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Stewardship Lifestyle Seminar Workbook


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Stewardship Lifestyle Seminar Workbook

  1. 1. The Stewardship Lifestyle SeminarApplying God’s Word to Everyday Life
  2. 2. What’s a Christian Worldview?As Christian Financial Advisors we strive to use the Scriptures to help our families make smart andgodly choices. This relates to their marriage, children, tax and estate planning and all areas of theirfinancial lives.What do we base our choices and decisions on? Many of us follow the examples or leadership of others.We are influenced by music, television, movies and friends. A recent nationwide survey completed bythe Barna Research Group determined that only 9 percent of “born- again” believers in Americans had a“biblical” worldview.Barna’s survey also connected an individual’s worldview with his or her moral beliefs and actions. Barnasays, “Although most people own a Bible and know some of its content, our research found that mostAmericans have little idea how to integrate core biblical principles to form a unified and meaningfulresponse to the challenges and opportunities of life.”1. WHAT’S A WORLDVIEW?Whether conscious or subconscious, every person has some type of worldview. A personal worldview is acombination of all you believe to be true, and what you believe becomes the driving force behind everyemotion, decision and action. Therefore, it affects your response to every area of life: from philosophy toscience, theology and anthropology to economics, law, politics, art and social order — everything.Someone with a biblical worldview believes his primary reason for existence is to love and serve God.For example, let’s suppose you have bought the idea that beauty is in the eye of the beholder (secularrelative truth) as opposed to beauty as defined by God’s purity and creativity (absolute truth). Then anyart piece, no matter how vulgar or abstract, would be considered “art,” a creation of beauty.2. WHAT’S A BIBLICAL WORLDVIEW?A biblical worldview is based on the infallible Word of God. When you believe the Bible is entirely true,then you allow it to be the foundation of everything you say and do.Do you have a biblical worldview? Answer the following questions, based on claims found in the Bibleand which George Barna used in his survey: • Do absolute moral truths exist? • Is absolute truth defined by the Bible? • Did Jesus Christ live a sinless life? • Is God the all-powerful and all-knowing Creator of the universe, and does He still rule it today? • Is salvation a gift from God that cannot be earned? • Is Satan real? • Does a Christian have a responsibility to share his or her faith in Christ with other people? • Is the Bible accurate in all of its teachings?Did you answer yes to these? Only 9 percent of “born- again” believers did. But what’s more importantthan your yes to these questions is whether your life shows it. Granted, we are all sinners and fall short,but most of our gut reactions will reflect what we deep-down, honest-to-goodness believe to be realand true. (continued on inside back cover)1
  3. 3. The Truth About WealthThe Apostle Paul told Pastor Timothy to “Command those whoare rich in this present age not to be haughty, nor to trust inuncertain riches but in the living God, who gives us richly allthings to enjoy” 1 Timothy 6:17When Jesus said, “Do not lay up for yourselves treasures on earth: (Matthew 6:19), the term“lay up” did not simply speak of having possessions, but of your possessions having you.“Lay up” could be better translated “hoard or stockpile.”Jesus was not saying it was wrong to have things. He was warning against becomingmaterialistic – letting things become more important than God.God created us to love people and use things, but a materialist loves things and uses people.There is nothing wrong with having possessions and a successful career. The apostle Paul wrote,“Command those who are rich in this present age not to be haughty, nor to trust in uncertainriches but in the living God, who gives us richly all things to enjoy” (1 Timothy 6:17). God canbless a person. In fact, we read in the Bible of those who had wealth, such as Abraham, Job,David, Joseph of Arimathea, Mary, and Barnabas.Jesus did not extol poverty as some great virtue. In fact, only one time did He tell someone –the rich young ruler – to sell his possessions and give to the poor. I think it was because that manwas possessed by his possessions. Because when Jesus said, “If you want to be perfect, go, sellwhat you have and give to the poor, and you will have treasure in heaven; and come, follow me”(Matthew 19:21), the Bible says that he went away sorrowful. It was a test to see weather God wasmore important to him than his things.Money is not the root of all evil; the love of it is. The problem with wealth is not in having it. It ishow we get it. It is how we guard it. And it is how we give it.What will be your legacy? Will you be known as a wise and generous person or a worrier, ahoarder afraid of not having enough – thus trusting in your wealth? It’s so easy and natural tobegin trusting in the resources you have accumulated over the years.We need to be reminded to focus our love, time and attention on our God and Savior rather thanour gold, silver, house, toys and trinkets. While we protect and value “our stuff” we understand itis God who is in control, not the political leaders, terrorists, governments, etc.Life is choices; choices have consequences, make the right choice! Choose to makea difference. The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 1
  4. 4. Table of Contents What is a Christian or Biblical World View?............................................... Inside Cover (front & back) Sunday School “A Biblical Call to Proactive Parenting”.......................................................................................................5 Four Quarter Method of Stewardship.............................................................................................................8 The Surprise Package Company..................................................................................................................... 10 Sunday Morning Worship: Haggai 1...................................................................................................13 Priorities from a Biblical World View Sunday Afternoon Workshop Cash-Flow, Budgeting and Debt Elimination Creating a Spending Plan that Works.......................................................................................................... 16 Debt Elimination...................................................................................................................................................19 Sunday Evening Worship: 1 Timothy 6............................................................................................... 21 A Biblical Call to Wise Stewardship Monday Evening Workshop Financial, Tax and Retirement Planning................................................................................................... 24 Benefits of Starting Early (Help Your Grandchildren?)............................................................................... 29 Key Strategies of Investing............................................................................................................................... 33 Rationale for Owning Gold.............................................................................................................................. 35 Planning for that BIG Expense........................................................................................................................ 37 Affording Retirement......................................................................................................................................... 40 Sample Cash Flow Worksheet........................................................................................................................ 43 Avoiding Costly and Dangerous Mistakes in Retirement (Optional Sr. Luncheon).......................................................................................................................................... 44 Tuesday Evening Workshop Legacy & Estate Planning What Makes an Estate Plan “Christian?”...................................................................................................... 46 Estate Planning with a Biblical World View................................................................................................ 47 Personal Review Meetings (Monday and Tuesday).................................................................................. 56 Links to Download Various Forms Speaker Bio............................................................................................................................................................. 57 Copyright 2012 by The Life Financial Group, Inc. All rights reserved.2 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  5. 