By Chuck Bentley
Todd Peterson, a friend of mine and a former NFL kicker, came up with my favorite quote about generosity.
“ We are all generous… Nobody has to teach us anything about being generous. The challenge we face and the choice we must make is are we going to only be generous towards ourselves or are we going to be generous towards God.”
Our late co-founder, Larry Burkett, believed that if all American Christians used our surplus resources (those God provides beyond our foundational needs) to advance God’s Kingdom, that we have been entrusted with enough wealth to spread the Gospel to every nation.
In other words, if we can simply break the habit of self-generosity, the Kingdom of God will spread to the ends of the earth.
If our ministry were to help every man and woman on the face of the earth get on a budget, get out of debt and have money in his or her savings account, our mission will have failed. We want to see something far more significant take place: we desire to see the transformation of hearts. We want to see Christians understand that God owns everything and to become generous with their time, talents, and money. This is where the real financial battle resides, not with the hands, but with the heart.
Since we are all generous, God wants us to direct that generosity towards Him. To be “rich toward God” instead of ourselves, to share all He has provided for us.
Are you growing in God-honoring generosity? Let us know how you put it into practice.
Originally posted 1/23/2015.
By Chuck Bentley
“Good luck!” That sounds so strange to say, especially coming from a Christian. I don’t believe in luck, and I hope you don’t either. Instead of wishing someone good luck, I prefer to say, “May God bless you.”
Proverbs 24:3-4 says this, “By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures.” What a wonderful insight into God’s economy.
The blessings we receive come not through luck or random chance but through wisdom, understanding, and knowledge. God wants us to rely upon these characteristics that He provides, not on what the world calls luck.
Lotteries are promoted as an inexpensive way to get what we need and to get it all at once. Tickets are purchased based on chance. Buying a lottery ticket is an admission that you believe in luck rather than trusting in God to provide your needs.
With that mindset, Proverbs 24: 3-4 would read: ”By the lottery my house has been built, and through a great stroke of luck it has been established. Through random chance I chose the correct numbers and my rooms have been filled with rare and beautiful treasures.”
When we make that choice to participate in a lottery or other forms of gambling, we put our faith in chance, karma, and luck. We cannot believe in both luck and God’s providence. We cannot say we are relying upon God and His principles and buy a lottery ticket. Many argue that they believe God provides through their gambling. I can find no support for that in the Bible. Gambling requires that all the other participants lose in order for one to win. This is not God’s desire.
Another reason I don’t believe in luck is that the Bible teaches us that God is sovereign even in the outcome of casting lots! “The lot is cast into the lap, but its every decision is from the Lord,” Proverbs 16:33.
That is why investing is not gambling. It is risk, yes. But we use our minds, we rely on wisdom, understanding, and knowledge when we invest but only luck when we gamble on a lottery ticket.
How do you respond when someone wishes you “good luck”?
Originally posted 1/22/2015.
By Chuck Bentley
Today, I have some counter-intuitive advice to help you manage your finances better.
Russell Clayton, along with other colleagues, writing for the Harvard Business Review, introduced new research that demonstrates a clear relationship between physical activity that is planned, structured, repetitive, and purposeful—in other words—exercise—and our ability to manage other aspects of our lives. I found it to ring true with my own experiences.
First, and least surprisingly, exercise reduces stress, and lower stress makes the time spent in other realms more productive and enjoyable. A reduction in stress is tantamount to an expansion of time. Reminds me of God’s advice not to worry.
Second, the survey found exercise increases self-efficacy. The term refers to the sense that one is capable of taking things on and getting them done. The research suggests that people who exercise regularly enjoy greater self-efficacy, and it carries over into other areas of their lives.
The study recommends we consider what form of regular exercise would work best for our schedules. Some people make it their habit to exercise prior to starting the workday because it’s so easy to find reasons not to exercise later in the day. Others benefit from a break in the workday, especially when they can take advantage of on-site workout facilities. Still others like the “wind down time” of exercising after work. Whatever time and setting you prefer, the key is to engage in a level of exercise that dissipates stress and adds to your sense of what you are capable of accomplishing.
