Dear Chuck,
Is it a sin to be in debt? I feel guilty for having debt.
Not Debt Free
Dear Not Debt Free,
No, there is not a law or command in the Bible to be out of debt, but it is a good principle to live by.
Like you, most Christians probably know that it is best to live debt-free. The belief has been so popularized that it may overshadow more important Biblical financial principles. Having studied this topic for the past 20 years, it is my opinion that getting out of debt should not be a believer’s primary or ultimate goal.
While it is important to pay off your debt, I believe there are three areas of greater significance that should concern us regarding stewardship.
Get Out of Claiming Ownership
The Bible makes it very clear that you and I do not own anything; we are God’s stewards. We came into the world naked and will depart in the same condition. This is not simply good theology, but a truth that God wants us to put into practice. If we claim ownership of our money and possessions, we become materialistic and vulnerable to placing our identity in what we have. The weight of trying to accumulate, protect, maintain, and grow our things can control our lives.
Here are three ways to get out of the ownership trap:
Psalm 24:1 (ESV) proclaims, “The earth is the LORD’s and the fullness thereof, the world and those who dwell therein…”
Get Out of Temporal Financial Planning
The vast majority of the personal finance industry, the financial planning industry, and much of the estate planning industry operate ignorant of God’s truth. He commands us to lay up treasures in Heaven and not on Earth.
The parable of the foolish farmer in Luke chapter 12 is a good example. A wealthy entrepreneur struggling to manage his surplus made a short-term financial plan with the goal of taking life easy. Verses 17-21 (ESV) read:
…He thought to himself, “What shall I do, for I have nowhere to store my crops?” And he said, “I will do this: I will tear down my barns and build larger ones, and there I will store all my grain and my goods. And I will say to my soul, ‘Soul, you have ample goods laid up for many years; relax, eat, drink, be merry.’”
But God said to him, “Fool! This night your soul is required of you, and the things you have prepared, whose will they be?” So is the one who lays up treasure for himself and is not rich toward God.
Clearly, planning for our well-being while neglecting God is foolish. Here are three ways to get out of the temporal financial planning trap:
It is good to plan for today and tomorrow, but if we don’t get out of temporal financial planning we will never get into eternal financial planning and be prepared for “that day.”
Get Out of Greed, Coveting, and Selfishness
Greed is wanting more of what you already have.
Coveting is wanting what someone else has.
Selfishness is using what you have exclusively for your own benefit.
We can justify anything that we want or think that we need. Greed drove the foolish farmer to build bigger barns. Ahab coveted Naboth’s vineyard so murder was justified. Nabal’s selfishness temporarily deprived David and his starving soldiers of food.
I know people with a twin-engine plane who are working to get a turboprop so they can travel to their beach house quicker. I know those with a turboprop waiting to get a next level jet, so they never have to fly commercial. I know people with two homes that are looking for a third while ignoring the millions of homeless people in the world. I know people who travel to locations that make jaw-dropping social media picture backdrops but never consider serving the poor who live there.
Three ways to get out of greed, coveting, and selfishness:
Get Your Heart Right
Even if we are debt-free, we can stay trapped in a life of vanity and insignificance until we get out of greed, coveting, and selfishness.
Once you get out of claiming ownership, temporal financial planning, and any financial sins that grip your heart, it would be good to also get out of debt. But don’t simply pay off the bills to feel better about your financial condition. Remember the rich young ruler; he was out of debt, but his heart was not fully surrendered to the Lord.
This article was originally published on The Christian Post on November 13, 2020.
Dear Chuck,
How do you think a Biden presidency would impact my retirement nest egg? It is hard to know which way this election will go! I can’t afford to lose my savings.
Fearful Retiree
Dear Fearful Retiree,
Thanks for the question. As of this writing on November 4th, the day after the presidential election, there is no certain winner. In fact, it looks as if it could be an election that is settled in the courts before it is all over. So, while I will answer your question, it does not assume that Vice President Biden will in fact be elected president.