5. The Stewardship Lifestyle Seminar“To Worship and Glorify God through the Wise use of our Wealth”Dear Friends,Did you know that there are over 2000 verses in scripture dealing specifically with finances and planning? For over thirty years, Roy Russell and his team of dedicated, Christian financial professionals have beenputting to use their training and experience in the financial field to assist fellow believers all over the worldin addressing the need for faithful Biblical stewardship in their lives. As part of a holistic Biblical worldview,family and finances come together as instruments for great good in the hands of believers as they seek tohonor God in all things. A more thorough understanding of our personal and family finances, includinginvestments, insurance, income taxes, debt and estate planning will allow us as believers to be more faithfulstewards of all that God has entrusted to us.But it cannot stop with an understanding of our finances alone. We must study, understand, and applyGod’s word to our whole lives, including our finances, each and every day. The Stewardship LifestyleSeminar is an information- and application-rich program that will provide individuals and families withthe knowledge and understanding of God’s word and their personal finances that will make it possible forthem to be the good and faithful servants Jesus calls us to be (Matt 25:23).As Roy has often said, “instruction without application often leads to frustration.” It is for this reasonthat the Stewardship Lifestyle Seminar provides not only a Biblical foundation but a wide variety ofpractical information and application on all manners of financial topics, from basic budgeting to estateplanning. A local Christian attorney will be available as they discuss wills and trusts, and a CPA is alsoavailable for any tax-related questions.The Life Financial Group is a fee-based Financial Advisory firm, but they will waive the normal $350 fee forpersonal reviews while at your church. I hope you will take advantage of this personal review session –Roy and his team will provide a specific list of issues that need to be addressed to better plan for yourfuture. Come to the Stewardship Lifestyle Seminar with an open heart and open mind, and you’llbe blessed!Pastor Paul CaughillHigh Point Baptist ChapelGiegertown, PA
  6. 6. Key Elements • aying a foundation of biblical principles that teach wise stewardship as a lifestyle L • roviding qualified financial and legal professional to provide tax and financial counsel and P prepare legal documents based on a Biblical World View • ffering personal review sessions for believers who desire help with investing, estate planning, O household budgeting and/or getting out of debt Schedule SUNDAY • unday School: A Biblical Call to Proactive Parenting S • Morning Worship: Priorities – A Biblical World View - Haggai 1 • Workshop - Budgeting and Debt • Evening Worship: A Biblical Call to Wise Stewardship – 1 Timothy 6 MONDAY • Personal Financial Checkups – from 9am to noon (60- to 90-minute sessions) • Lunch Fellowship (optional) – Senior’s Group 12pm to 1:30pm • Personal Financial Checkups – from 1:30pm to 4:30pm (60- to 90-minute sessions) • Dinner at Church – 5:30pm to 6:30pm • Workshop - Financial Planning, Tax and Retirement Planning – 6:30pm to 8:30pm • Personal Financial Checkups – from 8:30pm to 9:30pm (60-minute sessions) TUESDAY • Personal Financial Checkups– from 9am to noon (60- to 90- minute sessions) • Lunch Meeting (optional) – Local Pastors’ Fellowship – discuss Pastors’ Taxes • Personal Financial Checkups – from 1:30pm to 4:30pm (60- to 90-minute sessions) • Dinner with family from Church (optional) – 5:00pm to 6:30pm • Workshop – Legacy Estate Planning (Wills, Trusts and Probate), Biblical World View – 7:00pm to 8:30pm  4 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  7. 7. A Biblical Call to Proactive ParentingTools to Train Your Children“Principles without Application lead to frustration”“Train up a child in the way he should go; even when he is old he will not depart from it.” – Prov. 22:61. Who learns more - the Student or the Teacher? Why? A. arents who incorrectly react to a need or a problem often cause conflict. P To be proactive you must plan • Teach your children and grandchildren (Deuteronomy 4:1-9; Ephesians 6:4). • Act differently than the world and the people around you (Romans 12:2; Ephesians 4:17). • Look ahead and prepare for upcoming dangers (Proverbs 22:3). B. Examples of proactively training children • Balancing a checkbook – can they make deposits? Write checks? Balance the account? • Securing their first job – what do they expect? What will they hear, see and do? • Buying the first car – who buys it? Makes payments? Pays for insurance and upkeep? • Planning for college – is it optional? What type? Who pays? How do they pay? • Wedding expense – is there a limit? • eceiving gifts or an inheritance – will it be misused or mismanaged? How much R is enough?2. Three Ways our Children Learn (Seeing, Hearing, and Doing) • We remember: – 10% of what we read – 20% of what we hear – 30% of what we see – 50% of what we both see and hear – 70% of what we say – 90% of what we both say and doActive learning requires that we are involved in the learning; we need to see it, hear it, and doit to really get it!! A. Your children learn by watching others – Seeing it (reading and watching others) 1. They are influenced by peer pressure (Luke 12:15). a. The world’s philosophy from the god of this world? b. Biblical Priorities from the God of the universe? 2. They often misunderstand the deceitfulness of wealth (Mark 4:19). 3. They must understand credit card dangers (Revelation 3:14-20). a. Credit card use builds the “Me first” mentality-buy now, pay later...self sufficiency. b. A typical family has 10 cards with an average debt balance of $8,000. c. Credit card studies indicate that 34% more money is spent when “plastic” is used. B. our children learn by the priorities you establish – Hearing it – Listening or Auditory Y (preaching training) 1. Are you keeping these lifestyle priorities in order? a. Your faith – salvation, sanctification, preventing stagnation b. Your family – spouse, children, parents, peers c. Your finances – give, save, spend, offerings and luxuries d. Your future – a Christian’s will The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 5
  8. 8. 2. Are you keeping these financial priorities in order? a. Giving – local church, 10% of gross income b. Saving – minimum of 10% each month - More if single or an empty-nester • Three biblical reasons to save (2 Sam 24:21-24; Prov. 6:6-8, 17:7, 22:9) • Three steps required: 1. Treat it as an absolute necessity – a new mindset (develop a conviction) 2. Delegate responsibility – payroll deduction and automatic bank transfers (ACH) 3. Always use two accounts: short-term and long-term c. Spending – paying bills, sticking to a budget • The budget is the guideline never a strait jacket • Budget busters include home, auto, groceries and personal allowances • Avoid borrowing (Proverbs 22:6-7) d. Offering – Remembering the poor (above church tithe). • Be blessed and be a channel of blessing and (Proverbs 11:25) • Doing good to others is pleasing to God (Hebrews 13:16 • Look for opportunities to put God’s wealth back into circulation e. njoying luxuries – God’s bounty (1 Timothy 6:17) E Eating out, travel, cable TV, cell phone, etc… C. Your children learn through experience – Doing it – Kinesthetic (hands-on) 1. Four-Quarter Method - weekly, repetitive training reinforces priorities a. Weekly amount starting at age six. • Simply share the household income. • Train them to manage money. • Do not directly relate it to chores. b. Four quarters every Sunday morning • First quarter goes to Jesus. • Second quarter goes into a short-term piggy bank for upcoming opportunities. • Third quarter goes into a long-term piggy bank for college, marriage, etc. • Fourth quarter is discretionary – they can give it, save it, or spend it. • Amount increases with age of the child The Four-Quarter Method is a great way to teach children to give, save and stay out of debt. c. Some helpful hints: • atch their long-term savings and invest it every Christmas into an investment M for the child. • Do not allow borrowing (no advances!) • Never allow them to spend it all. • o allowance is needed if their earnings are over $25 per week. It’s not N an entitlement. 2. urprise Package Company: look for opportunities to give – in the church and in the S community. (See page 9) a. Thanksgiving opportunities. Go to • elp your children look for individuals or families, saved or unsaved, who have a H financial need. There are many! • taple $100 to a paper entitled “Surprise Package Company.” (See page 10) S • ave your child deliver the envelope to the house by knocking on the door and H then hiding.6 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  9. 9. b. Benefits of practicing generosity • od will not hear your prayers if you close your ears to the cry of the poor G (Proverbs 21:13). • hildren begin to give of their own money. C • hildren begin to discern who should receive gifts, when they should be given, C and how much should be given. • hildren learn to be more thankful as they see the needs of others.  C D. In conclusion, we need to establish a belief or a conviction to live by a standard. 