An interest free storehouse bringing liberty to God’s Kingdom
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Liberty Trust is a Christian application of putting savings together tat has set many free financially.
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An interest free storehouse bringing liberty to God’s Kingdom
- 1. An interest free storehouse bringing liberty to God’s Kingdom
- 2. 2 Our Desire To Free God’s people from Debt to the World so they can give with Kingdom Liberty
- 3. 3 Principles of Debt The rich rule over the poor, and the borrower is servant to the lender. Proverbs 22 v 7
- 4. 4 Principles of Debt Do not be unequally yoked together with unbelievers. For what fellowship has righteousness with lawlessness? And what communion has light with darkness? 2 Cor 6 v 14
- 5. 5 Principles of debt To your brother you shall not charge interest, that the Lord your God may bless you. Deuteronomy 23 v 20
- 6. 6 Beginnings 1987 Edgecumbe earthquake & sharemarket crash Interest rates 18-22% Nurse God’s people should pool their resources and pay off each other’s mortgages Her pastor was praying about this and he would put it into operation Some people would not be ready for this
- 7. 7 Beginnings Pastor » Praying for mortgaged families » Concerned for missionary support » Shared with church elders Church survey » Average mortgage $35,000 » Total debt $2 million » Pay $7 million interest » How could they ‘pool their resources’?
- 8. 8 Beginnings 12 months researching » Biblical principles, mathematics & legal position Model » Contribute regularly into fund » Provided interest free mortgage
- 9. 9 Liberty Trust born Commenced 1989 A registered Charitable Trust Formed under two churches » Whakatane Christian Fellowship » Whakatane Baptist Church A gift from God to the whole body of Christ
- 10. 10 Present Trustees Robert, Dairy Farmer Colleen, Senior Teacher Tom, Operations Manager Professional Engineer Jonathan, Sales Rep Kelvin, Chartered Accountant
- 11. 11 How does it work? 1. Donate to Liberty Trust for 10+ years 2. Offered interest free loan 5x donation 3. Repay loan over 7-12 years (principle only, no interest) 4. Experience debt free liberty!
- 12. 12 How does it work? For example a loan of $300,000: Donated to Liberty Trust over 10+ years (20%) $60,000 33% returned each year Govt rebate $20,000 Cost to you $40,000
- 13. 13 How does it work How much would you save in bank interest by contributing to Liberty Trust? eg. A loan of $300,000 Liberty Trust donation $40,000 Or Bank interest at 7% for 25 y $336,100 Difference $296,100
- 14. 14 Cost Compared $300,000 mortgage repaid at same rate: @ 7% interest Donation | LT Term | Bank Term | Interest $40,000 7 y 10 y $117,000 $40,000 10.75 y 20 y $258,200 $40,000 11.8 y 25 y $336,100 $40,000 12.5 y 30 y $418,500
- 15. 15 How does it work? Your contribution and loan application are flexible. You are welcome to increase or decrease your application to suit your circumstances.
- 16. 16 How does it work? Sowing then Reaping Community working together Overheads low Capital secured by registered mortgages Funds recycled to help future generations Donations given to share blessing
- 17. 17 9 Rotorua The story so far … Providing $2 million each year $16 million lent so far 220 NZ homes & churches interest free 110 now debt free! 3 Invercargill 3 Kaitaia 3 Whangarei 13 Hawkes Bay 3 New Plymouth 57 Whakatane36 Auckland 6 Palmerston North 34 Tauranga 3 Central Otago 7 Opotiki11 Hamilton 5 Wellington 3 Taupo 3 Nelson 2 5 Christchurch 2 Dunedin 1 Gisborne 1 Timaru 2 1 Mangonui 1 4 2 2 1 Balclutha 2 Warkworth
- 18. 18 Who should participate? Children Students Singles Married couples Parents Grandparents Family Trusts Churches Church workers Missionaries Ministry supporters Overseas travellers Investors Sponsorship … Everybody!
- 19. 19 When to Start? It’s never too early! By contributing some of their pocket money your children can: » Learn financial wisdom » Borrow interest free when ready » Own a debt free home » See God’s principles in action!
- 20. We are all stewards of God’s resources by obeying scripture to lend to one another without interest, we release ourselves from the death-grip of interest and revolutionise the work of the Gospel!
