Good business planning must involve setting priorities and working on the most important ones first. In the area of money, that is called budgeting.
Business budgeting is the process of allocating available resources among a variety of possible expenditures. If a company sells a product or service, it needs a system of budgeting and billing customers.
How we use our money, on many occasions, is the clearest outside indicator of what we really believe.
“No servant can serve two masters; for either he will hate the one and love the other, or else he will be devoted to one and despise the other. You cannot serve God and wealth” (Luke 16:13). The priorities we establish for the use of our money (both personal and business) can give us good insight into where we are spiritually.
Just as a thermometer doesn’t make a room hot or cold but, rather, measures the temperature in the room, so money and how we handle it doesn’t make us spiritual or worldly; it merely reflects the inner spiritual condition.
1. Pay suppliers. Without a doubt, those who provide materials on credit have the first right to any available income from a business. This commitment runs contrary to present day business logic and business practices, which say, “When money is tight, string out the accounts payable.” Yet God’s Word has a different attitude: “Lying lips are an abomination to the Lord, but those who deal faithfully are His delight”(Proverbs 12:22). When a business owner orders materials, there is an implied promise to pay. A Christian’s promise is his or her vow and it must be honored. “Do not withhold good from those to whom it is due, when it is in your power to do it” (Proverbs 3:27).
2. Pay employees. Once creditors are paid, the next priority is to pay employees what is due them. This also runs contrary to present day business practices, which says that owners should be paid before employees. “Do nothing from selfishness or empty conceit, but with humility of mind regard one another as more important than yourselves” (Philippians 2:3).
3. Pay owner or self. Once creditors have been paid and employees have received their compensation, owners can draw their compensation. It is not unusual for people who start businesses to feel that they sacrificed to build the companies, so they have the right to any and all proceeds. However, this is not what God’s Word teaches. In essence, owners are faced with a critical decision: whether to obey God’s Word or adapt to the common business practice of today.
That choice is what separates Christian businesspeople from all others. Christianity is more than verbal proclamation and church attendance; it is a lifestyle that says, regardless of the costs I will follow His principles.
There is no biblical principle that sets normal business hours at 40, 60, or 80 hours a week. The preponderance of evidence in Scripture seems to indicate a sunup to sundown workday, six days per week.
Yet in today’s American society most employees feel that anything beyond 40 hours should be overtime paid at time and a half, and many owners think that anything less than 80 hours per week is laziness.
Both sides are extremes. Owners who allow work slothfulness from their employees are just as wrong as those who demand extraordinarily long work weeks, with or without adequate compensation for the extra work. Very seldom does more money compensate for employee occupational burnout.
After owners have established financial and time priorities in their businesses, they need to make sure that ethical priorities are established.
There are three areas that need to be directly addressed regarding ethical priorities.
1. Taxes. Perhaps nothing represents a Christian businessperson’s spiritual values more clearly than that person’s attitude toward paying taxes. No one likes to pay taxes, but to cheat on income taxes or any other tax is stealing—a sin that separates us from God.
2. Fraud. In today’s society it is shocking to realize how many Christians and Christian businesspeople accept fraud and dishonesty as normal. The most common business fraud (not including tax fraud) is against insurance companies and medical health providers. These are followed by fraud associated with over-billing or double billing, overcharging, warranty fraud, reverse shipping charges, and selling outdated or inferior products.
3. Misuse of company time and property. Most owners cannot be held accountable for the misuse of company time. This is related more to employees who do not give their employers a complete day’s work or perform personal tasks on company time. According to God’s principles, this is stealing from the employer. Nevertheless, many times owners are guilty of using company materials for personal use.
Each year American businesses lose $160 billion to employee theft. A portion of this is owner theft. Although owners tend to believe they can treat company assets as their own personal property, until current law agrees with that perspective, asset misuse by owners is still unacceptable.
Some of the most common areas of misuse are personal use of a company vehicle; long distance calls on company telephone; company stamps for personal use; and the use of company computers, copy machines, fax machines, pens, pencils, and paper for personal use.
“He who walks in integrity walks securely, but he who perverts his ways will be found out” (Proverbs 10:9). Although some Christian business owners have financial priorities, many are not in line with God’s Word.
All professing Christian business owners need to establish not only financial priorities but also time use and ethical standards as well. Realizing that God is always watching and is always attentive to our every action and decision should be a constant reminder that Christian owners must be led by God’s directive and the principles of His Word.
Originally posted 4/8/2013.
The information in this article is taken from the Energy Efficiency and Renewable Energy Network of the U.S. Department of Energy.
In the United States, Daylight Saving Time begins for those participating at 2:00 A.M. on the second Sunday of March. At 2:00 A.M. on the first Sunday of November, most of the U.S. reverts to Standard Time.
One of the biggest reasons we change our clocks to Daylight Saving Time is because it saves energy. Energy use and demand for electricity for lighting our homes is directly connected to when we go to bed and when we get up. When we go to bed, we generally turn off the lights, VCR, radio, stereo, and TV.
In the average home, 25 percent of all the electricity is used for lighting and small appliances. A good percentage of energy consumed by lighting and appliances occurs in the evening when families are home. By moving the clock ahead one hour, we can cut the amount of electricity we consume each day. The U.S. Department of Transportation says that our country’s electricity usage is trimmed by about one percent (10,000 barrels of oil) each day with Daylight Saving Time.
In the winter, the afternoon Daylight Saving Time advantage is offset by the morning’s need for more lighting. So, in the pre-winter (late fall), winter, and post-winter (early spring) months, we can return to Standard Time, giving additional morning light when most needed.
As we approach the time of the year when the energy advantage provided by Daylight Saving Time begins to lose its effectiveness, we need to look at other energy-saving steps.
There are a number of conservation measures that energy-cautious homeowners can take to reduce energy costs. The following are the 30 tips recommended by the U.S. Department of Energy.
1. Check all outside doors for air leaks. Use sealer tape to seal leaks, and caulk around windows. Check for holes and cracks around light fixtures, outlets, and walls. Fill with caulk, sealer tape, or spackling compound.
2. Change heat and air conditioning system filters regularly.
3. Maintain heat and air conditioning systems regularly.
4. Check levels of insulation in walls, ceilings, attics, crawlspace, heat and air conditioning ducts, and basement. Attic insulation should be at least six inches deep.