I rise early and do painful workouts with my teenage boys. We really only do simple calisthenics, but they make me very sore! If you want to know what I do, just ask. It is not nearly as easy for me at 57 as for John at 16 and Luke at 14! I also try to take a long walk with my wife everyday. We usually go in the mornings. This routine keeps my energy levels high, my mind clear, and provides time to think and pray. I can also do every bit of my program when I travel.
This study also reminded me of the connection between tackling our financial challenges and God’s promise to provide us strength. In Philippians 4:13, Paul says, “ I can do all things through him who strengthens me.”
I should mention two more things:
1. I have decided to change my eating habits this year—only water to drink and no desserts. So far, I have not cheated! This has also served to increase my reliance upon the Lord.
2. We have great solutions for those wanting to make progress towards your financial goals. We have biblical classes now online at Crown Connect like Creating a Spending Plan, Eliminating Debt, God’s Economy vs. Man’s Economy, and many others for a small monthly or yearly subscription. Get started today at Crown.org.
If you find that working out and staying fit is helping you in other areas of your life, share your encouragement with us here.
Originally posted 1/20/2015.
By Chuck Bentley
Ever feel like you are living on a treadmill, working around the clock?
Our late co-founder, Larry Burkett, remembers the day he got off the treadmill of working non-stop. Psalm 127:2 spoke to him during a time when he was living on the verge of exhaustion:
“It is vain for you to rise up early, To retire late, To eat the bread of painful labors; For He gives to His beloved even in his sleep.” (NASB)
Larry realized he was overworked and under trusting. This Scripture opened his eyes to the sin of work, work, and more work. It is essentially an expression of self-reliance.
Our culture has changed dramatically since Larry died in 2003. A friend told me recently that he thinks we suffer from CPA, “continuous partial attention.” Mobile phone, internet, Facebook, email, Skype, We Chat, 24/7 news. We are bombarded with information. The demands to keep in touch and keep up are growing even when we are off work. It is no wonder that Americans feel like they never get a break.
Larry Burkett made a commitment to change his priorities.
1. First, he committed to stop trying to solve all the problems of the world and to work only on what he believed was important to the Lord.
2. Second, he determined to trust God to provide even when he cut back on the number of hours he was working.
3. Finally, he committed to rest.
Tremendous advice for us all.
Have you seen God provide even while you sleep? We would love to hear your story.
Originally posted 1/12/2015.
By Chuck Bentley CHARISMANEWS (11-12-2014)
“Former NBA star Charles Barkley recently drew national attention with his candid comments referring to the envy between ‘successful blacks’ and others in the community, referring to ‘crabs in a barrel’, ” noted Crown CEO Chuck Bentley. “Mr. Barkley was referring to an African Proverb—Put one crab in a pot and it will escape. Put two crabs in a pot and neither will escape.”
In a piece at American Thinker, Bentley observed: “The point of this proverb is that envy destroys everyone. Whatever your reaction to Barkley’s perception of an issue in his community, envy and covetousness are actually national problems. Americans have difficulty remembering, much less keeping, the 10th Commandment: Thou shalt not covet.”
This last and often-overlooked of the Ten Commandments impacts not only consumer behavior, but it is also reshaping federal policy and poisoning American culture, along with its economic future.
Fundamental to the Judeo-Christian principles that founded this nation was an understanding that people were uniquely created for a purpose and commanded to make something of themselves and the world they were given. All were encouraged to be fruitful and multiply, subduing the uncivilized earth, leaving it better and more developed than they found it. All were instructed to be content with what their own hands produced, not looking over the fence to see what they could get from their neighbor.
“But today’s cultural leaders argue not for a level playing field of opportunity, but equal outcomes without regard to effort or ability,” noted Bentley. “Political and economic leaders talk about people’s resources as jealously as feuding relatives at the reading of a will.”
Certainly, whole industries exist to stir up envy and desire among consumers. U.S. advertisers spent more that $171 billion on paid media in 2013, according to eMarketer. That kind of bombardment can encourage massive consumer debt and strangled family finances as people go too far, too fast.