Short-Term Perspective
I wrote an article earlier this year about the possible worst-case scenario for investors: a contested election. In it, I stated that markets hate uncertainty and if we have a delayed outcome of our election, I expected the markets to tank. I was wrong.
As of right now, the markets are in fact up in the midst of enormous uncertainty regarding the ultimate outcome of the election. There are three possible explanations for this based upon a near equal split of the popular vote: (1) Investors sense that Vice President Biden will be the victor and that massive amounts of stimulus money will be forthcoming. Essentially, they are going long on government bailouts. (2) Investors sense that President Trump will emerge the victor and maintain his pro-business, pro-growth policies that will remove the lockdown restrictions hurting economic growth. (3) Investors believe a Democratic president and Republican senate will present gridlock or provide checks and balances against radical legislation.
No one truly knows which, if any of these options, is driving the optimism in the markets. We can only speculate and better understand with hindsight.
This is good news for the millions of Americans who do not want to see their investments in public stocks and bonds go into a free fall while we wait for this chaos to be sorted out. Hopefully, in the short term, your nest egg will not suffer.
Long-Term Perspective
When considering the economic impact during a full presidential term, I am in the camp of Steve Forbes. Mr. Forbes, editor-in-chief of Forbes Magazine and two-time GOP presidential candidate, predicted on September 4th that a Biden presidency would be “an unmitigated economic disaster.” His dire outlook is based upon the stated platform position to raise taxes on the rich, which will slow economic growth. Mr. Forbes predicted a return to a state of “stagflation,” which is a paradox of inflationary prices but slow or no economic growth to keep up.
A Shift Away from Capitalism
We also know that the Biden/Harris ticket has a strong expectation to implement policies of the Democratic Socialist platform. This includes the Green New Deal, the return of Obamacare taxes, and punitive policy towards the fossil fuel industry in America.
Socialism and/or communism, by definition, are economic philosophies that embrace centralized control of resources with the idea that wealth is redistributed by political leadership not based upon merit or achievement or personal rewards but based upon a government’s definition of what is “fair.”
Sadly, in actual practice, governments often think it is fair to take from political adversaries or those who do not support them to give to their own constituencies or even to keep the resources for themselves. Socialist structures can become a means of coercion that provide a way to take from the producers and give to the non-producers. And usually, those whose resources are taken are first attacked, denounced, and defamed as unworthy and flawed.
The Bible is clear that we must work as unto the Lord if we are able, and with the rewards we earn, be generous toward those who are less fortunate. A socialistic structure turns that on its head. Those who work and achieve can be deemed unworthy; those who contribute nothing can be rewarded for merely being associated with those who have power.
I reached out to my friend and noted economist, Jerry Bowyer, for his help. He noted, “Christians who have fallen prey to socialist ideas tend to fall for the lie that the love of money is to be equated with free-markets. In other words, anyone who prefers free markets is deemed to be implicitly endorsing the love of money. Freedom equals greed. This is a lie, a dangerous one.”
Jerry also added this important insight:
Every system of political economy (which is what we call the study of the proper relationship between the state and the economy) involves money. Capitalist countries have money; socialist countries have money. Both systems have rich people. Both systems have poor people. The difference is that under socialism, it is the politically connected who become rich.
History is replete with examples of how this philosophy ruins economies. We can expect bigger government, more bureaucracy, more federal debt, and slower GDP growth. This will likely be bad for your nest egg long term.
Time to Be Wise
There is valid reason to believe that the fundamental pillars of our nation would be altered during a Biden/Harris term. I do not know how to invest to counteract policies and measures that are yet unknown. I do know that Solomon gave wise advice to investors who were unsure of a looming disaster. He said to diversify:
“Invest in seven ventures, yes, in eight; you do not know
what disaster may come upon the land.” (Ecclesiastes 11:2 NIV)
This is a good time to diversify your investments into asset classes that will perform well regardless of what the future holds. Professional advisors with a kingdom worldview can be beneficial in helping you to achieve this.
An analysis of investing performance also shows that holding steady in a well-diversified portfolio has greater benefits than trying to jump in and out of the market as circumstances change. The yo-yo effect of selling when the market is bad and buying when the market is good causes most investors to buy high and sell low and thus suffer losses.