5. Add storm windows, storm doors, and double-pane windows.
6. Keep thermostats set at 68 degrees or lower in winter and 74 degrees or higher in summer. This could save 40 percent in summer and 15 percent in winter.
7. Reduce heating and cooling systems when your home is vacant for more than eight hours.
8. Use a timer-operated thermostat.
9. Have your local power company perform a free energy survey. Ask them about low-cost community programs to insulate your house.
10. Stop the dishwasher after the wash cycle, or use the economy cycle. The warmth from the wash cycle should dry most of the dishes.
11. Change vacuum cleaner bags regularly. It saves electricity and improves efficiency.
12. Use your main oven for large food items only. Bake as many dishes at once as possible. Use crockpots, toaster ovens, and pressure cookers instead of the oven.
13. Use self-cleaning oven feature only when energy usage is at a minimum, such as in the fall or spring when neither all day air conditioning nor heating is needed.
14. Clean dust from refrigerator and freezer coils.
15. Buy energy saving appliances.
16. Reduce heat and use blankets at night. Do not use electric blankets.
17. Close fireplace damper when not in use.
18. Reduce heat and wear a sweater in the house.
19. Keep lint filter clean in your dryer.
20. Dry clothes outside during summer. Wash and dry no more than twice weekly during winter months.
21. If you are not using it, turn it off.
22. Use automatic timers to control lights when not at home. Use timers to control outside Christmas lights. Do not leave lights on all night.
23. Set hot water heater to 120 degrees. This is hot enough to wash clothes and dishes but not hot enough to cause burns.
24. Wrap hot water heater with insulation. Periodically drain heater from the bottom to remove sediment and allow for more efficient operation.
25. Buy a water-restricted shower head.
26. Use dishwashers, washers, and dryers only when full.
27. Use cold water for laundry when possible. Very few times is hot water absolutely necessary.
28. Fix leaky hot water faucets. One hot water faucet leak can waste 1,300 gallons of hot water per year.
29. Take a quick shower instead of a bath. This can save up to 50 percent of the total hot water in the home.
30. Turn off the hot water heater if you will be gone from your home for more than three days.
A typical U.S. family spends over $3,000 per year on home utility bills. Unfortunately, a large portion of this energy is wasted. In fact, the amount of energy wasted just through poorly insulated windows and doors is about as much energy as we get from the Alaskan pipeline each year. Energy efficient improvements not only make homes more comfortable, they also yield long-term financial rewards in the form of less operating and energy consumption costs.
Originally posted 4/5/13.
Medicare is a government-sponsored health insurance program for most people who are 65 or older, although some disabled people under the age of 65 also may qualify. Individuals 65 or older who don’t qualify for Medicare can still receive it by paying a monthly premium, which is generally adjusted yearly according to age and medical need.
Medicare is a two-part program. Part A provides hospital benefits for short-term illness. It also provides some benefits for nursing facilities or home care. Part B Medicare, which pays most medical and surgical fees, is optional medical insurance, which is available for a small fee each month. The premium can be automatically deducted from the recipients’ monthly Social Security benefit check.
As the baby boom generation ages, money spent on health care most likely will increase dramatically. The primary reason why health insurance underwriters charge so much to insure people over 65 is because they use more health care services.
Since 1995, Medicare beneficiaries have paid an annual average of $3,063 per person extra for supplemental insurance premiums, medical services, medical products, and medicines that were not covered by the program—almost one-third of their health care expenses.
As costly as Social Security is, the potential cost of Medicare over the next two decades far outweighs all other social or entitlement programs. The only logical way to make a system solvent that is providing health care for the costliest group—age 65 and older—is to manage it with the least costly group—ages 20 through 35—and raise the prices for everyone.
So, unless there is a major breakthrough in health care that inhibits the aging process, the younger generation of families will be forced to pay for the care of the older generation. However, because of the steadily declining birth rate due to readily available abortion (which claims the lives of over one million yearly), smaller families, and couples who choose to start families later, there are fewer workers to pay for elderly health care.
In 1960 there were 4.5 American workers per person aged 65 or older. At the current rate of population expansion, by the year 2040 there will be 2.2 American workers per person aged 65 or older. Therefore, half the number of workers will be responsible for paying the medical bills of more than twice the number of elderly.
Politically, the generally accepted method by which these increased expenses will be paid is by steadily raising workers’ taxes, while at the same time cutting the medical coverage offered by Medicare.
Is this the best way to cover the cost of medical care for the elderly?
When the first of the 77 million baby boomers began entering the federal Medicare system in 2011, annual Medicare expenditures were expected to climb from $201 billion to between $2.2 and $3 trillion before the decade is complete. That means that workers’ taxes will have to quadruple just to keep pace.
Unless workers’ taxes are raised immediately and regularly over the next two to three decades, the cost of medical care most likely will never be met by the revenues generated from Medicare taxes. Soma is a very popular drug. Now, it is always in my first aid kit, as it helps me with my muscle cramps. According to the website https://cocopath.net/carisoprodol-generic-soma/, this drug causes sleepiness. However, I didn’t notice this side effects. I found this medication really efficient. I’m definitely against abuse and self-medication, but if you can’t see a doctor right now, Soma can turn out really helpful.
Although raising taxes to some extent is a foregone conclusion, it has always been unpopular with the American worker, and it is generally viewed as political suicide for proponents to any tax hike.
Therefore, although a tax increase is exactly what will be needed if quality medical coverage is to be provided for the elderly, it is highly unlikely that the average American worker will have to withstand a quadrupling of his or her Medicare tax burden over the next couple of decades.
So, how can medical costs of the elderly be covered? Is there an alternative to raising taxes beyond acceptable and reasonable levels?
Medicare supplemental insurance could be a logical and affordable answer to the question of rising medical costs for the elderly. This type of insurance is designed to take up where Medicare leaves off, and it is relatively inexpensive for the amount of coverage it provides.
A good supplemental policy should cover a whole range of health problems, including pre-existing conditions. It also should provide for long-term custodial care—nursing home or home care—and should give the option of using facilities other than those approved by Medicare.
If supplemental insurance is not affordable, there are other options.