Editor's Notes
- Liberty Trust’s vision is to “equip the saints”. And as part of that vision, our desire is “to free God’s people from debt to the world so they can give with Kingdom Liberty”. We believe there needs to be a better alternative to borrowing money from the world. A Christian alternative. So Liberty Trust, a Christian charitable trust has been formed to address this, by giving out interest free mortgages. We believe that all Christians should own their own home, and be mortgage free as cheaply and quickly as possible, and help other Christians to do the same. Long-term or lifetime renting is not a good option. Renting is a form of debt, you are always in debt to the landlord. We at Liberty Trust believe that Christians should not wasting money paying interest to the bank, we need to be financially free, to give to the kingdom of God in a bigger way. We are a community of Christians and help each other in many ways. One way to help each other is to pay off each others mortgages. In Old Testament times the Jews would lend to each other at no interest. Shouldn’t we as Christians do the same?
- How did Liberty Trust begin? Twenty years ago four significant things happened – Interest rates rose to around 20%, we had a large earthquake in the eastern bay of plenty, the sharemarket crashed and a Whakatane nurse was praying about Christians suffering under crippling debt. She was given three words … and she told her pastor.
- He was astonished. He had been praying about the burden of interest crippling the church families and cutting into the church’s missionary support. He shared it with his elders and they all prayed about it. They took a survey of their church members. The average mortgage was $35,000 (this was 20 years ago!), together they owed $2 million, but by the time these loans were repaid they would pay $7 million in interest to the banks! There was certainly a need but how could it work?
- They spent the next 12 months in research. Frank Darcy, pastor of the Baptist Church, joined them in research into the biblical principles of such a community and together they uncovered some wonderful principles – which we have summarised in a Bible Study on Finance. They built a model to see what would happen if 6 people contributed $20 per week into a fund and took turns to borrow and repay $70,000 without interest. They discovered that it would take 12 years for the last one to receive their loan. They then increased it to 56 people and found the that it didn’t matter how many joined – it still worked.
- Finally in July 1989 Liberty Trust was formed with a financial model, charitable status, and an IRD exemption from tax. It was formed under two churches, the Whakatane Christian Fellowship and the Baptist church – who we still report to. They help us appoint trustees and we report to them regularly with our financial statements and direction. We believe that Liberty Trust is for all churches and Christians, it is a gift from God, to the whole Body of Christ.
- Kelvin has been the chairman since we began in 1989. He is the owner and manager of a Chartered Accountancy in Whakatane, with six staff. Colleen is part of the Whakatane Baptist church and has been a trustee since repaying her interest free loan. Jonathan is a trustee of the Whakatane Christian Fellowship, Chairman of a local High School has been a master builder for many years. Robert is an organic Dairy Farmer and has been involved in providing budget advice for many years. Tom McDowall is the Operations Manager of the Kawerau District Council. We also have a great support team. Our computer modelling is managed by Mark Langridge, the Information Systems manager at Environment Bay of Plenty. Our loans officer is a retired Bank Manager, and our treasurer is a qualified accountant.
- So how does it work? To receive an interest free mortgage you need to donate to the Trust first. You contribute at a rate of $10 per week for every $25,000 of mortgage asked for. You can choose any amount of mortgage. You contribute at this rate for 10 years, until you have contributed 20% of your loan application. When you reach this 10 year target you stop contributing and are offered an interest free mortgage. At the same time you receive half of your contributions back as a rebate. And you repay your loan over the next seven years. Because you are paying principle only and no interest this is achievable, we have many many testimonies of this.
- The half back Rebate For a $200,000 mortgage you contribute $40,000 and get $20,000 of this back as a rebate. You have two choices of what to do with this: You could use it as your 1st down payment on your mortgage, so you borrow $200,000 but only have to repay $180,000. Or you could start another membership $20,000 worth for your family, children, missionary, church or anybody you choose. This is one of the main goals of Liberty Trust that “we are a community and we should be helping each other”.
- If we take an example of a loan of $300,000. This is the cost to you for your mortgage and it goes to the trust to be lent and re-lent to help others.