If you are in your senior years and are concerned about needing funds in the near term, consider moving your retirement funds to very low-risk places like certificates of deposits (CDs), money market accounts, or even cash.
Do not live in fear and anxiety. Regardless of who becomes president, God is in control. He knows your needs and holds your future in His hands.
This article was originally published on The Christian Post on November 6, 2020
Dear Chuck,
Are we headed towards negative interest rates? If so, how in the world do I prepare for that?
Rates Below Zero?
Dear Rates Below Zero,
This is a great but very challenging question. With our federal funds rate (the cost for our banks and financial institutions to borrow money) essentially at zero right now, many are wondering if they will be forced to go below zero to keep the economy growing. I will try to give some insight to both of your questions.
It is important to understand that interest rates are a primary tool of a nation’s central bank to impact inflation levels, employment, spending, and investing. Interest rates are typically a reward/profit to lenders and a cost to borrowers. Negative interest rates seem to turn that upside down.
How Likely?
To your first question about the probability of the U.S. going there, I have to answer: maybe. Negative rates have never happened in the U.S. but the goal would be to positively impact economic growth should it remain stalled.
Earlier this month, The Bank of England requested reports from the CEOs of commercial banks on their readiness for negative interest rates. The European Central Bank and the countries of Japan, Switzerland, Denmark, and Sweden have already cut key interest rates below zero. The hope is to encourage spending and boost a staggering economy. Commercial banks would pay fees to the Bank of England for money held in excess of required amounts. This would encourage banks to take more risk by lending to satisfy the government’s desire to fuel economic growth.
Banks are already suffering the fallout of Covid-19. Will this pressure them even more? Are IT systems prepared to handle a move this significant?
Last year, Wharton’s Itay Goldstein and Peter Conti-Brown along with Lisa Cook of Michigan State University discussed the subject. The three agreed that we are more likely to see negative rates than not.
Adam Baratta, author and co-owner of Advantage Gold, believes the U.S. will consider following the path of Japan because of the high levels of debt. Writing in the Great Devaluation, Baratta says:
Some are calling for America to copy Japan’s accomplishments. Before getting too excited, keep in mind that the Japanese stock market collapsed 30 years ago and still hasn’t gotten back to where it was then. These policies have failed. A central bank managed economy is nothing to leap for joy about. Through manipulation, Japan has been able to steadily cancel out their own debt at an incredible rate of $720 billion per year. They are accomplishing this feat by selling their debt to their own Central Bank. Negative interest rates allow the Japanese to roll over their debt at no cost, which allows the Central Bank of Japan to literally erase government debt. It also increases their balance sheets.
Negative rates turn economic orthodoxy inside out. Debts become assets and savings become liabilities. The goal of getting consumers to spend money has many unintended consequences such as creating ultra-low mortgage rates, effectively zero, and rapidly increasing the price of real estate.
What is the Possible Impact?
One result is that banks reduce lending, pass fees on to customers or charge them to hold deposits. Another likely outcome is for banks to begin charging many fees to offset their losses on their traditional source of income, interest charges.
Whenever our Federal Reserve lowers rates, they hope to increase borrowing and spending. But the outcome of negative rates is a great unknown in the United States.
Conti-Brown, speaking on the Wharton panel, notes that predicting the outcomes of negative interest rates is extremely challenging. He says, “We simply don’t know how markets in the world’s largest economy would respond to this new world.” We cannot know whether it would lead to “explosive economic growth” or “high inflation that we never expected or… something new that might just be coming our way that we didn’t anticipate…”
The collective concern of the Wharton panel experts is they think it could cause individuals and corporations to go into a wait-and-see mode. In that scenario, we may see “stagflation” occur when inflation meets stagnant economic growth. But nobody knows for sure.
The impact of negative rates on U.S. borrowers and savers is truly unknown.
It is possible a consumer backlash could occur such as a run on banks. Another concern is runaway inflation. For most seniors who are dependent upon their retirement accounts to earn some low-risk returns, it could have devastating consequences. If they are like me, they will probably put more money into stocks, bonds, or other assets that can keep up with the rate of inflation.