A major medical plan can generally be purchased very inexpensively. This is medical insurance that usually has a high deductible but will pay for catastrophic illnesses or major surgery.
Often retirement organizations, like AARP, offer supplemental hospital insurance that pays the insured a certain amount for each day spent in a hospital and an additional amount in case of surgery. Not all organizations and associations offer hospital supplementary insurance, so if interested contact the member association.
Another option is to begin immediately to set aside into a medical savings account a monthly amount (a minimum of 5 percent of net monthly income) that will be used to help defray major medical expenses.
As the average age in America continues to climb, the need for medical coverage for the elderly will continue to increase. However, increasing workers’ tax burden may not be the best solution to handle the inevitable rise in medical costs to care for the elderly. Private insurance and savings could go far in helping to supplement Medicare coverage.
Originally posted 3/8/2013.
By Austin Pryor for Sound Mind Investing
One of the more contra-intuitive propositions that I regularly put forth in my newsletter is the idea that one’s investing decisions can usually be made with little regard for what’s currently going on in the investment markets. Let me make my case, and then we’ll apply it to the question of deciding whether now is a good time to sell some or all of your stock holdings.
Typically, where do ideas for your investment decisions originate? For many investors, the starting point of the process is found in the impersonal “outside” world of current events, magazine articles, and brokers’ recommendations. Their decisions are primarily guided by outside considerations. As they respond to all the data thrown at them—sometimes buying, sometimes selling—their personal “inside” financial worlds take shape. Their thinking is “outside-in.” They need a continual stream of news and information to provide stimulation and provoke them to action. Decision-making would be impossible without it.
For other investors, the starting point of their decision-making is “inside” information. The focus is on their own financial needs and a personalized long-term strategy designed to meet those needs. Their buy/sell decisions are made based on what’s required to make sure their financial holdings are in accord with the game plan. The “outside” world of investment professionals comes into the picture only because assistance is needed in executing decisions already made. This is “inside-out” thinking, where decisions are primarily shaped by inside considerations. Thus, current market fads, trends and so-called expert opinions are largely irrelevant to inside-out investors. As you have probably guessed by now, I’m encouraging you to be an inside-out thinker.
In other words, make your investing decisions like you do other consumer purchasing decisions. For example, if your family has grown to the point you need a spacious minivan to haul everyone around, you wouldn’t buy a new Volkswagen Beetle instead merely because an article in Money magazine said they’re exceptionally “hot” at the moment. Or, if you need a medicine that lowers your blood pressure, you wouldn’t let a glowing recommendation from your druggist convince you to bring home the leading antihistamine for allergies instead. It would be foolish to let irrelevant external influences (outside-in thinking) steer you into making such inappropriate purchases. Instead, you make your decisions based on your needs at the time, irrespective of what the marketplace would like to sell you.
This is obvious, you say. Yet, many people have a difficult time applying this consumer mindset to their investing decisions. One of the most frequently asked questions these days is a variant of “The market seems shaky and I’ve read where many experts are sounding an alarm. Should I sell my stocks?” These folks may decide whether to reduce their stock holdings depending on how volatile the market has been, what the business magazines say, what the Federal Reserve may do to interest rates, or—heaven help them—what my opinion might be. Outside-in thinking will never tell you whether it’s a “good time” to sell stocks because no one knows what the market will do in coming months (as evidenced by the continual reporting of conflicting opinions from Wall Street’s bulls and bears).
Here’s a checklist an inside-out investor might run through in deciding the “Is it a good time to sell?” question.
Notice that the focus is on the personal needs and circumstances of the individual, not on the headlines of the day which almost never tell you anything that will enhance the quality of your decision-making. While current events may provoke you to run through your personal list of review questions, they should not dictate the answers.
Published since 1990, Sound Mind Investing is America’s best-selling financial newsletter written from a biblical perspective.
Originally posted 2/15/13.
by Austin Pryor for Sound Mind Investing
Mutual funds offer many benefits that can make your investing program easier and safer. Here are 20 of their major advantages.
Most investors constantly live with a certain amount of anxiety and fear about their investments because they feel they lack one or more of the following essentials:
(1) market knowledge,
(2) investing experience,
(3) self-discipline,
(4) a proven game plan, or
(5) time.
As a result, they often invest on impulse or emotion. Because of their inherent design that taps professional expertise and spreads risk, mutual funds can go a long way toward relieving the anxiety associated with investing.
If you have been putting off starting your investing program because you don’t know which stocks to invest in (and you can’t afford your own personal investment consultant!), mutual funds will get you on your way. Investing in a mutual fund usually doesn’t require a large sum of money. Most fund organizations do have minimum amounts needed to open an account (usually $1,000 to $3,000), but minimums are often dramatically lower for IRAs and for “automatic deposit accounts” (where you agree to make regular monthly deposits to build your account).
After meeting the initial minimum to open your account, you can add just about any amount you want. To make your purchase work out evenly, mutual funds sell “fractional” shares. For example, if you invest $100 in a fund selling at $7.42 a share, the fund organization will credit your account with 13.477 shares ($100.00 divided by $7.42 = 13.477).
Stock funds typically hold from 50 to 500 stocks in their portfolios; the average is around 100. They do this so that any loss caused by the unexpected collapse of any one stock will have only a relatively minor effect on the pool as a whole. Without the availability of mutual funds, the investor with just $2,000 to invest would likely put it all in just one or two stocks (a risky way to go). But by using a mutual fund, that same $2,000 can make the investor a part owner in a large, professionally researched and managed portfolio of stocks.
Their extensive diversification, coupled with outstanding stock selection, makes it highly unlikely that the overall market will move up without carrying almost all stock mutual funds up with it. For example, on Sept. 8, 2008, when the Dow jumped 290 points, more than 95% of stock mutual funds were up for the day. Yet, of the more than 3,200 stocks that traded on the New York Stock Exchange, only 63% ended the day with a gain. The rest ended the day unchanged (2%) or actually fell in price (35%).
Advisory services, financial planners, and stockbrokers have records of past performance, but how public are they? And how were they computed? Did they include every recommendation made for every account? Mutual funds have fully disclosed performance histories, which are computed according to set standards. With a little research, you can learn exactly how various mutual funds fared in relation to inflation or other investment alternatives.