- How much wold you save in bank interest by contributing to Liberty Trust? If we continue to use the example of a mortgage of $300,000 your charitable donation is $40,000. So you can see that there is a huge saving by joining Liberty Trust, and you will be helping others with their mortgage at the same time. The norm for today is for banks to lend over a term of 30 years. A 30 year mortgage of $300,000 at 8% interest will cost you ½ a million dollars if it goes the full term!
- Your contribution and loan application are flexible. For example we have a High School student who is contributing $20 per week because that is all he can afford from his after-school job. But when he starts a full time job he will lift the level of contributions, which will lift the level of mortgage available. The Trust is flexible. We are often asked if there is a way to reduce the 10 year waiting time by contributing faster or in advance. By doing this you are pushing someone back in the queue already waiting for a mortgage. We have worked out a formula to accommodate this. If you pay in half the time then your waiting time is reduced by 1 year. The waiting time can be reduced by 2 years if the entire membership was contributed at the start.
- Our overheads are surprisingly low for our size. Contributions and repayments come in by automatic payment and we only need only 2 part-time workers to keep things ticking over. The rest of us are volunteers. We try to keep our bank account near zero and as soon as there is enough money for the next mortgage out is goes, and so on till the next one. All loans are secured by registered mortgages and we have no debt and so your funds are extremely safe. But the best part is that by joining you are putting money into God’s Kingdom where it will be lent and re-lent and recycled to help many generations of people. And we also give donations to support other charitable ministries such as Bible in Schools.
- Remember the model which showed a waiting time of 12 years? Now that the Trust has been going for a while we have built up a capital of $6 million and our current cash flow is $150,000 per month. This has reduced the the waiting time for loans to 10 years. This $6 million received has been lent and received back and then lent again and we have now given $165 million in mortgages to over 220 homes and churches around NZ.. As you can see the money will stay in the Christian community forever, never to go into the world again. Our desire is to be able to give out mortgages as soon as you join the trust, with no waiting time at all – that the supply of money will outstrip demand.
- Who Should Particpate? Definitely Children – The sooner you join, the sooner you can receive a mortgage. If you start while your children are young you can take twice as long to reach your target and still they will not have to wait for a loan – it will be waiting for them! Students – with your support and encouragement students can contribute part of their after-school earnings. Singles – this is the time when you have the most cash available and you should definitely start a membership straight away. You can take a break while you study or go abroad and then pick up where you left off. Recently a 23 year old heard about LT and wanted to be a part of it, and so he put in the $10,000 he had sitting in the bank before leaving to attend Bible College. He will resume contributing when he graduates. Married couples – With two wages coming in you should be contributing so you can buy your first home interest free. Parents – It is harder for you guys because you are supporting children while renting or repaying an existing bank mortgage but this is when most people join Liberty Trust. We have many testimonies to prove that it can be done. The majority of our pioneers supported a bank mortgages with interest rates of up to 18 – 22% as well as contributing to Liberty Trust. Now that they are debt free many of them are sponsoring their children in LT. Grandparents – Prov 13 v 22 says “A good man leaves n inheritance for his children’s children”. You should sponsor your grandchildren from their inheritance. They will become debt free much sooner with an interest free mortgage than they would with a smaller lump sum. Family Trusts – You don’t have to sponsor your children individually– share the benefit among your family.
- We are very concerned about the next generation. Proverbs 22 v 6 & 7 say “Train a child in the way he should go, and when he is old he will not depart from it. The rich rule over the poor and the borrower is servant to the lender.” How are our children going to save for a deposit to own their own home with rents so high and house prices rising? Are we teaching our children the principles of money? Are we teaching them tithing? How to spend wisely? How to save? We should be putting these things in place now, to address this concern. Liberty Trust can help teach your children financial wisdom, help them save a deposit and purchase a home, and become debt free while they are young so they can serve God whole-heartedly – without being a servant to their mortgage.
- Each of us are guardians or stewards of God’s resources. This is a serious statement for us as Christians. The average kiwi spends 113% of what they earn! Are we very different? Are we wasting our lives in bondage to rent and bank mortgages? God wants us to be generous and lend to each other without interest. By pooling our resources we can release each other to give with liberty to Gods’ Kingdom – and revolutionise the work of the gospel!