“America needs to reflect on the 10th Commandment to escape from the energy and talent drain of crabs fighting to hold each other back,” said Bentley.
By Chuck Bentley
When Forbes magazine published its listing of America’s top colleges, looking at “best value” as a criteria, I knew that “value” for many prospective students really means “debt.” For today’s graduates, shiny promises quickly lose their luster when the student loan payment book arrives before a job offer.
The time is now to rethink how we finance college before young people sign those college loan applications, starting their lives burdened by excessive obligations.
Before you assume that college is “always worth it,” take a look at the facts. The Wall Street Journal reported, “Roughly a quarter of college graduates with jobs are earning barely more than those with only a high-school diploma.”
Too bad college costs don’t reflect that. The higher education industry has enjoyed sacred cow status, raising its prices exponentially. While U.S. jobs are paying an average of 23 percent less since 2008, the overall cost of a degree from a four-year public school is up 27 percent beyond overall inflation during the same time period. This trend should cause any prospective student or family of the student to make a wise decision about how to pay for this higher education.
I know first hand that education and crushing debt don’t have to be sold as a package. In fact, my oldest two sons have attended college debt free, using ideas that I teach as head of Crown, which helps people get out of debt and develop financial management skills.
But I worry for my sons’ friends and colleagues, as 7 in 10 college seniors graduated with debt, an average of $29,400 per debtor, according to a recent report from the Project on Student Debt at The Institute for College Access & Success (TICAS).
This kind of oppressive price tag has resulted in a staggering shift, according to the Federal Reserve Bank of New York which now indicates that student debt at more than $1.1 trillion is greater than credit card and car loan obligations, surpassed only by mortgages. Yes, we now have a student loan bubble.
Let’s start with the big question first: college or educational alternatives?
A wake-up call to gluttonous college and university leadership may come as students use their time and resources to pursue a trade, rather than a degree. Mike Rowe, of “Dirty Jobs” fame on the Discovery channel, challenges people to consider skilled labor for their life’s work. “We’re lending money we don’t have, to kids who will never be able to pay it back, for jobs that no longer exist,” he says.
Here’s my advice:
Consider vocational education to learn a trade or skill that can lead to a job or possible career. There are schools and training programs for a wide range of occupations, from soldiers, appliance repairmen, welders, plumbers, and mechanics to air traffic controllers, beauticians, message therapists, court reporters, and chefs.
Seek an internship or apprenticeship to get a foot in the industry before you go to school. Even volunteering for a company or organization in the field where you aspire to work is a good use of time. Investing three months in a real-life environment will provide priceless experience, relationships, and insight long before you decide to commit your life to that profession.
Start a business right out of high school. For many, the real cost of college is the opportunity cost of lost experience for future entrepreneurs. College dropouts who had a burning desire to get started with their business plan versus attending classes have launched many of the largest companies in the world.
Pursue online education. You may find an Ivy-league quality experience for pennies on the dollar and get a better value plus a flexible learning environment.
Work your way around the world. Another good alternative to a college education is to travel and work at odd jobs. Not only is travel a great education, but working in a variety of jobs, cultures, and companies will give a young person clarity on what they do or do not want to spend the rest of their lives doing.
Finally, just get a job as you sort it out. Postponing college in favor of work experience while making a plan and carefully choosing a field of study would be time well spent.
But for those ready to seek their college degree, here are our recommended “12 Steps” to earn it without debt:
1. Know yourself. In addition to taking prep-courses for the ACT and SAT, do some self-evaluation to choose the appropriate course of study. Crown’s Career Direct is a personal assessment that can help a student turn their passion into a career.
2. Treat high school as the place to work to earn the grades that will qualify you for scholarships and grants. It is the highest paying “job” for anyone age 14-18. For some, it could mean more than $100,000 of financial rewards.
3. Take as many AP classes as possible while still in high school. The college credits earned there save money later.
4. Take dual or joint enrollment classes while still in high school. These are taught either in your high school or on a college campus. They are graded and count toward your GPA.
5. Put a teenager’s web browsing skills to good use looking for scholarships off the beaten path. Many big box stores like Walmart and Target offer a large number of small general scholarships for local students, from $500 to $1,000. Every little bit helps.