Highly trained investment specialists are hired to make the decisions as to which stocks to buy. The person with the ultimate decision-making authority is called the portfolio manager. The manager possesses expertise in many financial areas, and hopefully has learned — through experience — to avoid the common mistakes of the amateur investor. Most important, the manager is expected to have the self-discipline necessary to doggedly stick with the mutual fund’s strategy even when events move against him for a time.
If you were to spread $5,000 among five different stocks, your quarterly dividend checks might amount to $10 from each one. It’s not possible to use such a small amount to buy more shares without paying very high relative commissions. Your mutual fund, however, will gladly reinvest any size dividends for you automatically. This can add significantly to your profits over several years.
Most funds let you sell your shares automatically in an amount and frequency of your choosing. This pre-planned selling enables the fund to mail you a check for a specified amount monthly or quarterly. This allows investors in stock funds that pay little or no dividends to receive periodic cash flow.
It has been estimated that the average broker needs 400 accounts to make a living. How does he spread his time among those accounts? The common-sense way would be to start with the largest accounts and work his way down. Where would that leave your $2,000 account? But in a mutual fund, the smallest member of the pool gets exactly the same attention as the largest because everybody is in it together.
Mutual funds offer accounts that can be used for IRAs and 401(k) plans. They’re especially useful for rollovers (which is when you take a lump sum payment from an employer’s pension plan because of your retirement or termination of employment and must deposit it into an IRA investment plan account within 60 days). The new IRA rollover account can be opened at a bank, mutual fund, or brokerage house and the money then invested in stocks, bonds, or money market securities. These rollover accounts make it possible for you to transfer your pension benefits to an account under your control while protecting their tax-deferred status. They are also useful for combining several small IRAs into one large one.
By regulation, all open-end mutual funds must redeem (buy back) their shares at their net asset value whenever you wish. It’s usually as simple as a toll-free phone call. Of course, the amount you get back will be more or less than you initially put in, depending on how well the stocks in the portfolio have done during the time you were a part owner of the pool.
Advantage #13: Mutual funds enable you to reduce the risk in your portfolio instantly with just a phone call.Most large fund organizations (usually referred to as “families”) allow investors to switch from one of their funds to another via a phone call or over the Web and at no cost. One practical use of this feature is that is makes it easy to reallocate your capital between funds that invest in different types of asset classes (large-company growth, large-company value, small-company growth, small-company value, foreign stocks, and fixed-income securities) as your goals and market expectations evolve.
They buy stocks in such large quantities that they always qualify for the lowest brokerage commissions available. An average purchase of stock can easily cost the small investor 2%-4% in commissions to buy and sell (depending on broker, dollar size of order, and number of shares). On the other hand, the cost is a mere fraction of 1% on a large purchase like $100,000. Many investors would show gains rather than losses if they could save almost 3% on every trade! The mutual-fund pool enjoys the savings from these massive volume discounts, enhancing the profitability of the pool. Eventually, then, part of that savings is yours. (These commission savings, however, should not be confused with the annual operating expenses that every shareholder pays.)
Mutual funds are required to hire an independent bank or trust company to hold and account for all the cash and securities in the pool. This custodian has a legally binding responsibility to protect the interests of every shareholder. No mutual fund shareholder has ever lost money due to a mutual fund bankruptcy.
Capital gains and losses from the sale of stocks, as well as dividend- and interest-income earnings, are summarized into a report for each shareholder at the end of the year for tax purposes. Funds also manage the day-to-day chores such as dealing with transfer agents, handling stock certificates, reviewing brokerage confirmations, and more.
Although you hope it will never be necessary, you can use the value of your mutual fund holdings as collateral for a loan. If the need is short-term and you would rather not sell your funds because of tax or investment reasons, you can borrow against them rather than sell them.
Many investments, primarily partnerships and futures, require investors to sign papers wherein they agree to accept personal responsibility for certain liabilities generated by the undertaking. Thus, it is possible for investors to actually lose more money than they invest. This arrangement is generally indicative of speculative endeavors; I encourage you to avoid such arrangements. In contrast, mutual funds incur no personal risk.
Due to the tremendous growth in the popularity of mutual fund investing, there has been a big jump in the number of investment newsletters that specialize in researching and writing about mutual funds. My Sound Mind Investing newsletter, for example, offers model portfolios geared to your risk tolerance and stage of life. We provide specific buy/sell recommendations that are updated each month. (To learn more, go to Sound Mind Investing.)
The fund industry is regulated by the Securities and Exchange Commission and is subject to the provisions of the Investment Company Act of 1940. The act requires that all mutual funds register with the SEC and that investors be given a prospectus, which must contain full information concerning the fund’s history, operating policies, cost structure, and so on. Additionally, all funds use a bank that serves as the custodian of all the pool assets. This safeguard means the securities in the fund are protected from theft, fraud, and even the bankruptcy of the fund management organization itself. Of course, money can still be lost if poor investment decisions cause the value of the pool’s investments to fall in value.
Someone else has done all the work of developing the recipes, shopping for quality at the best prices, and cooking and assembling the dinners so that foods that go well together are served in the right proportions. For mutual funds, that’s the job of the professional portfolio manager—he or she develops his strategy, shops for the right securities at the best prices, and then assembles the portfolio with an appropriate amount of diversification. And the analogy doesn’t stop there. Just as there are many different dinner entrees to choose from at most nice restaurants, there are also many kinds of mutual funds to choose from at most fund organizations. Each kind has its own “flavor.”
The price you pay for your shares is based on the worth of the securities in the pool on the day you buy in. Typically, the closing price is used for establishing their market value. For this reason, mutual funds are usually bought or sold only at the day’s closing prices. This means that it doesn’t matter what time of day the fund receives your order — early or late — you’ll still get that day’s closing price. (This is not the case with “exchange-traded funds,” or ETFs, however.)
You can profit from your shares in three primary ways.
1. First, the dividends paid by the stocks in the portfolio will be paid out to you periodically, usually quarterly.
2. Second, if the portfolio manager sells a stock for more than he paid for it originally, a “capital gain” results. These gains will also be paid out periodically, usually annually.