How to Prepare?
Here is a brief tutorial that may be helpful. A year ago, I addressed negative interest rates here.
If you are forced to pay a fee to keep your money in a bank or savings account, be prepared to pull your cash out and have a safe place to store it. Obviously, the cost of home vaults would likely soar and they may become hard to find.
Some will rush to gold. This strategy makes sense so long as you are not putting all of your cash into it. Gold benefits when fear is high but drops rapidly when fear dissipates. Be careful by diversifying into other assets that you understand.
Regardless of what happens to interest rates, we must trust the Lord. Perhaps this is a test for us!
“I believe that I shall look upon the goodness of the Lord in the land of the living!
Wait for the Lord; be strong, and let your heart take courage; wait for the Lord!” (Psalm 27:13-14 ESV)
Visit Crown Online to access studies and tools designed to help you grow as a faithful steward. I hope these resources help you prepare for the unexpected.
I will keep my eye on this trend and write more about it as I learn more. This is one that will impact all of us!
This article was originally published on The Christian Post on October 30, 2020.
Dear Chuck,
The real estate market in our area is booming! We are thinking of buying an upgraded home with these low rates but are worried we may not be able to find what we really want or need. Can you give us some tips?
Homebuying Fever
Dear Homebuying Fever,
We are in the midst of a real estate boom across the country so be patient. This is what is called a “seller’s market.”
Low mortgage rates and high demand have created an inventory shortage around the country. This is driving up prices. Usually, sales begin to taper off in the fall but, this year, buying remains unusually active.
Ann and I have purchased six homes in our 42 years of marriage. We have learned a lot of lessons–things to do and things NOT to do! I will gladly give you lots of tips.
There are three essential steps before making the decision to change from your current home: research, pray, and seek wise counsel.
Research Before Buying
When buying a home, location is key. Always consider a resale scenario and try to buy what others would want. Do not buy somebody else’s problem. Be sober-minded. Avoid letting your emotions override facts. Power lines, busy streets, flooding, poor floor plan, and length of time on the market are just a few red flags that you absolutely should not ignore.
Do some extra homework. Know the typical price per square foot in the location where you want to buy, and aim to stay within that range. Again: think resale.
Drive to the house at different times of the day. Study traffic patterns, observe people, and talk to neighbors. Do they like living there? Does everyone get along? Are there issues within the homeowner’s association? How are the schools? Is crime an issue? Are properties well-maintained? What are the covenants? Can the home be rented out? Are VRBOs or Airbnbs allowed?
If you work from home, determine where and how it would work in the house. If you exercise hospitality, be sure to analyze parking, dining, gathering, and sleeping space. If you plan to stay there for a long time, are there stairs? Is the primary bedroom on the main floor? Can you access or adapt areas if a wheelchair is needed? Is there room to accommodate parents or adult children who may need a place to land at some point? Are there any immediate repair or remodel costs?
Make sure you have a quality inspection performed and that all issues are resolved in advance. I can tell you nightmare stories about buyers who “fell in love” with a home only to find out later it was a money pit of maintenance problems.
Spend less than that for which you qualify. Being ‘house poor’ creates tremendous stress in a marriage. Don’t invite it in.
Remember, there is nothing wrong with renting. It can provide the flexibility that home-ownership cannot. A rent vs. buy calculator may ease your mind.
Refinancing
With historic low rates, your best option may be to refinance where you are and pay it off quickly.
I remember talking to a banker when closing on our first house in the ’80s when the only loans available were 3- and 5-year adjustable-rate mortgages (ARMs). He told me we would never see 30-year fixed-rate mortgages again. Yet, here we are with the lowest 30-year and 15-year fixed rates in my lifetime.
If you are in a position to refinance, use our calculator to understand different scenarios. Shop around and familiarize yourself with different lenders and rates. Study the reviews of individual brokers with the lender you choose. Gather essential documents and work diligently to complete the process in a timely fashion.