6. Attend a community college for the first two years while living at home. It dramatically lowers the cost of a college education while still allowing the student to earn a diploma from the desired school.
7. Choose an affordable institution for an undergraduate degree, and save money for a master’s degree at the school of your choice.
8. “CLEP” out of some classes. The College Level Examination Program, or CLEP, allows you to test out of certain classes. Study guides are available to help you learn enough material to pass the test.
9. Participate in the U-Promise program.
10. Work part time while in school, during breaks, and over the summer – and save. Studies prove that students who work perform better in their classes.
11. Consider the military. By joining a military reserve unit, significant funds can be earned. As active duty military, students can earn GI Bill money for education.
12. Leverage your athletic ability. Sports scholarships have long been a path to college for talented athletes. Turn that God-given talent into a degree than can last a lifetime.
In the end, choosing debt should be done with a calculator and a good understanding of the long-term implications. In general, for parent or students, only 5 percent of after-tax, spendable income should go to debt repayment. When student debt (or any consumer debt) devours more than 8 percent of available income, financial stress will dramatically increase and may turn the dream degree into a nightmare.
Don’t be emotionally blackmailed into taking on crushing debt in hopes of a job. Your options are limitless, but your debt shouldn’t be.
Originally posted 9/6/2014.
By Chuck Bentley
It is hard to believe that it took a humanist composer to point out the weaknesses and flaws in the modern methods typically used to counteract poverty. Peter Buffet created an uproar when he famously coined a term in a New York Times article — “the charitable industrial complex” — and declared, “we need a new approach” to our losing battle against global poverty.
While I disagree with Buffet’s conclusions, it is time to rethink how we seek to help the least of these, now numbering about 2 billion of our neighbors.
Having spent more than twelve years invested in the eradication of poverty, I’ve witnessed many of the solutions that churches, ministries, non-government organizations (NGOs), governments, businesses, and generous individuals have deployed.
From a pair of hip shoes, to water wells, to micro loans, to large-scale business investments, to food programs, to education schemes, to savings programs, to manufacturing plants, to government welfare; you name it, I’ve seen it. Worldwide, a massive, fragmented effort is underway to help the poor.
Collectively, these multi-billion dollar charitable efforts typically fall into one of two categories—short-term relief or long-term development.
But I believe we may be missing the most obvious solution—God’s plan to escape poverty and thrive in mind, body, and soul, found in His plan for the Jewish exiles in Babylon.
“Build a house and settle down. Plant a garden and eat from your own garden” (Jeremiah 29:5).
The building block of every society is individuals who take responsibility to establish a dwelling. Without this, we see only wandering tribesmen, marauding looters, refugee camps, or migrant workers moving from job to job. Lives are built upon stable foundations, and housing is foundational. Also crucial is close proximity to a personal food supply. Notice God did not first call for a chartable feeding program.
Eating from the fruits of your labor ranks high in priority. This clear directive has many social and cultural benefits, and in modern terms equates to establishing a consistent source of income.
“Marry and have sons and daughters. Seek husbands and wives for your sons and daughters. Increase, do not decrease!” (Jeremiah 29:6).
This may likely be the most controversial step in God’s plan for poverty eradication in contemporary thought, and one that we have been blinded to, but families have been and will remain the essential part of God’s design to bring prosperity to our lives.
The dominant false philosophy of the day proposes that there are too many people on planet Earth and too few resources to go around. In fact, people are good for an economy.
This calloused disregard for our most precious assets, children, is evidenced by the growing practice of abortion, delayed or forgone marriages, and a preference toward fewer and fewer children in the developed world.
Birth rates are falling in China, Japan, the United States, Germany, Italy, and nearly all other European countries. Yet, these are the richest nations in the world.
Economists are worried not just because growth is stalling in working-age populations, but their numbers as a share of the total population in many countries is also falling. Economists like to see this share of total population rise, because it means more people are earning money, expanding the tax base, and paying for schools for the young and pensions and health care for the old.
“Seek the peace and prosperity of the city to which I have carried you into exile. Pray to the LORD for it, because if it prospers, you too will prosper.” (Jeremiah 29:7).