1. The shifting sands of the world’s philosophy or 2. The rock solid, consistent teachings from God’s Word. a. We must adjust our view of life: Rom 12:1-2; Eph 4-5:12 b. Our old nature vs. the new nature once we have come to faith in Christ: 2 Cor 5:17 E. God’s judgment for doing nothing - Man’s natural tendency 1. Fig tree - Luke 13:6-9; Matt 21:18-19 2. Ten Virgins: Matt 25:1-13 3. Talents of silver - Matt 25:14-30 4. Helping the poor: Matt 25:34-36 5. Good Samaritan: Luke 10:30-34 6. Building on rock or sand: Matt 7:24-27 7. What direction are you headed? How Are You Doing? These twelve suggestions may help you teach your children money habits for life. The developmental stage of each child will dictate how far you apply the topics presented. 1. Every week give each of your children some money to manage. 2. Help your children set up a giving, saving and spending plan. Teach them to invest. 3. Avoid paying children for regular household chores that are shared family responsibilities, such as washing dishes, taking out the trash, cleaning floors, etc. Consider paying them for special jobs (e.g., cleaning the garage). 4. Set a good example by being truthful about money matters. Acknowledge mistakes. 5. Be a good money manager, giving your children a good example to follow. 6. Give your children more financial responsibilities as they get older. 7. Help your children understand the difference between necessities and luxuries or needs and wants. 8. Praise your children if they have made wise decisions with their money. Be an encourager! 9. elp your children find ways to earn extra money that are age appropriate and that suit their H abilities and skills. 10. Allow your children to make mistakes and help them to understand the consequences. Do not bail them out. 11. Never co-sign a loan. Become a pro-active parent not waiting for a problem to develop. 12. Help your children look for the needs of others. They should see you giving. Learn to be generous. The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 7
  10. 10. Training Up Our Children Practical Application The Four-Quarter Method of Stewardship Being a wise biblical steward is a mindset that will affect your whole life. It needs to be demonstrated and modeled before our children copy the errors of the world and suffer the consequences. A simple and proven method that has worked in many homes is called “The Four Quarter Method of Stewardship.” It teaches the children: • Biblical Priorities • Individual Responsibility Starting at around age six, give a child 4 quarters every week as a teaching tool. This money is NOT for work or chores performed around the house. It is a SHARING OF THE HOUSEHOLD INCOME which provides the opportunity for you to teach your children about money manage- ment. If you pay the children for chores, keep that separate from what we are advocating here. The Four Quarter Method is a venue to teach, not pay for expected chores. Because they are part of the family unit they should have responsibilities every week. Go out and buy two piggy banks or small lock boxes for each child. Mark one as “short-term savings” and the other as “long-term savings.” You need to keep your lessons simple to use and to understand, so always use quarters until the child is age 13 and then add dollar bills. Explain how the quarters are to be used. Each Sunday morning when you give your children their weekly allotments, have them bring out their banks and make sure they understand how the money is to be divided up. This constant teaching tool will provide many opportunities to reinforce the underlying concepts of financial priority and responsibility. It also provides a simple method of accountability. Each year as the children get older; increase the number of quarters and write their name on a 3x5 card with the suggested breakdown and tape it to the refrigerator. Hold them accountable because it takes time to develop a habit. It’s never too late to start. Remember, you never fail until you quit trying. • The first quarter goes to the Lord. We’re not teaching a percentage of giving here; you are teaching the principle of priority! • The second quarter goes into short-term savings. This is for gifts, youth activities or upcoming events the child might participate in. • e third quarter goes into long-term savings. This is for college, graduation and marriage Th expenses. At young ages the children don’t understand all these things, BUT WE ARE TEACHING THE IDEA OF FINANCIAL PRIORITY! [Parents, learn an important point here not only for your children, but also for yourselves; never co-mingle short and long term savings.] • e last quarter is for discretionary spending. Most young children cannot even say that Th word! It is this money that they can spend, save or give away. What we are trying to establish is the concept of sequential priorities with money. This will take time; discipline and work, especially for parents with younger children, but the rewards can be great. Too many parents within the Christian community simply toss money at their children when financial needs arise. For example; your child has a field trip, a youth outing, and birthday party or even wants a specific item of clothing. The wallet or purse comes out, the money is given, and the child spends it all. WHAT HAS THAT TAUGHT THEM? Instead, look for ways to teach your children God’s wisdom in order to be an effective disciple maker for Jesus Christ.8 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  11. 11. As the children get older, increase the amount they are responsible for, using the chart below.Once they’re old enough to earn their own money, this system will have them well on their way tofinancial wisdom.Begin at ages 5-6 with four quarters; Age 6.......... $1.00 Age 9.......... $4.00 Age 12.........$7.00 Age 15.......$15.00 Age 7..........$2.00 Age 10........ $5.00 Age 13.......$10.00 Age 16.......$18.00 Age 8.......... $3.00 Age 11........ $6.00 Age 14...... $12.00 Keep these SEVEN RULES 1) Always share the household income on Sunday morning. A portion goes to the Lord each Sunday 2) Save a portion every week into both short term and long-term savings banks. Weekly savings must become an absolute part of the training. We must teach our children to become systematic savers. 3) Don’t allow the children to borrow from their siblings or parents. Also, there are no advances. Older children have a tendency to spend all their discretionary money and then go to their younger siblings for a loan. Anticipate that and stop it before it happens. NO BORROWING! 4) ever allow the children to spend 100% of their short-term savings. Teach them to always N keep some cash reserves. 5) fter Christmas help the child count up the quarters in their long-term piggy bank. If it’s A more than the required minimum reward them and match what they saved. After all, the scripture does teach reward for our faithfulness. Open up a mutual fund with that money and teach them about investing. Every year the long-term savings is added to their “college fund”. 6) When a child earns $25 in a week, they no longer need an allowance. It’s not an entitlement. 7) Lastly, teach your children there will never be co-signing for a bank or car loan of any kind. Don’t wait till they turn 16 and want a car. Be proactive and train early.Here’s what parents can learn from this! • o learn to give generously; to the Lord, to others and to your children so they can learn when T they are young • o save for short term, for planned as well as unexpected expenses T • o save for long term needs like a car, schooling, wedding, the house, a business T and retirement • To keep separate accounts for short and long term needs • To do your best to avoid credit debt • To be thankful for God’s blessing on wise and careful stewardship • o use every opportunity to teach your children about wise T money management The Word or the World? Are you building your life and your family on the rock of the Word, or on the shifting sands of the world’s philosophy? Remember; if you don’t inspect it, don’t expect it! The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 9