Important Considerations:
Remodeling
Many people are fixing up their existing homes. Before moving, consider adding on or remodeling the home you are in now.
This, on top of the disruption created by Covid-19, has created a lumber shortage and elevated prices. Some building supplies and sub-contractors are backed up for weeks, even months. Homeowners must take this into consideration if making plans.
Study trends and think resale when planning projects.
This is Not Permanent
When buying, refinancing, or remodeling, you must think about resale. Very few people stay in one home for their entire life. Again, research, pray, and seek wise counsel on any of these options as well.
Remember that wherever believers make their earthly home, they always have a better one. It’s being prepared for us and one day Jesus will come and take us there (John 14:1-7 ESV). Let us not lose sight of the eternal by the busyness of the temporal.
In the midst of the real estate boom, may we keep our priorities in check and join the Apostle John in saying, “Come, Lord Jesus!” (Revelation 22:21 ESV)
My wife, Ann, and I are doing a new podcast to help families with their finances. It is called “Family & Finances, Stories of Failure and Success.” I think you would enjoy listening to our real estate stories and many of our other lessons on a variety of topics. Thanks for your question.
Originally published by the Christian Post, October 23, 2020.
Dear Chuck,
My daughter and son-in-law have decided they will not have children due to overpopulation and the cost. I don’t understand how they could make such a decision. Can you give me some good stats to share with them?
Hoping for Grandchildren
Dear Hoping for Grandchildren,
Since I have five grandchildren already, I know the joy they bring! Obviously, it is their choice whether they want to have children or not, but I would hate to see them make that decision for the wrong reasons. Based on what they have told you, I would say there is no reason not to have children. Let’s take a look at the facts.
Underpopulation is a Bigger Problem than Overpopulation
A population’s replacement level is a total fertility rate of 2.1 live births per woman.
From 1950 to 2017, research conducted by the University of Washington’s Institute for Health Metrics and Evaluation indicates that American fertility rates decreased from 4.7 live births to 2.4. That is nearly a 50% decrease! But it gets worse. In 2019, America’s total fertility rate dropped to an alarming 1.7.
The research, published in the Lancet, states that the current world fertility rate, about 2.4, could drop to below 1.7 by 2100.
Despite dropping population growth in some parts of the world (like eastern Europe), large population increases have occurred in sub-Saharan Africa. Of the 59 countries with fertility rates of more than 3 live births per woman, 41 of those are in sub-Saharan Africa. Based on the work of several organizations to slow down population growth, I wonder how long that will continue.
The BBC addressed the economic concern in an article entitled “Fertility rate: ‘Jaw-dropping’ Global Crash in Children Being Born.” Professor Christopher Murray told the BBC, “It will create enormous social change.”
Like Murray, experts are wondering who will pay taxes in a senior-dominated world? Who will cover welfare, healthcare, and the benefits that countries bestow on their people? Who will actually care for the growing elderly population? Who will be the innovators and caretakers of God’s creation?
Singapore’s Deputy Prime Minister Heng Swee Keat told parliament that because COVID-19 is causing would-be parents to postpone parenthood, he wants to grant an additional financial bonus to help cover expenses. This is in addition to the current baby bonus to incentivize parents. The country is facing its worst economic crisis due to COVID-19 on top of a fertility rate that is one of the lowest in the world: 1.14.
Why the fall in fertility rates?
Planned Parenthood cites financial concerns as a reason many women choose to have an abortion:
Financial concerns often play a role in a woman’s decision for abortion. The Guttmacher Institute survey found that nearly three-quarters of women (73%) chose abortion in part because they felt they could not afford a baby at that particular time in their lives.
There are other considerations that affect population growth. These include reduced fertility as women wait to bear children, environmental toxins, pandemics, natural catastrophes, and wars. The Brookings Institution, using data from the Great Recession and the Spanish Flu, predicts a U.S. “Covid baby bust”: the possibility of half a million fewer births.
At the World Artificial Intelligence Conference held in Shanghai, August 2019, Elon Musk said the biggest problem facing the world is population collapse, saying, “Most people think we have too many people on the planet, but actually this is an outdated view.” Jack Ma, China’s outspoken technology billionaire, agreed.