The Lord gives an astounding principle here: Christians must embrace God’s plan to bless the world because our personal prosperity is dependent upon the peace and prosperity of our community (our local economy). In other words, we are God’s instruments to spread His goodness to the world around us by living and serving others in our community.
Economies are a collective of the contributions by the members of that home, community, state, or nation. We are independent in one sense because of private home ownership and responsibility for our personal food supply, but we are totally inter-dependent when it comes to a flourishing economy.
We are to build enterprises that will assist others in the achievement of their goals and objectives. This is the best marketplace strategy of all time.
Greed, coveting, survival of the fittest tactics, corruption, and low efficiencies will plague any company, economy, or nation that is devoid of entrepreneurs and workers who value peace and prosperity for all. This model cannot be legislated, as it does not occur via law. It comes via a transformation of the human heart.
“Do not let the prophets and diviners among you deceive you … They are prophesying lies to you in my name,” declares the Lord. (Jeremiah 29:8-9).
A great failure of poverty eradication programs and economic development initiatives is refusing to acknowledge that the spiritual condition of people impacts everything. What one believes about God impacts his or her view of marriage, children, finances, art, business, government, education, and religion.
Our mission should not be to build an enterprise with marketplace value just to lead people out of economic poverty but to use all that God has given us to nurture a transformation of the hearts and minds of those who are alienated from God and His truth.
Christians are to serve the needs of others through peaceful means—not through domination, manipulation, coercion, or force. We are also to seek to help others prosper as our primary economic goal. But our ultimate aim is to be focused on making disciples, whether they are employees, refugees, or our next-door neighbors.
This is counter-intuitive and turns modern capitalistic greed and aggression upside down. Our heart attitude must be to seek a win/win for those we are serving, putting others before ourselves, just as Jesus did.
Originally posted 8/2/2014 on Real Clear Religion.
By Robert Dickie III.
Regulation worsens “Black Swan” events.
As more Americans struggle to build a full-time life in a part-time world, the cosmic shift in job creation from steady employment to a patchwork of professions leaves many wondering when this will end. This question assumes some kind of jobs bubble burst, forcing market corrections that someday will lead to a more stable employment platform.
The current employment shift is a “Black Swan” event, marking a new direction for job creation we are only beginning to address. Black Swan events mark unpredictable, game-changing shifts that forever alter the course of what comes next. They are like the proverbial meteor striking the Earth, changing life as we know it.
One such strike was the economic collapses in 2007-2009, followed by the aftershocks that rapidly spread around the world, felling global titans and crippling nations. For aspiring workers, the repercussions remain severe, as today three part-time jobs are created for every one full-time job. Too little attention is being paid to how the historically low labor participation rate is impacting evolving economic systems.
Instead, in the United States, Americans have spent the last two years arguing over the Affordable Health Care Act and its impact on the economy, as if this were the premier event choking growth. This has prevented us from addressing equally important issues that in the long run will have an even greater impact on our economy.
Three issues in particular are evidence of a Black Swan event reworking our economic structure: The increasing rate of globalization, the advancing technology displacing workforces, and the suffocating laws and regulations governing free-market capitalism. All three have had a much greater impact on an unprepared global population, far beyond the scale of the Affordable Care Act.
Today, globalization swallows up industries across national lines, as businesses seek economies of scale to keep costs low and stockholder returns high. Even China is losing jobs to other countries offering cheaper labor. Outsourcing in search of cheap labor continues to displace more workers than any other event in the economy.
The second strike for such company-driven communities is how technological advances are also making large workforces irrelevant. If your job can be automated, it will be automated. It is just a matter of time.
But in one area of profound economic impact can government and elected officials truly have an impact—ending the stranglehold of regulation and legal barriers to market entry. There is a place for certain regulatory guard rails. But red tape and government regulations top the list of problems for business, according to the National Federation of Independent Business’ “Small Business Economic Trends” report.
Obamacare is a case in point. It is not the cause of this anemic growth, but it is an additional regulatory anchor, making progress extremely difficult.