  12. 12. Training Children, Part 2 The Surprise Package Company Our human nature always puts ourselves first. Some call it self-preservation; God calls it selfishness, a part of our sin nature. We often think about my time, my car, my kids, my house, my job – it’s all about me. Our children are no different. We hear them say, “…my teacher, my bike, my room…” Life seems to revolve around me; at least many of us like to think that way. What does the Bible say about this concept? Is there anything wrong with it? Flesh out... Generosity is being unselfish, not always focusing on me but on others. Philippians 2:4 reminds us that we should look not only to our own interests, but also to the interests of others. For many it is not natural to think about the needs of others. This is a learned habit, trait, and skill. We read in 1Timothy 6:17-19 that Pastor Timothy was told to hold the people in his church accountable for the way they handled their money. He was to command his people to do good, to be rich in good deeds, and to be generous and willing to share. By doing this, they would lay up for themselves treasures in Heaven. In these three verses we see three things: our attitude, activity and accomplishment. The Attitude of our wealth - not arrogant, haughty or high-minded The Activity of our wealth - ngage in good works, become rich in good works, be liberal or e ready to distribute and to partner up, being willing to share The Accomplishment of our wealth – reparing for the Bema Seat of Christ where we will be p judged for our stewardship and service As parents, especially fathers, we have the responsibility and the wonderful opportunity to train up our children in God’s ways. While our children are still under our roofs, we need to be proactive rather than reactive, as Proverbs 22:3 reminds us. We have the opportunity to teach them discernment and discretion as they look for the needs of others. In our household, every year around Thanksgiving we would make time to sit down with our four children and talk about what God expects from us. We would start with our attitude towards things. As a steward or manager we are responsible to take care of what we are entrusted with. For example: their bike, their clothes, their toys, and their room. We are made in the likeness of God and therefore must consider that God is a God of order not disorder. We should plan to take care of things and protect them. Secondly, we remind our children of their activity with wealth. Each of our children has received a weekly allowance from the time they were 6 years old. For more information on this topic that we call the Four Quarter Method of Stewardship, please refer to Training Children to be Generous - Part 1. After they give to their local church, save for short-term and long-term needs and opportunities, they should remember the poor. They need to actively be on the lookout for the needs of others in the community. Thirdly, we teach that wise stewardship is smart and they will be rewarded for their willingness to share and encourage others. We would often speak with our pastor and other church pastors in the community, seeking to reach out to individuals or families in need. A whole new world was opened up to my children.10 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  13. 13. In the past they never knew of the financial needs and struggles of families in the area. They werewillingly blinded to the needs of others since they had so many of their own. Life happens andwe are all busy. We could say, “I don’t have the time, money, or interest to focus on others when Ihave so many of my own problems and worries.”Giving outside the church does not come naturally but must be a planned event. Too often weclose our ears to the cry of the poor and suffer the consequences (Proverbs 21:13). Giving to thepoor is compared to lending to the Lord. We read in Proverbs 19:17, “Whoever is generous to thepoor lends to the LORD, and he will repay him for his deed.”As a family we then decide on four individuals or families we can bless. We look for genuineneeds such as loss of a job, health problems, loss of a spouse, etc. We are careful not to enable thelazy or help the foolish. It takes time and is not always easy but the rewards are priceless!We staple a $100 bill to a page like the one shown above. The child takes it, folds it, and places it inan envelope. They write the person’s name on the front and prepare to deliver it.As Christmas approaches we drive out to the families’ houses and each child sneaks up to a houseto deliver the envelope while the rest of us are parked out of sight. Their goal is to slip it in thedoor and ring the doorbell several times or knock hard and run. It is fun not getting caught!They watch in secret to see the person open the envelope. They occasionally know the people whothey are giving to, but are instructed never to tell anybody.Each year as the parent, I must plan for the next Surprise PackageCompany and save money. We normally would give away $400($100 per child). This will be a sacrifice for many with youngchildren but should become a priority.As the children grow older they look forward to this event and wantto give of their own money. We instruct them not to give all theirshort-term savings away and not to everybody they happen to see.This is where discernment and discretion come in. What awonderful teaching opportunity! They also grow more thankful forwhat they have and no longer take things for granted. They learncontentment along with godliness which is great gain(1 Timothy 6:6).NOTES: The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 11
  14. 14. from TheSurprise Package Company From Your Frien ds at Enjoy a Blessed New Year! ~ Remember to bless others even as you are blessed ~
  15. 15. “Priorities from a Biblical World View”Misplaced PrioritiesHaggai 1:1-14 and Luke 12:15 – 21The goal: embrace Biblical priorities, challenge encourage each other.1. Are Priorities Important to God? A. Diagnosing Misplaced Priorities (Haggai 1:1-4) 1. Lost focus and the Temple lay in ruins 2. Their focus was on themselves and their comforts 3. They were not rich towards God B. The Consequences of Misplaced Priorities (Haggai 1:5-11) 1. Here we learn that when we edge out of God’s priorities, life stops working for us. 2. God says, “Consider your ways” – There is a cause-and-effect relationship between Israel’s misplaced priorities and the problems that they’re experiencing in the book of Haggai. 3. Poor economy, crop failure, overall discontentment C. The Solution to Misplaced Priorities (Haggai 1:12-15) 1. People began with reevaluation, with seeking God’s guidance on where their priorities were out of line 2. They were distracted by the busyness of life and did not take time to honor God. 3. God resists the proud but gives grace to the humble – 2 Peter 3:15 How should we prioritize the financial choices we make? Here are several Timeless Truths when properly applied will revolutionize our lives and align our priorities with Scripture. These are not new but their applications may surprise you as we review a principled guideline for handling 100% of God’s money.2. Let’s Examine Five Timeless Truths A. God is a God of order, sequence, and priority. It’s the very nature and Character of God. 1. een in creation itself (Genesis 1). In the beginning God…He brings order out S of disorder. 2. emonstrated in the New Testament church (1 Corinthians 14:40 “But all things should D be done decently and in order.”). There is a plan. 3. Illustrated in the wisdom of Proverbs (Proverbs 24:27 “Prepare your work outside; get everything ready for yourself in the field, and after that build your house.”). 4. Are we orderly? Kitchen, garage, bedroom and basement? Finances? B. od has deemed the family as the foundation stone of His plan for mankind. The family G is key, and Satan wants to destroy it. 1. Instituted by God in the earliest moments of human history (Genesis 2). 2. onfirmed through New Testament truth - 1 Timothy 5:8 without a plan we have denied C the faith (the Word of God). 3. Established as the key to passing divine truths through the generations. Deuteronomy 6:4-9 “…teach them diligently…talk of them when you sit in your house, and when you walk by the way, and when you lie down, and when you rise.” The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 13
  16. 16. C. God wants our life choices to bring glory to Him. It’s all about our Testimony. 1. Lived out through the lives of Noah and the patriarchs (Gen. 6 – Numbers). 2. ommanded through Paul to New Testament Christians (1 Corinthians 10:31 “ all C for the Glory of God” – Do you go into debt for the glory of God?). Average family carries over $7,000 in credit card debt. 3. Presented as the will of God for all believers (1 Peter 2:15 “For so is the will of God, that with well doing ye put to silence the ignorance of foolish men” D. God wants His people to help those who are less fortunate. 1. Established in the third or charity tithe of the Mosaic system (Exodus – Deuteronomy). Three tithes: Levitical, Festival and Charity. 2. Confirmed in New Testament truth (James 2:15-17, 1 John 3:17-18). 3. Manifested as God’s love in us (1 Corinthians 8-9). E. God wants to bless His people who obey. 1. Illustrated in His nation’s provision (Deuteronomy 6-8 – Blessing Curse). 2. Given by God for his children to richly enjoy (1 Timothy 6:17). 3. Promises to share His riches with His children throughout time (Rev. 21:7). 3. pplication of Financial Priorities to the Christian Steward A Overlay of Financial Application A. IVING – Returning to the Lord that which is His is the first financial priority G and privilege. 1. “Honor the Lord…with the first fruits” (Proverbs 3:5-9). 2. “Every tithe…is the Lord’s” (Leviticus 27:30) – It is holy unto the LORD. 3. “…they gave themselves first to the Lord” (2 Corinthians 8:5). 4. “Give and it will be given unto you…” Luke 6:38 5. Have you robbed God in tithes and offerings? Malachi 3:8-11 Tithing isn’t the ceiling of giving; it’s the floor. It’s not the finish line of giving; it’s just the starting blocks. Tithes can be the training wheels to launch us into the mind-set, skills, and habits of grace giving. Ironically, many people can’t afford to give precisely because they’re not giving. If we pay our debt to God first, then we will incur His blessing to help us pay our debts to others. (Haggai 1:9-11). Giving is a step of obedience just as baptism is a step of obedience. B. SAVING – Setting aside to protect one’s family is the second financial priority privilege. 1. “Precious treasure and oil are in a wise man’s dwelling” (Proverbs 21:20). 