3. And third, when you’re ready to sell your shares in the pool, you might receive back more than you paid for them!
Adapted from Chapter 10 ( “What Mutual Funds Are and Their Advantages to Investors”) of The Sound Mind Investing Handbook: A Step-By-Step Guide to Managing Your Money From a Biblical Perspective (5th ed.) by Austin Pryor. Copyright 2008 by Austin Pryor.
The monthly Sound Mind Investing newsletter, published since 1990, is America’s best-selling financial newsletter written from a biblical perspective.
For more investing-related articles, visit Crown’s Investing page.
Originally posted 2/6/2013.
What would happen if you were injured in an automobile accident, incapacitated by a stroke, or the victim of an airplane crash? Would your family be able to find the information they need to handle your affairs? For most Americans the answer would be, “No!”
Most people put off until too late organizing important documents that will be needed if they die or become incapacitated. However, Solomon said, “The prudent sees the evil and hides [prepares] himself, but the naïve go on, and are punished for it” (Proverbs 22:3). Wise men and women leave their survivors with organized, readily accessible, yet safely protected, records. So, it is advisable to pull together and to organize all important papers and documents now—before the need arises (even if it means writing a new will and/or trust)—and tell at least one trustworthy family member or close friend where all papers and documents can be found.
There are a number of legal documents that your family will need to settle your estate or in case of your incapacitation.
* Your will. Your original will should be left with the attorney who drafted it. Make sure the attorney has a fireproof vault or bank vault and has a good index of wills. A copy of the will should be kept in a safe place at your home with the attorney’s name, address, and phone number printed on the front of the will; and a second copy should be entrusted to a family member or friend. Because many states do not allow immediate access to personal safe deposit boxes after the death of the depositor, wills should not be kept in safe deposit boxes.
* Letters of instruction. Letters expressing funeral wishes, distribution wishes of personal items (such as jewelry, tools, or sporting equipment), and listing the location of all critical papers and documents should be kept with the original will, as well as with each copy of the will. Also listed in that location-of-critical-papers letter should be the location of any safe deposit boxes. Write a separate letter to your attorney, surviving spouse, will executor, and a trusted friend or family member and tell them the location of the safety deposit box key.
* Durable power of attorney. Give a signed copy of the power of attorney to the person named to act on your behalf in financial matters if you become unable to do so. Also give a signed copy to your attorney, to a trusted family member or friend, and keep a copy in a safe place in your home—preferably accompanying your copy of the will.
* Trusts. If you’ve set up a living trust, the original paperwork should be kept with your attorney. A copy of the trust should be kept in a safe place at home, and copies should be given to all co-trustees and to the successor trustee.
* Health care proxy and living will. If there are written instructions that express the kind of treatment you desire if a medical condition prevents you from writing or speaking, make sure these instructions are kept in a safe but easily accessible place in your home. In addition, give a copy of the health care proxy and living will to the person you have named to speak on your behalf, your attorney, a trusted family member, and your family physician.
* Medical information. In addition to a health care proxy and living will, there needs to be kept in a safe place written information explaining any special medical conditions or allergies, types and dosage of medication taken, and a record of illnesses or hospitalizations within the previous five years. Your family physician, a family member, and the attorney should keep copies.
* Other papers. Be sure that your family knows where to find (1) your old tax records; (2) copies of leases or rental agreements; (3) mortgages, loans, and promissory notes (paid and outstanding, institutional or private); (4) insurance policies, including life, health care, Medicare (or any other Medigap coverage), and long-term care; (5) bank account records, including canceled checks and savings account records; (6) prepaid funeral and/or burial arrangement documents; (7) Social Security benefits records; (8) military records including discharge papers; (9) stock or mutual funds performance documents and annual statements; and (10) the guardianship designation of minor children in the case of the death of both spouses. The location of these critical papers should be listed in the letters of instruction kept with all copies of your will.
Make a detailed list of assets and states where documents relating to assets can be found. The original list should be kept in a safe place in your home or in a safe deposit box. Copies should be given to your attorney, will executor, trust trustee, and a trusted friend or family member. Include the following in your list of assets.
1. Retirement accounts. Include account numbers, beneficiary designations, and company(ies) where retirement funds are invested.
2. Bank accounts. Include name of bank(s), account numbers, type of accounts, branch locations, debit card numbers, credit card numbers (all credit cards—not just the ones issued by the bank), date account was opened, the name of a bank officer.
3. Brokerage accounts. Include name and phone number of brokerage firm or brokerage contact person, branch locations, name of investment funds with account numbers, and date of initial purchase(s).
4. Deeds, titles, and certificates. Include stock certificate numbers, bond series numbers, automobile and motor vehicle title numbers, and property and real estate deed numbers.
5. Outstanding loans and debts. Include the name of company, institution, issuer of credit, or individual to whom money is owed, amount of initial loan, account numbers if any, and approximate balance of each. These will likely have to be repaid as part of the estate settlement.
6. Life insurance information. Include names of insurance companies, account numbers, type of insurance, amount of coverage, date of issue, and any special consideration (such as double indemnity for accidental death).
7. A family tree. These include names of immediate family members for both spouses for at least one past generation.
8. Vital records. Include individual birth certificate and birth certificates of family members, death certificates of family members, marriage records, baptismal records, and individual passport information.
9. Personal assets. Include all personal items, including serial numbers if available; approximate date of acquisition; and approximate value. These would include electronic equipment, firearms, household accessories, clothing, jewelry, books or works of art, and so on.
Make a list of all professionals that you use or choose to use and keep the list with the original and all copies of your will. A trusted friend or family member should keep an additional copy. Include the name, address, and phone number (also include e-mail address, if applicable) of the following.
* Attorney. The attorney who drew up your will (or an attorney of your choosing if the attorney who drew up the will is deceased, incapacitated, or no longer in business).
* Accountant. Copies of old tax records can be kept with your accountant.
* Insurance agent. Name of company(ies) and agent(s).
* Financial planner
* Employee benefits person or department if you are (were) employed
* Family physician and all other preferred doctors
* Pastor
If you have not compiled this information, it needs to be done as soon as possible. As Benjamin Franklin said in Maxims Prefixed to Poor Richard’s Almanac, “Never leave that till tomorrow which you can do today.” This advice is especially true if you are planning to take a trip or are facing surgery. If you have not prepared, begin today. “Do not boast about tomorrow; for you do not know what a day may bring forth” (Proverbs 27:1). If you have organized your papers, you are to be commended, but make sure you update the information at least yearly.
