] Total time: 15:40 Time remaining: 14:20
- If we look at history (1946-2008), history reveals that stocks have been a strong performer after recessions. Many investors fear the roller coaster ride of the stock market. Stocks typically lead the way out of recessions. Diversifying into stocks may benefit your portfolio. [NEXT SLIDE] Total Time: 16:00 Time remaining: 14:00
- When I talk about the roller coaster of stocks, this is what I am speaking of. When you invest, you are usually upbeat & optimistic. But at some point, you get nervous and possibly even terrified. Unfortunately, many people make poor decisions during the ups & downs of the stock market. Instead of buying low & selling high, many people buy high and sell low. So what is the solution? [NEXT SLIDE] Total time: 16:30 Time remaining: 13:30
- Diversification – the idea of not putting all your eggs in one basket - is a timeless, Biblical principle and one of the most important factors of an investment portfolio. It is the process of building a diversified portfolio by combining different assets in varying proportions. Every asset has distinct characteristics and may perform differently in response to economic changes. To better understand this, think about when you mix the colors blue & yellow. When mixed properly, you get the color green. The idea is to properly mix different asset classes in varying proportions. When properly mixed, it can have a dramatic effect on your portfolio. Let me show you an actual example. [NEXT SLIDE] Total time: 17:25 Time remaining: 12:35
- Proper diversification requires combining assets that behave differently during changing economic conditions. Investing in assets that have different behavior may protect your portfolio from major downswings. This image illustrates the annual returns of three different portfolios over a seven-year period. Stocks represent a 100% investment in stocks. Bonds represent a 100% investment in government bonds. When stocks and bonds are combined in equal amounts, the portfolio experienced less mood swings than stocks alone and still maintained an attractive return. Notice that stock returns were up at times when bond returns were down, and vice versa. These offsetting movements assisted in reducing risk. As I will point out in just a minute, diversification does not eliminate the risk of investment losses. [NEXT SLIDE] Total time: 18:20 Time remaining: 11:40
- A common mistake for many investors is that they diversify in name only. An in-depth analysis can be used to determine overlap. This image illustrates two portfolios that individually comprise five mutual funds. Each oval within the box represents the investment footprint of a mutual fund. As you can see, the level of diversification provided by each portfolio is quite different. The funds in Portfolio A significantly overlap with one another. While some overlap is acceptable, too much of it defeats the purpose of using multiple funds to create a diversified portfolio. In contrast, Portfolio B contains funds that span across many different investment styles. While not all investments are appropriate for all investors, it is important to make sure that you are truly diversified. Let me see if I can illustrate this problem in a different way. [NEXT SLIDE] Total time: 19:25 Time remaining: 10:35
- This image shows the top 15 holdings of two different actual mutual funds that I have labeled Fund A and B. As you can see, when you peel the onion back, each fund owns stock in many of the same companies – Exxon, GE, AT &T, IBM just to name a few. So while it might appear that an investor has diversified, they clearly have not. [NEXT SLIDE] Total time: 19:50 Time remaining: 10:10
- As you can see from this image that different roads can lead to the same destination. Therefore, a mixture of different investments – stocks, bonds, real estate, commodities, like gold – may give you a smooth ride. Commodities and real estate are often overlooked. These assets can be excellent vehicles for diversification purposes because when traditional assets like stocks and bonds have done poorly, these alternative assets may have done well, thereby reducing overall risk. Diversification does not eliminate the risk of investment losses and in 2008 most asset classes lost money. [NEXT SLIDE] Total time: 20:30 Time remaining: 9:30
- As you can see from this image, that during deflation – negative inflation – as we are currently experiencing and was experienced during the Depression - the stock market can get very bumpy. If you recall from the roller coaster image, investors typically jump off the roller coaster when it gets bumpy and jump over to a smoother “ride” - like Treasuries or CDs. Therefore, I want to alert you to something I refer to as the Safety Trap. (Mouse Click) Taxes and inflation can have a dramatic effect on your investment portfolio. As you can see, over the long run Treasury bills, while a smoother ride, do not provide any purchasing power – underperforming inflation over this time period. In a world with the potential for higher taxes and inflation, focusing on “risk free” investments alone have not provided investors with a substantial increase in wealth. Beware of the safety trap. Hopefully, this has given you some insight into the slippery slope - where we are, how we got here and potentially where we are headed. Now, let’s shift gears and take a look at the importance of handling money from a Biblical perspective. [NEXT SLIDE] Total time: 22:15 Time remaining: 7:45
- How we handle money is important. It is important not because I say so, listen to what a few others have to say about the significance of money. Pastor John Piper in his book Don’t Waste Your Life wrote “the credibility of Christ hangs on how we use our money.” And in his book The Treasure Principle, Randy Alcorn wrote that “Fifteen percent of everything Christ said relates to this topic – more than his teachings on heaven and hell combined.” [NEXT SLIDE] Total time: 22:50 Time remaining: 7:10