2. “In the house of the righteous there is much treasure” (Proverbs 15:6). 3. If anyone does not provide for…his own household, he hath denied the faith...” “ (1 Timothy 5:8) Saving in order to protect your family must become a conviction, not a convenience. It cannot be “I’ll save if there is extra.” Rather, “I must set aside reserves before I pay my first bill.”14 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  17. 17. C. PENDING – Being timely, honest, and just with creditors is the third financial priority S and privilege. 1. Pay to all what is owed to them – taxes…revenue…” (Rom 13:7a – give everyone what “ you owe him). 2. “The wicked borrows but does not pay back” (Psalm 37:21). 3. urpose of Work: “…so that you may walk properly before outsiders and be dependent on P no one.” 4. (1 Thessalonians 4:12). It’s about our testimony! Being timely with creditors is vitally important, but the wise steward first honors the Lord and protects his family with savings. We must choose to live at a level of consumption that is lower than our income. D. FFERINGS – Being mindful and generous toward the needs of others is the fourth O priority and privilege. 1. “Only they would that we should remember the poor” (Galatians 2:10). 2. On the first day of the week, each of you is to put something aside and store it up…” “ (1 Corinthians 16:2). 3. …your abundance at the present time should supply their need, so that their abundance “ may supply your need, that there may be fairness.” (2 Corinthians 8:14). 4. “Give and it will be given unto you…” (Luke 6:38) 5. 2 Cor 9:6-11 Sow little reap little 6. Don’t be Stingy: God says, “Whoever closes his ear to the cry of the poor will himself call out and not be answered.” (Proverbs 21:13). In Isaiah 58:6-10, God says that His willingness to answer our prayers is directly affected by whether we are caring for the hungry, needy, and oppressed. Want to empower your prayer life? Give. 7. What’s the Purpose of Prosperity? God prospers us not to raise our standard of living, but to raise our standard of giving. After managing well the first three responsibilities, financial freedom now allows freewill offerings. God asks that I consider the circumstances of others before I spend on personal pleasures. Are there individuals, mission efforts, or other ministry works I should assist? E. LUXURIES – Rightfully enjoying God’s abundance is the fifth priority and privilege. 1. “The Lord blessed the latter days of Job more than his beginning.” (Job 42:12). 2. “…God, who richly provides us with everything to enjoy” (1 Timothy 6:17). 3. “What do you have that you did not receive?” (1 Corinthians 4:7) Now that I’ve considered my obligations and opportunities to the Lord, my family, creditors and others, I am free to enjoy the great blessings God has richly given. Choosing to be rich toward God demonstrates wise stewardship and is a testimony to the world.It is required in Stewards that they be found faithful. (1 Corinthians 4:2) The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 15
  18. 18. Creating a Spending Plan that Works DO I REALLY NEED A BUDGET? “Budget” is often treated like a four-letter word. However a budget is simply a spending plan – a tool to help you make the best possible use of your resources. Budgeting is not necessarily about getting out of debt, but it is about wise stewardship, and this applies to everyone, from the Janitor to the CEO. Budgeting = Planning = Wisdom. It is required in Stewards that they be found faithful – 1 Cor 4:2 I. PRINCIPLES TO UNDERSTAND – Proverbs 27:23-27 A. Your purpose on earth is to glorify God (Matthew 5:16). B. A Wise man builds his house upon the rocks (Matthew 7:24-27). C. God rewards those who diligently seek Him (Hebrews 11:6). D. Everything you have belongs to God (Exodus 9:29; Psalm 24:1; 1 Corinthians 10:26). E. God is your provider (Deuteronomy 8:18). F. You must honor God with everything He has entrusted to your care (Proverbs 3:9-10). G. The husband is to bear the emotional burden for the family’s finances (1 Timothy 5:8) H. You are accountable for your stewardship (1 Corinthians 4:2; Romans 14:12). I. Tithes, offerings, and giving are the will of God (2 Corinthians 8:5). J. Financial success comes through hard work (Proverbs 10:4; 22:29). II. THE BUDGET WORKSHEET A. Record your income 1. List gross income for both spouses from your jobs. 2. Subtract all deductions to arrive at your net spendable take-home pay. 3. List all other forms of income: social security, investment, pension, rents, etc. B. rioritize your spending. See Priorities from a Biblical Worldview (pg. 12-14) notice that P these are sequential priorities. Giving comes first than savings than spending and so forth. 1. Give – this is our 1st priority and privilege a. Start at 10% of your income to your local church b. Any giving above 10% or any ministries other than your church falls into the offerings category. 2. Save – our family is the 2nd priority (Goal: 10% of income) a. Emergency Fund: If you have debt, save $1,000 and proceed with debt snowball (see Debt Elimination, pg. 18). If you are already debt-free, start by setting aside 3-6 months living expenses. b. Short Term: These are funds that you expect to need over the next 12 months (taxes, insurance payments, vacation, Christmas and birthdays, etc.). Add the value of all these bills and then divide by 12. Set up an automatic savings plan to put that amount into savings monthly until needed. c. Long Term: This is for large expenses like education, marriage, automobile, retirement, etc. If your company offers a matching 401k, take full advantage of the match. Above that, consider saving in your IRA or Roth IRA. You may want to contact The Life Group or another advisor to discuss your options. 3. Spend – on living expenses or needs a. Housing: you should not spend more than 25% of your take-home pay on mortgage or rent16 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  19. 19. b. Groceries: consider paying for groceries in cash. This may prevent overspending. Also, plan out a weekly meal plan and then shop to fill the plan not the pantry. c. Insurance: consider paying your insurance premiums annually if possible. Many insurance companies charge less for this. d. Personal Allowance: to avoid overspending on things like coffee or buying lunch at work, give yourself a weekly or monthly allowance (i.e. $10 or $15 a week). e. ebt Payments: If you have debt (other than your primary D mortgage) we recommend that you follow the debt National Household snowball (see Debt Elimination, pg. 18) Spending Averages 4. Offerings for the needs of others – come before luxuries. Percent a. Giving to your local church beyond 10%, Faith Category of Spending Promise Missions Food 13.9% b. Those in your community that are in financial need. Clothing 4.2% (See The Surprise Package Company, p. 9 ) Housing 23.3% 5. Luxuries - Enjoy the fruits of your labor (eating out, Personal 11.4% vacations, hobbies, Cable TV, etc.) Medical 19.7%III. Budgeting Tips Transportation 8.9% A. isualize your cash flow. Understand that peaks and valleys V Other 18.6% will happen. This helps you see the need to set aside funds for Total: 100.0% those difficult times. Source: Statistical Abstract of the United States: 2012. Table 677 B. Use a saving method. 1. Envelope system 2. Money market-automatic bank transfers. This is usually the best option. C. Budgeting tools that help you. 1. Quicken, other computer programs (Excel), etc. 2. – free online budgeting and cash flow monitor 3. Our Spending Plan Worksheet – see page 36 D. ecord your actual expenses as you pay your bills (tracking). This will provide the R information you need to make next year’s budget E. tick with it! This is the only way to measure your S money and avoid future debt. Biblical Stewardship is a lifestyle that displays wisdom in your choices. F. stablish Accountability – If married, work together E with your spouse. If single, find an accountability partner.IV. What If It Doesn’t Work? A. ry to determine God’s reasons: Do I really need it or T Is He testing my faith? Did I misspend the funds He provided? 1. Have I violated the financial principles found in God’s Word? Give and be financially blessed............................................................................ Proverbs 11:24 Scorning correction (Pride brings poverty)........................................................Proverbs 13:18 Planning leads to profit, haste to poverty..............................................................Proverbs 21:5 Stinginess – Listen to the cry of the poor............................................................Proverbs 21:13 Get-rich-quick schemes........................................................................................ Proverbs 28:19 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 17