Originally posted 1/11/13
God is the perfect partner in any investment program. It is He who supplies all the seed to be planted. We plant it; He multiplies it. So, any investment program ought to be based around multiplying assets that God supplies and returning the bulk of the crop, as pointed out in the parable of the stewards in Luke 19:12-24. The seeds that we retain then bring in a greater harvest the next time.
As we show our faithfulness, He will give us even more. Our responsibility is to return it to His work.
God’s number one prerequisite for investing is always centered on our attitudes. Money can be used for the comfort and convenience of our families. It can be used to provide the needs of others. It can be used to spread the Gospel. Or it can be used for destructive purposes.
Money, if misused, as in the case of the rich young ruler recorded in Matthew 19:16-30, can be an object of devotion and idolatry.
Love of money has separated families and shattered friendships. Countless marriages have split up over the love of, or the misuse of money. Christians, therefore, must assess why they want to invest and how the surplus from the investments will be used, in the light of God’s principles. God is not against prosperity, but He hates evil attitudes that often accompany prosperity. These attitudes include greed, covetousness, and pride. So, since ultimately attitude will determine how an investment surplus is used, it is vital to discover what attitudes God wants us to have.
In addition, there are scripturally sound reasons for investing, and there are unscriptural reasons for investing. If you are investing for the wrong reasons it’s like having your ladder leaning against the wrong building. No matter how high you climb, you still end up on the wrong building.
So, first we will evaluate why people invest and accumulate money, and then we’ll look at the scripturally sound and unsound reasons for investing.
Why do people invest?
1. Others advise it. Many people invest simply because someone else advised them to. They don’t have any clear personal plans or goals with regard to their investments. According to God’s Word, we are to seek good counsel, but we must weigh all counsel received against His Word. Listen, but seek God’s direction before taking action.
2. Envy of others. Many people want to invest and accumulate wealth simply because they envy other people and their successes.
3. It is a game to them. Many people invest because they consider it to be a competitive game. As such, they often get so wrapped up in the contest that they sacrifice family, friends, or health in order to win the game. They have no particular attachment to the money; it’s winning that’s important to them.
4. Self-esteem and ego. Many want to accumulate wealth so that others will envy them. Those who are victims of this motive use their money in an attempt to buy esteem and bolster their pride and ego. “A man’s pride will bring him low, but a humble spirit will obtain honor” (Proverbs 29:23).
5. The love of money. Those who love money will not part with it for any reason. Their lives are characterized by hoarding and abasement. This is a type of idol worship, which separates us from God. First Timothy 6:10, Hebrews 13:5, and Luke 9:25 caution against the love of money.
6. Protection. Many people accumulate money for protection. This attitude places money as the object of trust and security rather than God.
7. Slothfulness. Often people don’t plan well during the earlier years of their lives and, consequently, when faced with expenses in their middle or later years, they panic and try to generate in five years what they should have saved over the previous 20 years. A regular habit of spending less than you make and saving the difference is the proper investment plan.
8. A spiritual gift. There is only one reason why God would supply a surplus of wealth to a Christian: so the needs of others can be met. If Christians want God to entrust greater riches to them, they must be found faithful in the smaller amount first (Luke 16:10-11). God promises His blessings to all who freely give and promises His curse on those who hoard, steal, covet, or idolize.
What are the scripturally sound and unsound reasons for investing? There are three scripturally sound reasons for investing.
1. Multiply to give more. The parable of the talents recorded in Luke 19:12-26 tells us that God entrusts wealth to some of His stewards so that it will be available to Him at a later date. The management of the wealth requires that it be invested or multiplied.
2. Meet future family needs. The indication throughout God’s Word is that the heads of families should provide for their own (1 Timothy 5:8). Good planning requires laying aside some of the surplus for future needs.
3. Further the Gospel and fund special needs. This type of giving is necessary to maintain and promote the Gospel. If the church is ever to break out of the borrowing habit, Christians who invest must maintain some surpluses and be willing to give to legitimate needs.
There are four unsound reasons for investing.
1. Greed is the desire continually to have more and demand only the best (1 Timothy 6:9).
2. Envy is the desire to achieve based on other people’s successes (Psalm 73:3).
3. Pride is the desire to be elevated because of material achievements (1 Timothy 6:17).
4. Ignorance is following the counsel of other misguided people because of lack of discernment (Proverbs 14:7).
Once a Christian has accepted the purpose of investing—to serve God better—the crucial decision is how much to invest. This decision must be made after much prayer. In addition, a plan for the use and the distribution of the potential surplus must be made before the money becomes available. Set goals and pray about each goal before attempting to do any investing. If motives are anything but biblical, it would be better to give the money away rather than to risk losing something far more important than money—a relationship with the Lord.
Being rich or being poor is a matter of providence in God’s will, and He will give us only what we are capable of handling. The Christian’s responsibility is awesome and sobering. God, in His eternal plan, has decided to use us to supply and to fund His work. One day we must all stand before God and give an account of what we have done with His resources. Why does God provide an accumulation of wealth from investing? So His people can exercise giving in order to meet the needs of those who cannot provide for themselves.
Originally posted 1/10/13
James E. Bauer, deputy assistant director of the Office of Investigations for the U.S. Secret Service said, “Ready or not, here it comes: identity takeover fraud has come into its own and promises not to go away until significant changes evolve in the manner and methods by which personal identifiers are collected and used. Consumers would do well to arm themselves with knowledge on how to mend the damages when victimized.”
“We think it’s a significant, growing problem,” says Joshua Hochberg, chief of the fraud section in the U.S. Department of Justice’s criminal division. “I would expect that there will be a significant increase in the number of federal prosecutions.” Identity theft is the fastest growing crime in America, affecting on the average of 500,000 new victims each year, for the past decade.
The Secret Service says that victims and institutions in its identity-fraud investigations lost more than $3 billion between 1998 and 2002. Identity theft is the most called-about subject on the Privacy Rights Clearinghouse’s telephone hotline (619-298-3396). Such crimes have accounted for more than 25 percent of all credit card fraud losses since 1997.