My bottom line is there is no reason to worry about overpopulation to justify not having children.
Economics and Children
There will be a negative economic impact on the world due to the imbalance between young workers and a retired population. God will not be mocked.
In the ESV, God says “be fruitful and multiply” nine times in Genesis alone. After creating Adam and Eve, in Genesis 1:28 we read, “And God blessed them. And God said to them, ‘Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth.’”
Babies are Blessings
The Bible makes it clear that children are designed by God to be a blessing.
“Behold, children are a heritage from the Lord, the fruit of the womb a reward. Like arrows in the hand of a warrior are the children of one’s youth. Blessed is the man who fills his quiver with them! He shall not be put to shame when he speaks with his enemies in the gate.” (Psalm 127:3-5 ESV)
The Lord speaks of the family (marriage and children) as being a blessing in Jeremiah 29. He tells the Israelites, “increase, do not decrease.” It is one of the ways that the Lord prospers us and gives a hope and a future. I truly believe that children are an investment in our future happiness and a way that we send a blessing into the world.
While it may seem expensive, daunting, and frightening to have children in today’s world, God is the Author of life, the Creator of each new child that is born, and the Provider for our every need. In the Philippines, they have a saying, “each baby is born with bread in its mouth.” This is their way of expressing that provision will arrive when the child arrives. It is a beautiful, simple way to acknowledge that God knows our every need and He is faithful.
Over and over I have seen young families trust God with the decision to start a family and experience His faithfulness to take care of their needs. It is good to encourage them to be prepared financially should they change their minds and the Lord allow them to be blessed with children.
I hope this helps! Let us know if grandchildren are in your future soon!
Originally published by the Christian Post, October 16, 2020.
Dear Chuck,
I’m new to investing and don’t really understand the ramifications of inflation and deflation. I would like to position myself to minimize loss regardless of what happens. Any tips?
Novice Investor
Dear Novice Investor,
I am not a professional investment advisor but can give you some Biblical financial principles that will help you get started on a solid foundation.
1. Investing involves the risk of losing money. Be sure you have an emergency savings account in place before investing money. Don’t invest any money that you cannot afford to lose.
As my friend, Vince Birley says, if losing money makes you upset, maybe you need to give it away instead of investing it.
2. Avoid investing to simply acquire wealth. Motives matter to God.
“Do not toil to acquire wealth; be discerning enough to desist. When your eyes light on it, it is gone, for suddenly it sprouts wings, flying like an eagle toward heaven.”
(Proverbs 23:4-5 ESV)
It is better to start small and learn. Money quickly earned is also quickly lost.
Patience and humility are qualities that will help you.
3. Use your mind by reading, researching, and gaining knowledge on anything you are interested in so you can invest with wisdom. Far too many novice investors make guesses, take foolish risks, or follow advice from a friend that only tells you of all their success!
“By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures.” (Proverbs 24:3-4 NIV)
4. Don’t try to time the market or predict the future.
No man knows what tomorrow will bring, so regardless of what all the get-rich-quick books may tell you, it is not a good idea to attempt to invest based on what someone has convinced you will happen to a stock, or gold or real estate or any other opportunity! Invest based upon your conviction that you believe the investment will perform well over time and you are willing to be patient even if it goes up and down in value.
Understanding Inflation and Deflation
Think of a balloon. Inflation causes it to expand. Deflation causes it to contract.
The consumer price index (CPI) is the most common measure of inflation and is reported monthly by the Bureau of Labor Statistics. It averages a set basket of U.S. goods and services that includes 8 major groups: housing, food and beverages, medical care, recreation, apparel, transportation, education and communication, and others. When aggregate prices rise, the purchasing power of a dollar declines and vice versa. Central banks attempt to keep a balanced economy by conducting monetary policy which includes the setting of interest rates. However, the dollar can be impacted by things beyond our control.
Inflation:
Hyperinflation:
Deflation:
Remember to Diversify
Always remember Solomon’s advice to investors: diversify! Solomon advised diversity in Ecclesiastes 11:2, saying, “Give a portion to seven, or even to eight, for you know not what disaster may happen on earth.”