  20. 20. 2. Does God have a deaf ear to your request? Idols of the heart (money or possessions)...................................................................... Ezk 14:3 Living in sin or disobey the law.................................................................... Proverbs 5:29; 28:9 Sin hinders prayer.............................................................................................................. Isa 59:1; Unforgiving spirit - Selfishness...............................................................Mark 11:25; James 4:3 With faith not double-minded...................................................................................James 1:5-8 Good relationship with spouse....................................................................................1 Peter 3:7 Dishonoring Parents.....................................................................................Ex. 20:12; Eph 6:1-3 B. o you rely on God’s will or MasterCard - Prayer or Plastic? “You do not have, because D you do not ask. You ask and do not receive, because you ask wrongly, to spend it on your passions.” James 4:3 C. relationship requires two-way communication. Be patient; God does answer prayer. A Remember, the answer can be yes, no or wait. The rich rules over the poor, and the borrower is the slave of the lender. Proverbs 22:7 Helpful Resources • Our Website: • e Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey. Th • 48 Days to the Work You Love by Dan Miller. • inancial Parenting: Showing your Kids that Money Matters by Larry Burkett. F • oney, Possessions and Eternity and The Treasure Principle by Randy Alcorn. M • Others. NOTES:18 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  21. 21. Debt Elimination: Free to Serve The wicked borrows but does not pay back, but the righteous is generous and gives Psalms 37:21I. Debt Elimination Starts in the HEART! A. cknowledge your sin of poor stewardship, if necessary. A “If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.” (1 John 1:9). B.Acknowledge your need of help. “God is our refuge and strength, a very present help in trouble.” (Psa 46:1). “Let us then with confidence draw near to the throne of grace, that we may receive mercy and find grace to help in time of need.” (Heb 4:16). C. ake a commitment to the Lord to be a godly steward. M “I appeal to you therefore, brothers, by the mercies of God, to present your bodies as a living sacrifice, holy and acceptable to God, which is your spiritual worship.” (Rom 12:1)II. Debt Elimination Requires CHANGE! A. Determine where you are financially. Debt is a worldwide 1. List all of your debts. epidemic. In order to 2. Inventory your assets. protect our families from it, 3. Complete a household budget. we must change the way we a. Identify your income sources and amounts. treat money. It all starts with b. Identify your financial obligations. an acknowledgement that B. Stop going into debt. Stop the financial bleeding! God owns all things and When you’re in a hole, know when to stop digging! that the way we handle C. Start using a disciplined spending system: money reveals who 1. Envelopes or what we worship. 2. Savings Account for annual bills (taxes, insurance, vacation, Christmas, exc.) -Tim Russell a. Add up all these expenses, divide by 12 and set that amount aside monthly. b. Withdraw from account when bill comes in to avoid debt. 3. Electronic Tracking (Quicken or Most debt problems are a result of overspending, rather than lack of income. D. Establish accountability. 1. If married, start with your spouse 2. Close friend or pastor who you can confide in 3. Christian Financial Advisor E. Develop a repayment plan. 1. Reduce your expenses. a. Most debt problems are a result of overspending, rather than lack of income b. liminate luxuries and excess spending (i.e. cable TV, eating out, impulse spending, E and coffee on the way to work…) c. Sell unnecessary assets (EBay, Craigslist, yard sale) The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 19
  22. 22. 2. Increase your cash flow. a. Sell unneeded stuff b. You may need extra work temporarily. c. Increase exemptions to reduce tax refunds. 3. Work your “Debt Snowball.” a. Live on a strict budget b. Build up a Starter Emergency Fund ($1,000) c. List debts from smallest to largest total balance, excluding your mortgage. d. Start by paying as much as you can on your smallest debt and make minimum monthly payments on the others. e. fter your smallest debt is paid off, roll that payment over to the next smallest and A repeat until you’re debt free. f. hen you have to dip into your Emergency Fund (EF) stop the debt snow ball W (pay minimums on all balances) and refill EF back to $1,000. g. See Dave Ramsey’s The Total Money Makeover for more details. Extra Paid on Debt: $200 Name Interest Rate Balance Minimum Payment New Payment 1 Sears 16% $450 $50 $50 + $200 = $250 2 MasterCard 18% $650 $30 $30 + $250 = $280 3 Parents 0% $1,600 $200 $200 + $280 = $480 4 Visa 23% $1,800 $30 $30 + $480 = $510 5 Car 10% $7,000 $400 $400 + $510 = $910 6 School Loan 6% $9,000 $200 $200 + $910 = $1,110 NOTES:20 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  23. 23. A Biblical Call to Wise Stewardship1 Timothy 6The goal: Doing the Will of God as it relates to our FinancesYour personal stewardship affects more than your immediate family.Does your pastor have any business speaking to you about your private financial matters?Who wrote 1st Timothy? To whom was it written?It was Timothy’s God given responsibility as a pastor to minister the Word of God to those whohad wealth regarding the exercise of personal stewardship.1. WHAT IS STEWARDSHIP? A. A Manager or Overseer of someone else’s estate • Joseph – Gen 39:4; 43:19 • Pastors – Acts 20:28 B. The care for and use of all entrusted to us C. We are Managers of God’s Estate: Psalms 24:1 i. Must be Faithful – 1 Cor 4:1-2 ii. Must be Accountable – Rom 14:11-122. WHY HEAR A MESSAGE ON STEWARDSHIP? A. Lack of teaching – Acts 20:27, 1 Tim 6:17 It’s often limited to just tithing or fund raising. Stewardship is not simply tithing B. ost Financial Advisors teach how to build and protect wealth and pass it on to your M children, often to their harm. Few provide guidance or wisdom from Scripture. Psalm 1:1 1 Timothy 6:17-19 17 As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of richest, but on God, who richly provides us with everything to enjoy. 18They are to do good, to be rich in good works, to be generous and ready to share, 19thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life. C. ur nature – selfish and impulsive – Mark 4:19 O Indebtedness can make you a slave to an unwanted master - Proverbs 22:7 D. amilies are destroyed from mismanagement – over 90% of marital problems are related F to finances. E. Families can be torn apart over estate disputes - We will be held accountable for our choices3. HOW SHOULD YOU FUNCTION AS A STEWARD? A. hat does money do to your Attitude? W 1 Timothy 6:17 As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of richest, but on God, who richly provides us with everything to enjoy. Even though the congregation may be intimidating, the pastor is commanded to teach the biblical responsibility of stewardship and exhort his congregation to practice it with eternity in view. The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 21
  24. 24. A lot of folks are relieved and thinking, “Not me, I’m not rich” Can you answer the question; how do you define wealth? Defining Wealth on a Global Scale Research finds that assets of just $2,200 per adult placed the household in the top half of the world’s wealthiest. To be among the richest 10% of adults in the world just $61,000 in assets is needed. If you have more than $500,000 you’re part of the richest 1%, the United Nations Study has found. (Source: Dow Jones Financial Advisor Service January 2007) It looks like we are all back in the ball game! 1. o not be high-minded or arrogant. Don’t have a high esteem of self. Are you part of the D upper middle class? 2. Do not trust in uncertain riches. Do not let wealth be your source of dependence or confidence. Did you pray today, “Lord, give us today our daily bread.”? NO, why? Because it was already in the refrigerator or cupboard. 3. o keep your trust in the living God. God gives us richly all things to enjoy, so trust Him. D B. e right Activity with your wealth Th 1 Tim 6:18 They are to do good, to be rich in good works, to be generous and ready to share 1. Work good deeds. Engage in the work, get involved 2. Become rich in good works – it’s a learned behavior. 3. Be ready to distribute to others a. Proverbs 11:25 Whoever brings blessing will be enriched, and one who waters will himself be watered. b. Proverbs 11:24 One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want. c. roverbs 19:17 Whoever is generous to the poor lends to the LORD, and He will repay P him for his deed. 4. Be willing to share (from koinonikos, meaning to partner or fellowship). 5. Consider Christian School or Camping ministry – They both are labor-intensive but not revenue-intensive. The Christian workers are grossly overworked, under-paid and quickly burned out. We then find another group of dedicated believers and put them through the same meat grinder. C. hat will stewardship Accomplish? W 1 Tim 6:19 thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life. Also seen in 1 Tim 6:12 1. Lay-up treasure in store for yourself - Matt 6:19-20 Self-serving? 2. John 17:3 Seize the truth of your salvation, lay hold to this truth! 3. Matt 6:21 Your heart follows your money – Focus should be on the future, your future in Heaven with your God. 4. “The time to come” is also called the Bema Seat or Judgment Seat of Christ where we will be judged for our Stewardship and Service. This is not the Great White Throne Judgment where the unsaved are condemned. 