How can someone steal an identity? By co-opting your name, Social Security number, credit card number, or some other piece of personal identification for his or her own use. In short, identity theft occurs when someone appropriates your personal information without your knowledge to establish a parallel identity. That allows them to pretend to be you to open bank accounts and apply for loans, for example, and you may not know it is happening for months or years. The impostors don’t pay the bills and you are left with a disastrous credit report.
Listed below are some suggested ways in which your privacy could be protected, but please note that these protective measures will not necessarily prevent a criminal from getting access to your credit from a less-than-cautious credit grantor.
* Shred all important papers and all correspondence with your name and/or address on it.
* Be careful of “shoulder surfing” at ATMs and at public places where you might use your credit or debit cards.
* Do not put checks in the mail at your home mailbox.
* Cancel all credit cards that you do not use or have not used in six months.
* Put passwords on all accounts.
* Memorize Social Security numbers and passwords. Do not carry your Social Security card.
* Do not put your Social Security number on checks or credit receipts.
* Do not put phone numbers on checks.
* Do not put your credit card numbers on the Internet unless it is encrypted on a secured site.
* Monitor all bank statements for every credit card every month.
* Order a credit report at least yearly and review it carefully. Immediately correct any mistakes on your report in writing.
* Make a list of all your credit card account numbers and bank account numbers and keep them in a safe place.
* Always take credit card receipts with you. Never toss them in a public trash container.
* If you receive an e-mail request that appears to be from your Internet Service Provider (ISP) stating that your “account information needs to be updated” or that “the credit card you signed up with is invalid or expired and the information needs to be reentered to keep your account active,” do not respond without checking with your ISP.
In identity-theft cases, the victim often has to prove his or her innocence. The burden remains on victims to straighten out the credit mess the imposter has made. This shocks most new identity-theft victims who naturally expect the police, the credit grantors, the credit-reporting agencies, or others in positions of authority to help them.
Generally, victims of credit and banking fraud will be liable for no more than the first $50 of the loss (15 USC 1643). However, the victim must notify financial institutions within two days of learning of the loss. Even though the victims may not be liable for the imposter’s bill, they often are left with a bad credit report and have to spend months, or even years, regaining their financial health.
In 1998, when Congress made identity theft a federal crime, it directed the Federal Trade Commission to establish a clearinghouse for identity-theft complaints and assistance. The clearinghouse’s Web site (www.consumer.gov/idtheft) and the counselors who staff the FTC’s toll-free hotline (877-438-4338) will provide assistance on what steps to take if you become a victim of identity theft.
As a victim of identity theft it is important to act immediately to stop the thief’s further use of your identity.
* Report the crime to the local police
* Immediately call all credit card issuers and get replacement cards with new account numbers.
* Call the fraud units of the three credit reporting companies: Experian (888-397-3742), Equifax (800-525-6285), and Trans Union (800-680-7289). Ask for your account to be flagged, and add a victims statement to the report. You also can contact the National Fraud Information Center (800-876-7060) for step-by-step instructions on how to proceed.
* Notify your bank of the theft. Get a new ATM card with a new account number and password.
* Contact the Social Security Administration (800-269-0271).
* Report fraudulent checks to: Telecheck (800-710-9898), National Processing Co. (800-526-5380), or Equifax (800-437-5120).
Victims of identity theft often report feeling that they are somehow to blame. They also can feel violated, even powerless, due to the fact that few, if any, of the authorities who have been notified of the crime step forward to help the victim.
The very first thing a Christian must do is to transfer ownership of every possession to God. This means money, time, family, material possessions, and credit. This is essential to experience the Spirit-filled life in the area of finances. A Christian must realize that there is absolutely no substitute for this step. If you believe that you are the owner of even a single possession, the events affecting that possession are going to affect your attitude.
However, if we make a total transfer of everything to God, He will demonstrate His ability. He will keep His promise to provide every need we have according to His perfect plan. Financial freedom comes from knowing that God is in control. What a relief it is to turn our burdens over to Him.
If we becomes victims of identity theft, we can say, “Father, I gave my credit to You; I’ve been, to the best of my ability, a good steward of that credit. It belongs to you, so do with it whatever You would like.” Then look for the blessings God has promised.
Originally posted 1/5/13.
A survey in Business Week magazine reported that only one out of six Americans is content with his or her job. That means that nearly 83 percent are dissatisfied. The most consistent complaint was a lack of fulfillment or long-term purpose.
Certainly, many Christians also fall within this large group of dissatisfied, fearful workers. Why? Primarily because their value system has been altered by worldly standards to a great degree.
Our society defines successful people as those with good educations, secure positions, and plenty of money.
However, the Bible says that successful people are those who serve God first, are of service to other people, provide for family needs, and are at peace with themselves and with contemporaries.
For Christians to accept non-Christian vocational goals is to invite future problems. “But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction” (1 Timothy 6:9).
Regardless of the income, prestige, or security of a vocation, unless it truly merges with God’s will, unrest will persist.
The primary characteristic of those who successfully discern God’s will for their lives is that they continually seek to put God first. Most Christians experience doubts and anxieties when faced with major decisions. However, consistently putting God first eliminates most anxiety-producing decisions before they become crises.
Without exception, most people who are trapped in prestigious, well-paying jobs that don’t meet their inner needs spend their lives envying the very people who are envying them. “There is one who pretends to be rich, but has nothing; another pretends to be poor, but has great wealth” (Proverbs 13:7).
The only true way to find God’s direction is to seek it earnestly.
Most Christians do not sense His direction because of worldly pressures associated with the income, prestige, or security of a good job, or they sense it and then lose it by failing to act on it.
The best indicators of correct vocational direction for people are their basic abilities. God has endowed every Christian with unique abilities, desires, and gifts to accomplish His will through them (see 1 Corinthians 12). As Christians seek to truly serve God, the Holy Spirit will make known God’s perfect vocation for them.
Authentic vocations should not be based on our wills or our desires in life. A vocation is not doing what we want to do in our lives, unless of course it is also God’s will. Choosing the right vocation must include discerning what He wants for us in our lives.
As Christians, we have the advantage of knowing a certain future. Thus, we have the responsibility to orient our lives accordingly. In addition, we have the advantage of being able to see life from God’s perspective.