- John MacArthur said “Fifty percent of your waking time, you’re thinking about money. How to get it…how to spend it…how to save it…how to earn it…how to invest it…how to borrow it…or how to find it.” And finally, Jesus said that we cannot serve two master. We will either hate one and love the other or we will be devoted to one and despise the other. I am a black & white guy and that sounds pretty clear – love or hate and devoted or despise. Our attitude toward money and how we handle money effects our relationship with God. But is the Bible applicable to our current economy. I mean can a book that was written over thousands of years and thousand of years ago be relevant today? [NEXT SLIDE] Total time: 23:40 Time remaining: 6:20
- (Take your time) Of course, it is. My hope is that you will see that God’s word is significant, useful, timeless and essential. And that you would feel thoroughly equipped when it comes to handling money based on Biblical principles. [NEXT SLIDE]
- It has been said that the definition of insanity is doing the same thing over and over again and expecting a different result. Given the condition of our economy and since the Bible is relevant, then we should consider changing or at the very least challenge what we think about money and even how we handle money. We must be willing to test the world’s ways and even think outside of the box. With so many verses on money and possessions, let’s compare and contrast what the Bible says and what the world says about money. I have included a number of Scripture references and the main idea of each passage. [NEXT SLIDE] Total time: 24:30 Time remaining: 5:30
- As we were asked in the video, whose is it anyway? The world says – It is mine. What I possess I alone own, and I alone control my destiny. Scripture says – What I possess, God owns. God owns it all. He is the sovereign, living God who controls all events – good and bad. [NEXT SLIDE] Total time: 24:50 Time remaining: 5:10
- Involvement - The world says – God has no involvement in how I handle my money. My happiness is based on being able to afford my desired standard of living. Scripture says – As you learn and follow Biblical financial principles, you will draw closer to Christ and learn to be content in every circumstance. [NEXT SLIDE] Total time: 25:15 Time remaining: 4:45
- When it comes to debt, it has been said that we buy things we don’t need with money we don’t have in order to impress people that we don’t even like. God discourages debt because he want us to be free to serve Him. [NEXT SLIDE] Total time: 25:40 Time remaining: 4:20
- Role & Responsibility - The world says you made it, you deserve it & a lot more, so spend it any way you want and you will be happy. Scripture says – You can only be content if you have been a faithful steward handling money from the Lord’s perspective. The key to contentment is faithful, obedience. [NEXT SLIDE] Total time: 26:10 Time remaining: 3:50
- God is the author and perfecter of our stories. So obviously God plays an important “part.”. The reality is that it is ALL about God. God owns it all. We must recognize that He is the owner of all our possessions. Therefore, every spending decision becomes a spiritual decision. Isaiah 43:7 tells us that we are created for His glory. The question we should ask ourself is – how can I glorify God with His money? Since God controls it all – good, bad and it is all under His control. What is our role? [NEXT SLIDE] We are called to be faithful stewards of all of our resources. I Corinthians 4:2 - “Now it is required that those who have been given a trust must prove faithful.” Hosea 4:6 tells us that people perish from a lack of knowledge. So ignorance of Biblical financial principles is not an excuse. Unfortunately, ignorance of OR disobedience to Biblical financial principles frequently causes many problems. Luke 16:10-13 says "Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else's property, who will give you property of your own?” [TEXT CONTINUES ON NEXT PAGE] Total time: 26:40 Time remaining: 3:20
- This passage tells us that we must be trusted with all of our resources even the “little” things. When we are faithful, it leads to contentment because “where your treasure is, there your heart will be also.” Let me ask you – What or whom do you treasure? Are you financially content? Or have you slipped like the Psalmist wrote about in Psalms 73? I am sure many of you are going through a challenging time during this difficult economy. Deuteronomy 8:2 tells us that the “wilderness” periods of our lives are “to humble” us and “to test” us “in order to know what was in our heart, whether or not you would keep his commands.” The Apostle Paul wrote in his second letter to the Corinthians that he was “exceedingly joyful in all his tribulation.” (II Corinthians 7:4) How do you get to the point were you are exceedingly joyful in all tribulations? I believe that Paul could say this because he held on to the promises of God. I encourage you to cling to God’s promises. Promises like Jeremiah 29:11 God has a plan and a purpose, not to harm you and Romans 8:28 that all things work together for good for those that love the Lord and are called according to His purpose; and Jeremiah 33:3 call to me and I will answer you and will tell you great and hidden things that you have not known. As I conclude, I want to share with you a promise that I have titled the “Safety Strap.” [NEXT SLIDE] Total time: 29:40 Time remaining: :20
- “ Keep your lives free from the love of money and be content with what you have, because God has said, ‘Never will I leave you; never will I forsake you.’” God has not left His throne. He knows when you stand up & when you sit down. You are made in His image and you are important and valuable. Love the Lord, not money, with all your heart, soul and mind. He loves you and He will NEVER leave you or forsake you. Cling to the safety strap! Let’s pray.