4. WHY IS STEWARDSHIP SO IMPORTANT? A. On a Personal Level 1. t affects everyone in the church - 1 Corinthians 12:12 “…the body is one and has I many members…” 2. You will give an account – 1 Corinthians 4:2, Romans 14:12 3. How you leave your estate is as important as how you managed it while you were living. This is your final act of stewardship.22 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  25. 25. 4. May disqualify you from service – Titus 1:7, 1 Tim 3:1-7 Impacts your personal testimony – Mat 5:16 “Let your light shine before others, so that they may see…and give glory to your Father who is in heaven” 5. Stewardship is an area in which you can witness and recognize the work of God in your life – 2 Cor 8:7 Paul says that we should abound in giving. 6. Stewardship impacts your personal testimony and your ability to reach family, friends, neighbors and co-workers with the Gospel – 1 Cor 4:1-2; Matt 5:16 B. On a Corporate Level – Your stewardship affects many areas of local church ministry. 1. astoral compensation – 1 Timothy 5:17. A church reaps what it sows! P Are you using Bible principles to pay your pastor? Consider the double honor principle found in Scripture where he’s either paid twice the average salary or very good salary with much respect. 2. Property management – Proverbs 3:9 3. Missions support, the needy, fulfilling the Great Commission 4. Keep priorities in order: Build and strengthen the church before you increase missions giving. 5. Educational materials and venues (Camp, VBS, etc.) – What does the world see?Stewardship is not an Option - Will you hear Christ say, “Well done, thou good and faithfulservant: thou hast been faithful over a few things, I will make thee ruler over many things:enter thou into the joy of thy lord.” Do our financial choices display wisdom? Do our prioritiesdemonstrate that? Life is choices, choices have consequences, and we must make the right choice.How can you put God’s Wealth back into circulation? Look for an excuse to bless others.Have you thought about providing a Challenge Grant or Anonymous Matching Gift? Examples include: Student scholarships, mission trip, church need, etc.Notes: The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 23
  26. 26. Financial, Tax, and Retirement Planning I. inancial Success comes from obeying Scripture and applying priorities to our choices. F Life is choices; choices have consequences; make the right choice! Financial Freedom is a choice, not a dream. Anyone can be financially free. You choose how your life is going to look and you’re responsible for making it happen. No one is going to do it for you. Financial freedom is not only your choice, it is your responsibility. A. s God’s Money Manager, my A Financial Responsibilities are: Providing for your family and avoiding debt 1. First to the Lord is wise! 2. Second to my family I Tim 5:8 – family provision is commanded 3. Third to my creditors Pr 13:11 – he who gathers money little by little... 4. Fourth to others or to God’s Pr. 21:20 – the wise have reserves... work (Sacrificial giving) Pr. 22:3 – the prudent look ahead... 5. ifth to rejoice in God’s F Pr. 21:5 – planning results in plenty... rich blessings Pr. 22:7 – borrower is in bondage... B. Remember the Priorities of God and then Family 1. Both Testaments urge wisdom (Prov 21:5, 22:3 James 3:13) 2. Both Testaments urge family protection (1 Tim 5:8, Prov 21:20) II. Short-Term Saving A. hort-term savings is always a priority over Long-term investing S B. Remember – If you don’t earn interest, you will pay interest! C. Short-Term, “liquid” Cash Savings for emergencies and opportunities 1. Saving short-term is wise – 10% of your monthly income is a good place to start 2. Find the bank that offers the best interest rate on savings accounts a. What kind of interest are you getting from your local bank? b. Internet banks” often have better rates – “ check 3. Remember Proverbs 21:20 The Wise not the Rich have savings! 4. Build and maintain a cushion for opportunities and emergences. Set a goal of several thousand dollars (3 to 6 months’ earnings is wise) D. et’s look at some real life facts: L The Personal Savings Rate has been in an overall declining trend for several decades. • 50% of Americans have less than one month of savings saved for emergencies • 61% are living paycheck-to-paycheck III. Long-Term Saving and Investing A. Six Rules for Investing 1. Invest conservatively, within different asset classes. 2. Look for a ten-year track record of the fund manager (not the fund). 3. Reduce or avoid investing in “sin stocks.” 4. Keep it simple! 5. Minimize or avoid surrender redemption fees. 6. Use independent, third-party research like Morning Star Publications. NOTE: Investing is not like gambling. We typically invest with our head using logic or reason but often sell out of fear or emotion. Like farming it takes time and patience to reap anything of value. Lottery tickets and Casinos are gambling and not wise.24 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  27. 27. Personal Saving Rate (PSAVERT) Source: U.S. Department of Commerce: Bureau of Economic Analysis 15.0 12.5 10.0 (Percent) 7.5 5.0 2.5 0.0 1950 1960 1970 1980 1990 2000 2010 2020 Shaded areas indicate U.S. recessions. 2012 B. Where is wisdom? 1. From our experience with families just 26% of adults surveyed think they could accumulate $200,000 in net wealth in their lifetime. Questions for you to answer... 2. 21% said a lottery win would be the most What are your rules for investing? practical strategy for accumulating several hundred thousand dollars. 3. But if you save $200 monthly from age 30 to 65 and earn an average of 9% per year you will How do you display wisdom? have over $500,000. C. Where can we find $200? 1. Reduce: Eating out – once per month or per quarter How will you find $200 each and every month? 2. Buying lunches and snacks 3. Buying coffee, soda and bottled water 4. Overall Consumption! 5. Avoiding tax-refunds 6. Extra work = extra income Stocks - Ownership Bonds - Debt Mutual Fund - Container REIT - Real Estate D. Most Common Investment Terms: 1. Stocks: Ownership in a public company by purchasing common shares of the company. A round lot of stock is usually 100 shares. For proper diversification you need to purchase a variety of stocks in different sectors and asset classes of the market. Generally you should start with $50,000 to build a portfolio. The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 25
  28. 28. 2. Bonds: Bonds are the debt of a government entity or a corporation. A bond is simply evidence of a debt and represents a long-term IOU. US Savings bonds are the most common. Buy at 50% discount to face value. Bonds issued after June 2003 reach face value in 20 years. These newer bonds are paying very low interest and usually not recommended. Older bonds are generally paying a slightly higher rate of interest but they stop earning interest after 30 years. Other types of Government Issued Bonds include T-Bills, Notes, and I-Bonds. Bonds are also issued by Municipalities and Corporations to fund specific projects. i.e. Sewer Authority Bond, Hospital Bond, Community Development Bond, etc. All types of bonds have a maturity date (when the principal must be repaid) a stated interest rate (also known as a coupon or “coupon rate”), how often the interest will be paid and the term of the loan. It is important to understand that the relationship between bond prices and bond interest rates is an inverse relationship; when interest rates rise, bond prices generally fall and vice versa. If a bond is sold prior to its maturity date, you may receive less that the principal amount. If a bond is held to maturity then you will receive all interest payments plus your original investment, barring default by the issuer.  I-Bonds I-Bonds are a form of inflation-protected debt, available with two rates: a fixed rate set when the bond is purchased, and another rate, adjusted for inflation every May and November. Benefits: • Exempt from state and local taxes • Can be held for up to 30 years, but can also be redeemed in full after just 12 months Drawbacks: • Only up to $10,000 can be invested in I-Bonds each year • Typically offers relatively low return on investment 3. Mutual Funds: An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus. One of the big advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. The value of mutual fund shares is determined daily (also known as NAV, Net asset value).26 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  29. 29. Most mutual fund shares can be purchased or redeemed as needed, but the price will fluctuate with market conditions; shares, when redeemed, may be worth more or less than their original cost. a. Some can be set up with $50 monthly but others require $1,000 or more. b. Consult the Prospectus (legal disclosures) before investing in any mutual fund c. utual Funds and Money Market Funds are sold by a prospectus. An investment in a M money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money my investing in the fund. d. n investor should carefully consider the investment objectives, risks, charges and A expenses of a mutual fund. This and other important information is contained in the prospectus which can be obtained from the mutual fund or your financial advisor. The prospectus should be read and carefully considered before investing. 