Therefore, it is vital to seek discernment regarding God’s plan. Because our decision must be based primarily on how we can best use our gifts and talents to serve Him, accepting nothing less than the vocation that will complement and extend that ministry is essential.
There is nothing wrong with a successful career; in fact, God promises great blessings. “The reward of humility and the fear of the Lord are riches, honor and life” (Proverbs 22:4). However, attitude is the key ingredient in any vocational decision. Is the decision made by worldly standards—security, ego, income—or is it made to please and serve God and thus serve other people? “He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity” (Ecclesiastes 5:10).
In choosing a vocation Christians must weigh their priorities very carefully, because when we are out of God’s priority guidelines, we are out of His will.
Christians can tell whether they are out of His priority system by asking the following questions.
1. Is my personal relationship with the Lord affected? This includes my time spent in God’s Word, in prayer, and in worship with others; and
2. Is my relationship with my family affected? This includes time spent with my spouse/child(ren).
Many vocational alternatives and options can be eliminated simply because they do, or have the potential to, conflict with these priorities. By evaluating every alternative and option through prayer and mature Christian counsel, Christians can guard against violating God’s laws while fulfilling life’s goals.
Originally posted 1/2/2013
By Chuck Bentley—WashingtonTimes.com—Monday, December 24, 2012
Killing incentive to give will hurt the poor, not the rich.
A fundamental misunderstanding of the Robin Hood legend in the current discussion of tax policy undergirds a mistaken idea, too rarely evaluated—that hurting the “rich” helps the “poor.” Right now, this is played out in proposals to reduce tax deductions for charitable giving.
Government-spending advocates argue that they should be able to seize more funds from the wealthy by limiting deductions for nonprofit giving. The “rich” will hand over their money to the government in higher taxes and continue to give charitably, and the “poor” will receive largesse from both.
This strained reading of Robin Hood makes several very flawed assumptions, including the idea that government is an effective source of help for the poor and that wealth builders deserve to be penalized. In fact, the Robin Hood of legend took back from tax collectors the money seized from the poor and returned it—a medieval tax refund. The heroic act was helping people keep their own money, unjustly seized by the ruling class who did not use those resources to help the needy.
When it comes to real help, just who is most effective? This is the deeper question begging an honest answer.
The government’s so-called war on poverty has yielded more people in poverty, creating a vicious cycle of despair. “Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion,” according to the Congressional Research Service and Senate Budget Committee.
Welfare is now the largest expenditure of federal dollars, bigger even than Social Security and basic defense spending. Today, an estimated 1 in 6.5 Americans is on food stamps, according to figures released in September. Compare that to 1 out of every 50 Americans on food stamps in the 1970s.
Also helping have been food banks, homeless shelters, Catholic Charities, faith-based hospitals, battered women’s shelters, churches, synagogues and ministries of all kinds—a network of organizations committed to doing unto others as you would have them do unto you. This vast network of resources from the private sector has become a tangible expression of the Golden Rule. These organizations represent love in action by offering a diverse array of services and genuine compassion for emotional needs as well.
Charitable organizations are now facing a crisis of their own, however, given the repeated proposal by the Obama administration to cut or substantially reduce the charitable giving deduction, presented in its budgets and now in its negotiations over the “fiscal cliff.”
Even politically speaking, this is a mistake. Three out of 4 Americans do not favor cutting, capping, or limiting the charitable tax deduction, according to a survey by Dunham+Co., a consultant group to charities. It is not just about assistance for the poor. At stake are jobs created through the generosity of Americans.
“It’s important to remember that 1 out of 10 jobs in America come from the charitable sector,” said Rick Dunham, president and CEO of Dunham+Co. “Charities are much more efficient in delivering social good as independent studies have shown that 70 cents of every dollar goes to recipients of charitable services compared to only 30 cents of every dollar from the government.”
Unmoved by governmental ineffectiveness, the White House set its eye on collecting an additional $291 billion over the next decade by cutting the charitable giving deduction, despite Congress’ repeated rejection of the idea. Inexplicably, that attempt to bring in less than $300 billion over a decade could put at risk the $300 billion that Americans donate to nonprofits each year. In fact, the top 2 percent of taxpayers donate more than $100 billion to support the work of nonprofits, providing a real benefit to all.
The Obama administration’s plan to cut the deductions available to wealthy givers ignores completely the fact that the ability of major donors to provide real help is an American asset, not a tax shelter. Without that support, real people will be hurt.
Dunham+Co. found that 33 percent of donors overall said they would reduce their giving if the deduction didn’t exist, and that number rose to 40 percent for donors ages 40 to 59. Giving is already down across the country, in decline from a peak of $311 billion in 2007. This year, the fiscal cliff is frightening people into holding on to their cash.
The top four reasons cited for reducing charitable giving this year were concern for health care costs (36 percent), personal financial situations (35 percent), uncertainty over the economy (34 percent) and the prospect of the “fiscal cliff” (32 percent). But those worrying over their stagnant resources will not be the most hurt. Those deemed “rich” may hold on to their cash, but the poor will feel the pain.
More than 100 years ago, the U.S. government wisely created the tax deduction for charitable giving, understanding that you get more of what you pay for and less of what you tax. With that encouragement, Americans became the most charitable givers in the world.
In its second annual study of 153 countries, the Charity Aid Foundation concluded that the United States has demonstrated “strong” behavior across all three criteria measured—volunteering, helping strangers, and donating money. The tax break might not have caused acts of good will—but it didn’t hurt.
While it is true that most Americans do not practice the biblical model of tithing 10 percent, Americans on average give about 2 percent of their income to help others. Such acts connect people to the needs of others and remind them that there is more to life on this earth than the acquisition of things.
It is not just that government fails miserably at handling the needs of Americans. Detaching ordinary people from the responsibility to give to those in need allows us all to become more self-centered and hardened to the pain around us. It gives an excuse to walk by the needy, rationalizing that it’s Uncle Sam’s problem.
America has unwisely spent more money than it takes in and failed to address the reality that political promises come with a steep price tag. A budget crisis exists, and it needs to be solved. It will not be the “rich” who suffer if the charitable giving deduction is ended. It will be those most vulnerable who will lose the blessings of help provided through the private sector. This is no Robin Hood plan—it will take from the rich and the poor alike.