In light of market forces wiping out so many jobs, government must be more cautious about enacting legislation and regulation, which impede job creation. The health of the employment market should be as important to politicians as health care.
Some might incorrectly assume by the above article that I espouse an environment of NO government regulation and intervention so as to allow the “invisible hand of the market” to regulate global commerce totally. Although I clearly lean more towards Adam Smith’s teaching in his seminal work, Wealth of Nations, I would not take the draconian stance of absolutely no government involvement. I believe government plays an important role as long as it is measured and balanced. Any system without laws and governance is ripe for abuse. Safeguards are clearly needed to protect the system and everyone within it. The opposite end of the spectrum is total government control of the economy, and over the past century we have seen multiple examples of socialist states that have tried this experiment and failed.
Regardless of political leaning, party, and agenda, most economists consider free market capitalism the best method of wealth creation and prosperity for a society. It is a system that over the past century won out in multiple countries all around the globe. Those countries that leverage a free market system grow faster and have more stability than those governed by a socialist system or dictator. The results are clearly obvious and pointless to argue. The debate, however, is centered around how much governance and oversight a government should have on the system and at what point does government become a hindrance and start to stifle and kill the system it is trying to protect.
Just as nature needs a state of equilibrium, our global free market system needs the same. We must have a delicate balance between a free market allowed to grow without encumbrances and the proper amount of regulation to protect everyone within the system and to make sure we don’t drive the car into the ditch.
Even with the disaster of 2007 and all the financial trouble we as a country have had, America is still considered the safest place in the world to do business because of our laws and the system we have in place. To protect this edge and our global dominance in the business world, we need to ensure that helpful regulations that act as “guard rails” are in place. We also must ensure that we protect against harmful regulation that chokes commerce, protects state-favored industries, and hurts job creation and growth. It is a delicate balance.
For example, many consider the 1999 bi-partisan repeal of the Glass-Steagall Act of 1932 to be a catalyst that helped set the stage for the worst financial crisis since the depression. This legislation had been an important “guard rail” in our economy for over 66 years. It allowed banks to take money from clients and issue loans while it allowed investment firms to sell securities, but neither could do both. There was clear separation between being a bank and being in the securities business. Once this law was repealed in 1999, it allowed banks to enter the securities market and they started operating like giant casinos taking on enormous risk with the hard-earned deposits that everyone felt was securely deposited in their local bank. Would you give your life savings to a drunk to play poker with in Vegas? That is exactly what the bankers were doing with our money after 1999. When the music stopped, most of the banks had to be bailed out by the government (me and you). In hindsight, the “guard rail” of Glass-Steagall was pretty important.
Furthermore, regulators during this time that were to be protecting the system weren’t. They were asleep at the switch and in the case of the rating agencies like Moody’s and Standard & Poor’s, some consider them to have been complicit in what could be considered at worst fraud and at best a horrible job investigating and rating securities. They gave AAA ratings to worthless bonds, so common investors thought they were investing in a safe securities when in reality they were taking on enormous risk.
The debate continues to rage on: Should we have more or less regulation following the 2007 Black Swan event? I would argue we don’t need more, we just need to enforce the regulations we already have on the books. We also need to be careful not to swing the pendulum too far to the side of over regulation or de-regulation, as either creates a system ripe for disaster.
We need a delicate balance between both. Finally, all new regulations need to be reviewed regarding the current and future impact on the system as a whole; otherwise the Black Swan event we had in 2007 will not be a rare event but will become common place in our new economy.
Regardless of the regulatory environment, the ripple effect from this one event will impact each of us for the rest of our lives. The economy is forever changed, and how you prepare to navigate it is extremely important.
Originally posted 5/25/2014.
By Chuck Bentley
The millions spent on Valentine’s Day may fuel the passions of new love, but if you want “happily ever after” you may want to consider a budget.
I once counseled newlyweds, who just six months after their wedding were struggling to keep their marriage together. The reason was no mystery. They had accumulated $180,000 of combined consumer and student loan debt on just $60,000 of income. The engagement, wedding, honeymoon, and home furnishings were all purchased on credit cards and with loans from family. Their financial picture was shocking, even to me. Unfortunately, their marriage did not last through their first year, and bankruptcy was in the future for both.