4. EIT “Real Estate Investment Trust”: R A REIT is a company that owns, and in many cases, operates income-producing real estate. To be a REIT, a company must distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends. REITs receive special tax considerations and allow individuals the ability to invest in large-scale commercial properties and receive a dividend income flow. a. Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties’ rents. b. Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans. c. Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages. d. ublicly Traded and Publicly Registered non-Traded REITS: P i. ublicly traded REITs are traded on major stock exchanges and are bought and sold P just like traditional exchange-traded stocks. Share prices can fluctuate daily. ii. on-Traded REITs are not publicly traded on exchanges and are sold by a N prospectus. Non-traded REITs are long-term investments offering only limited liquidity. Non-traded REITs may also involve additional restrictions and risks so it is important to read and carefully consider the prospectus of a Non-traded REIT before investing. The prospectus will contain information about the REIT’s structure, objectives, expenses and fees. The prospectus can be obtained from the REIT company or your Financial Advisor. Non-traded REITs are subject to the same IRS requirements as traded REITS, which include returning at least 90% of taxable income to shareholders. Because of the income feature, some investors include them in their portfolios for the potential income flow. Non-traded REITs usually have a minimum investment amount with an average holding period of 5-7 years. The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 27
  30. 30. 5. Annuities: These are best used by people needing tax deferral on account growth and/or a guaranteed lifetime income. Annuities provide specific guarantees2 and can be issued by insurance companies or non-profit organizations. Distributions made prior to age 59 ½, have a 10% tax penalty similar to an IRA. Annuities are contracts which will contain detailed information regarding risks, expenses, charges, withdrawal provisions and related benefit riders. Investors should read and study the contract carefully before investing. a. Four Types of Annuities: i. Fixed rate Annuity ii. Variable Annuity3 iii. Indexed Annuity iv. Charitable Gift Annuity – Often issued by non-profit organizations b. Common Benefits of Insurance Company Annuities i. Living Benefits: Some provide a guaranteed income benefit regardless of the market. Some are as high as 6%. ii. Death Benefits: Some provide an increasing guaranteed death benefit regardless of investment performance. iii. Investing in an annuity can defer or postpone income taxes. There is the possibility of reduced income tax, if an investor is in a lower tax bracket when they start taking withdrawals and distributions from an annuity. c. Common Drawbacks with Insurance Company Annuities i. They can be expensive ii. e various Guaranteed Living Benefit Riders and Death Benefits have Th added costs.4 iii. They can be very confusing iv. Some have long surrender penalties v. ey are not a good investment to pass on to your children – tax problems! If the Th beneficiary is a non-spouse, all gains are taxable at the beneficiaries’ highest tax bracket. This can be disastrous if your children or other heirs are in a high tax bracket already. A great option to avoid future tax problems is to add a charity or your church as a beneficiary to the annuity. They are tax-exempt. d. Gift Annuity i. gift annuity is a contract under which a charity, in return for a transfer of cash or A other property, agrees to pay a fixed sum of money for a period measured by one or two lives. A person who receives payments is called an “annuitant” or “beneficiary”. The contributed property becomes part of the charity’s assets, and the payments are a general obligation of the charity. The annuity is backed by all of the charity’s assets, not just by the property contributed. ii. otentially pays an income, for life (earnings principal). Usually set from 6% to P 9% based upon age. iii. Great income tax savings for those who itemize deductions iv. an be issued by your local church or favorite ministry. Can be used to fund a C scholarship or other goals of the donor. v. deal for gifts of $25,000 and above where the donor needs current income and I plans to provide for ministry at their death. 2 Guarantees are based upon the claim-paying ability of the insurance company. 3 Variable annuities are subject to market risk and only suitable for long-term investing. Investors should consider the investment objectives, risks, charges and expenses of the variable annuity and underlying investment options before investing. For complete information on fees and expenses, please read the prospectus carefully. 4 Living Benefit Riders may not be suitable for all investors.28 The LIFE Financial Group, Inc. Serving the Christian Community Since 1978
  31. 31. AN EARLY STARTHow $6,750 Can Grow to Over $1 MillionThis table shows four ways to accumulate approximately $1,000,000 in a tax-sheltered account byage 65. Investor A contributes $2,000 at the beginning of each year for forty years (ages 25-65);Investor B, $2,000 a year for only seven years (19-25); Investor C, $2,000 a year for only five years(age 14-18); and Investor D, even smaller sums from age 8 through 13. Investor A Investor B Investor C Investor D Year-End Year-End Year-End Year-End Age Invest Value Invest Value Invest Value Invest Value $0 $0 $0 $0 $0 $0 $500 8 $550 $0 $0 $0 $0 $0 $0 $750 9 $1,430 $0 $0 $0 $0 $0 $0 $1,000 10 $2,673 $0 $0 $0 $0 $0 $0 $1,250 11 $4,315 $0 $0 $0 $0 $0 $0 $1,500 12 $6,397 $0 $0 $0 $0 $0 $0 $1,750 13 $8,962 $0 $0 $0 $0 $2,000 14 $2,200 $0 $9,858 $0 $0 $0 $0 $2,000 15 $4,620 $0 $10,843 $0 $0 $0 $0 $2,000 16 $7,282 $0 $11,928 $0 $0 $0 $0 $2,000 17 $10,210 $0 $13,121 $0 $0 $0 $0 $2,000 18 $13,431 $0 $14,433 19 $0 $0 $2,000 $2,200 $0 $14,774 $0 $15,876 20 $0 $0 $2,000 $4,620 $0 $16,252 $0 $17,463 21 $0 $0 $2,000 $7,282 $0 $17,877 $0 $19,210 22 $0 $0 $2,000 $10,210 $0 $19,665 $0 $21,131 23 $0 $0 $2,000 $13,431 $0 $21,631 $0 $23,244 24 $0 $0 $2,000 $16,974 $0 $23,794 $0 $25,568 25 $0 $0 $2,000 $20,872 $0 $26,174 $0 $28,125 26 $2,000 $2,200 $0 $22,959 $0 $28,791 $0 $30,938 27 $2,000 $4,620 $0 $25,255 $0 $31,670 $0 $34,031 28 $2,000 $7,282 $0 $27,780 $0 $34,837 $0 $37,434 29 $2,000 $10,210 $0 $30,558 $0 $38,321 $0 $41,178 30 $2,000 $13,431 $0 $33,614 $0 $42,153 $0 $45,296 31 $2,000 $16,974 $0 $36,976 $0 $46,368 $0 $49,825 32 $2,000 $20,872 $0 $40,673 $0 $51,005 $0 $54,808 33 $2,000 $25,159 $0 $44,741 $0 $56,106 $0 $60,289 34 $2,000 $29,875 $0 $49,215 $0 $61,716 $0 $66,317 35 $2,000 $35,062 $0 $54,136 $0 $67,888 $0 $72,949 36 These$2,000 are hypothetical scenarios based on the stated contribution $0 $40,769 $0 $59,550 amounts and an assumed annual 10% rate of $74,676 $0 $80,244 37 return. The numbers stated do not reflect any particular investment and are not $82,144 any guarantee that you will $2,000 $47,045 $0 $65,505 $0 implying $0 $88,269 38 $2,000 $53,950 $0 $72,055 $0 $90,359 $0 $97,095 experience the same $61,545 performance of any investment cannot be assumed or guaranteed into the future. 39 $2,000 result. Past $0 $79,261 $0 $99,394 $0 $106,805 40 With any investment, consider any and all objectives, risks, sales charges$109,334 $2,000 $69,899 $0 $87,187 $0 and expenses before investing. $0 $117,485 41 $2,000 $79,089 $0 $95,905 $0 $120,267 $0 $129,234 42 $2,000 $89,198 $0 $105,496 $0 $132,294 $0 $142,157 43 $2,000 $100,318 $0 $116,045 $0 $145,523 $0 $156,373 44 $2,000 $112,550 $0 $127,650 $0 $160,076 $0 $172,010 45 $2,000 $126,005 $0 $140,415 $0 $176,083 $0 $189,211 46 $2,000 $140,805 $0 $154,456 $0 $193,692 $0 $208,133 47 $2,000 $157,086 $0 $169,902 $0 $213,061 $0 $228,946 48 $2,000 $174,995 $0 $186,892 $0 $234,367 $0 $251,840 49 $2,000 $194,694 $0 $205,581 $0 $257,803 $0 $277,024 50 $2,000 $216,364 $0 $226,140 $0 $283,584 $0 $304,727 51 $2,000 $240,200 $0 $248,754 $0 $311,942 $0 $335,200 52 $2,000 $266,420 $0 $273,629 $0 $343,136 $0 $368,719 53 $2,000 $295,262 $0 $300,992 $0 $377,450 $0 $405,591 54 $2,000 $326,988 $0 $331,091 $0 $415,195 $0 $446,151 55 $2,000 $361,887 $0 $364,200 $0 $456,715 $0 $490,766 56 $2,000 $400,276 $0 $400,620 $0 $502,386 $0 $539,842 57 $2,000 $442,503 $0 $440,682 $0 $552,625 $0 $593,826 58 $2,000 $488,953 $0 $484,750 $0 $607,887 $0 $653,209 59 $2,000 $540,049 $0 $533,225 $0 $668,676 $0 $718,530 60 $2,000 $596,254 $0 $586,548 $0 $735,543 $0 $790,383 61 $2,000 $658,079 $0 $645,203 $0 $809,098 $0 $869,421 62 $2,000 $726,087 $0 $709,723 $0 $890,007 $0 $956,363 63 $2,000 $800,896 $0 $780,695 $0 $979,008 $0 $1,052,000 64 $2,000 $883,185 $0 $858,765 $0 $1,076,909 $0 $1,157,200 65 $2,000 $973,704 $0 $944,641 $0 $1,184,600 $0 $1,272,920 Total Investment $80,000 $14,000 $10,000 $6,750 Investment Gains $893,704 $930,641 $1,174,600 $1,266,170 Investment Gains 11-Fold 66-Fold 117-Fold 188-Fold The LIFE Financial Group, Inc. Serving the Christian Community Since 1978 29