Perspectives Archives - Page 8 of 8

I recently read an advertisement promoting a program entitled “Financial Peace University”. The title caught my attention because peace is one of the by-products of what I hope we financial advisors deliver to our clients. We all know the stresses caused by the tension between our true needs versus our desires and what our personal cash flow affords.

What surprised me by the advertisement were the program’s sponsors. Four different churches were offering this seminar per this particular publication’s classified section. Churches offering a financial education program that promises peace! Are churches giving in and raising the red flag of surrender to the stress causers known as consumerism and materialism and giving up on the True Source of Peace?

Or is it that we are so sensitive and cynical that when the message from the pulpit is about proper Biblical money management, our interpretation is, “They just want us to give more money.”? Are clergy hoping that if they sponsor secular programs to help us get a grip on our personal finances, then they’ll be rewarded with increased giving in the offering plate? I am not so cynical as to believe that.

True Help
So, what is going on in peoples lives that churches feel compelled to call parishioners together to learn more about budgeting, debt management, investments, insurance, etc? I believe churches are legitimately trying to find resources beyond themselves to help parishioners better handle the problems brought on by poor financial planning and the stress that brings on our every day lives.

Do you ever get a not-quite-right feeling, an angst about how your financial life is going?

Do you ever say to yourself, “If only I made another $5,000 (or $10,000, or whatever)” my financial problems would go away.”?

Conversely, things may be going well. Work may be fulfilling and financially rewarding. Family and work relationships may be comfortable. The house may be updated, the car new, and this year’s vacation planned (or taken). By all outward appearances, success. Still, something is missing.

Forgive my harshness, but I submit what is missing is an appropriate understanding of success. This misinformed definition of success leads to a misalignment of priorities. To exacerbate and exploit this, Fifth Avenue advertisements and Wall Street greed bombard us with glamorous visions of what we need to be happy. They constantly tell us we need to make more and more money and buy more and more stuff. And, don’t worry about the cost because they’ll finance it at low interest rates. Like lambs being led to slaughter, we blindly follow along and run up insurmountable credit card balances. By the time we finally realize all this striving and acquiring of stuff did not make us happy, we find our finances are out of control.

But all is not lost. It is possible to get off this treadmill and get our finances back on the right track. It may not be easy, however, especially when confronted daily by seductive messages competing for our minds and wallets.

True Success
How to go about gaining a new attitude and a properly formed, educated understanding of financial success? Please allow a quick sports analogy.

Everyone who has played sports calls it ‘fun’ when they win. But think about what it takes to win consistently. The hard work, the hours of training and sweating are not much fun. The tedious repetition of executing proper technique is hardly fun. While friends party, athletes dedicate themselves to the discipline necessary to win. Not much fun. But, winning. That is fun!

Like this new understanding of ‘fun’, a renewed attitude toward money is formed when it is thought of properly as the reward for the use of the talents and abilities we have. Our culture beatifies the self-made, rugged individual who achieves and acquires seemingly by the force of his or her own abilities. But people of faith believe our talents and abilities are gifts of our Creator. Thus, money too is a gift. And as faithful believers, we are to exercise good stewardship of all of His gifts including money.

In the eighth chapter of Deuteronomy (greatly paraphrased) we are admonished, “You say it is your own power and strength that has gained for you this wealth. But it is I who gives you the power to acquire wealth.” Like an alcoholic must acknowledge his own powerlessness and dependence on a higher Power, we should acknowledge our Creator’s gifts of all we are and all we have. In so doing, we gain proper alignment of priorities. How we spend our time and money begin to fall in line with the principles of good stewardship.

So, bravo to the churches who offer classes on finances. Where better to learn the principles of finance that give a legitimate chance for the peace of mind that comes from being in God’s will.

What a tough year this has been for pursuing money. Bank and brokerage firm failures. Sub-prime mortgages and housing market crashes. Government bailouts of Citigroup and GM. Credit crunches and high unemployment. Stock market roller coaster volatility and terribly low interest rates. Iraq, Iran, North Korea, Afghanistan…

How do you react to all the negative news? Where, or in what do you place your faith for the future? Sirach 31:5 says that one who loves gold will not be justified. One who pursues money will be led astray by it. Heed what Jesus taught His disciples in Luke 12: 22-36. Do not worry. Be ready for action. Make “purses that do not wear out.”

How diversified are you?

You know that #diversification is the key tenet for a sound investment strategy. Consider gold as a component of your asset allocation. Could this be the purse that does not wear out?

Gold is considered a long-term storehouse of value. As such, it fulfills all the functions of money. Bullion bars are bulky and must be safe-kept somehow. On the other hand, gold coins are portable and come in varying denominations. Universal recognition and acceptance as a form of payment make gold coins easy to buy and sell worldwide. And recently exchange traded funds like “Spider Gold Shares” allows investment in gold by virtue of a financial instrument that tracks the price of bullion.

Of paramount importance is gold’s ability to retain its purchasing power. It has done that and then some. According to Blanchard and Company, $1000 invested in generic gold coins in 1970 would be worth about $40,000 today. They say gold is up 150% since 2001. Although gold fluctuates in value, this average 10% annual return demonstrates gold’s ability to keep pace with inflation.

Don’t Worry.

We can’t do anything about the stock market’s and interest rate’s reaction to the war and terrorism, world and economic news, fear of a financial freeze and private company governance. We can’t do anything about the UN or the axis of evil. We can’t do anything about the weather.

We can control our responses, however. We can maintain hope and portray a positive countenance about our future. We can stop waiting for a return to the stock values of the 1990s. We can decide to manage investment risk more honestly and proactively. We can decide to diversify amongst and within asset classes. We can act with an attitude of, “Here we are today. Let’s go forward from here.”

And when the gold dust settles, and we have more confidence about the clarity of the immediate future, we can turn in our gold coins to be melted down and made into investment vehicles of another nature. As Tobit 12:9 instructs, community driven investments such as meals and school supplies for under-privileged children. Relationship driven investments such as rings, necklaces and bracelets for our loved ones. Investments that offer returns that are immeasurable in worldly quantitative terms. Hopefully as with Peter in Acts 3:6 we can say, “I have no silver or gold, but what I have I give you.”