While many couples pledge to stay together “for richer, for poorer,” making a plan for handling both can help you keep that promise.
Researchers have found that money fights are the best predictor of divorce—more poisonous than conflicts over kids, sex, the in-laws, or any other points of contention.
“Results revealed it didn’t matter how much you made or how much you were worth,” said Kansas State University researcher Sonya Britt. “Arguments about money are the top predictor for divorce because it happens at all levels.”
And yet, couples seem to want to wait to fight about money until after the wedding. Sixty-eight percent of engaged couples polled by the National Foundation for Credit Counseling reported negative attitudes about discussing money with their fiancé, while five percent said that the discussion would lead them to call off the wedding.
In reality, you can talk about money before the wedding, or fight about it after. But the subject will come up.
Matchmakers through the centuries, all the way to the computerized services of today, begin with the idea that you need to consider people’s unique personalities to create a connection. Apparently, you need to know much the same thing to follow a budget. Over 15 years, Crown developed Personality I.D.®, which details how an individual’s personality can translate into their financial decisions. In counseling thousands of couples over Crown’s more than 40 years, we learned that before a man and woman say, “We do,” they should ask, “Who are you?”
Some people may find comfort in realizing that their reluctance to tackle money issues may come from their unique make up. About 1 in 5 Americans surveyed by the Princeton Survey Research Associates said that they do not keep track of their finances at all. And the rest often stray from the straight and narrow as other goals take precedence. But it may not be their fault.
For couples desiring the “two to become one,” understanding your partner’s unique make up can build respect for the way each person makes decisions. Balancing strengths and weaknesses will make the team stronger—but not if the budget becomes a battleground.
Couples need to make a plan to prevent both a marriage and a financial disaster.
1. Begin by understanding each other’s goals and needs. It is likely that one will desire security and high attention to detail while the other desires freedom and prefers not to have to think about the finances at all. This is not unusual and can become a strength of the marriage when responsibilities are divided appropriately. Give each other the freedom to operate in their area of giftedness. Stubborn pride must be set aside with so much at stake.
2. Next, share any money secrets. Couples should review their credit reports and reveal any problems they have had managing their finances. Transparency will lead to greater trust.
3. Then, set a time to talk each month. Tackling tough financial conversations should take place regularly, preferably at a set time, so issues won’t be ignored until a crisis. Making it part of your routine also helps to create a forum for decision making that doesn’t put one party on the spot.
Money should not become the wedge that pries a couple apart. Money is a tool, used to build up a family, and used wisely it becomes an investment in happily every after.
Originally posted 2/24/2014.
By Wade Myers
Q: When and how should I give equity or other incentives to my senior managers in order to retain them? I’m considering giving them equity, but not sure how to do that.
A: While I absolutely understand the need to retain key management staff, I would be careful about giving up ownership to them and the manner in which you do so. In order to create an incentive for managers to stay with an organization and to give them some “upside,” there are basically the following options:
* Form a corporation and issue stock options – This is the typical way of giving equity to your key employees in the most tax efficient manner. This is also an expensive prospect as you would need to incorporate and create an options plan that is properly structured, meaning a fair amount of legal fees. You will also have an issue of how to structure an exit that facilitates liquidity for the optionees.
In a typical stock options situation, the company is either a public company that already offers liquidity for the optionee or is a venture-backed company that is planning either an Initial Public Offering or a strategic sale of the company in order to create liquidity.
* Value sharing agreements – These are usually more complicated than a deferred compensation plan and less complicated than a stock options plan, but this can still be difficult to structure in that there must be strict agreement on how to value a company and the participants’ share of the value accretion. Value-sharing agreements can be used in a situation where the company is not publicly traded.
* Deferred compensation – This is often referred to as a long-term incentive plan (commonly referred as an LTIP). The concept of deferred compensation plans is to reward employees for staying with the company because the bonus associated with the plan is paid out over a certain number of future years, thus providing “golden handcuffs.” Deferred compensation plans can easily be used in a company that is not publicly traded.
Originally posted 1/7/2014.