Inflation hurts fixed-income investments like treasury notes and bonds. Stocks and real estate, though not risk-proof, offer returns that are not directly negated by inflation. Treasury Inflation-Protected Securities (TIPS) are low-risk investments that have a fixed interest rate. They are tied to the CPI so inflation will not wipe out their value. However, interest rates are very low. Investing in mutual funds or exchange-traded funds is another way to diversify.
Lisa Smith at Investopedia says:
Inflation hedges include growth stocks, gold, and other commodities, and–for income-oriented investors–foreign bonds and Treasury Inflation-Protected Securities. Deflation hedges include investment-grade bonds, defensive stocks (those of consumer goods companies), dividend-paying stocks, and cash.
For a look at the past ten years, go to Diversification: The Only Free Lunch in Investing at Sound Mind Investing.
Keep an Eternal Perspective
Adequate emergency funds and liquidity are important in a volatile environment, which experts are forecasting over the coming weeks and months. Certainly, the election is likely to cause market swings in either direction.
Your dependence should ultimately lie in Christ. Do not trust in your assets, investments, or net worth. They are temporary and we are to keep an eternal perspective. We steward our finances to the best of our ability but do not put our hope in them. King David said: “Some trust in chariots and some in horses, but we trust in the name of the Lord our God.” (Psalm 20:7 ESV)
I hope these principles will guide you and help you as you get started.
Originally published by the Christian Post, October 9, 2020.
Dear Chuck,
My wife is urging me to retire. I am not ready yet and do not know if I ever will be. I enjoy working. However, what do you think are the best financial moves to be ready?
Prepping for Retirement
Dear Prepping for Retirement,
This year has caused many people to consider retirement. There are several factors to consider which I address below.
From the way you stated your question, I think it would be wise to discuss this and pray with your wife to be sure you are united about the issue of if and when you should retire. There is great strength in being united with your wife. She will have insights and intuition that will help clarify your decisions and plans.
Transitional Options
Unless you are offered an exceptional retirement package, I suggest you ease into this new chapter by cutting back on your hours slowly. If you like your current employer, explore the possibility of consulting or work part-time. Crown’s CFO took this step by taking off every Friday as a transitional move.
The extra income, as well as staying mentally and socially active are benefits of this approach. Perhaps there is an opportunity for you to work somewhere completely different that can involve more time with your wife and family. I recently met a gentleman who retired from a successful career in the insurance business and opened a real estate office with his wife in an area where they wanted to live out their retirement. They are an incredible duo working wholeheartedly in their 70’s because they love serving people.
Working Longer is a Trend
In her article, Why Are People Working Longer? It’s Not What You Think, Kerry Hannon observes:
“Although the popular press and financial advisory firms would have us believe that fiscal insecurity is driving the trend, for those fortunate enough to have a choice and to be in good health it’s job satisfaction, having a sense of purpose, finding meaning in the work; using knowledge, skills, abilities and experience acquired over many years; helping others, making a difference; mentoring younger workers; enjoying their colleagues, clients, patients, or students. In short, they tell me that they love what they do. And, it’s older women even more than older men who are powering the extended work life, or EWL, phenomenon.”
Financial Considerations
Pick your Best Housing Option
Many retirees want a place free of snow and ice in the winter or extreme heat in the summer. Maybe they want a second home for some rental income or a place that will entice friends and family to come visit. Be cautious. Real estate is tricky. It can appreciate in value over time and potentially generate income through rentals, or it can be a money pit. Before buying a second home, consider taxes, insurance, HOA fees, maintenance, utilities, management fees if renting it out, and travel expenses. Know the tax ramifications of renting and selling. Consider it an asset, not an investment. I do not recommend timeshares.
Repurpose
The knowledge, experience, and wisdom elders accumulate over a lifetime can be shared with the younger generation. The Bible emphasizes helping the younger generation to grow in faith, to live godly lives, and to strengthen the family unit.
Think about getting involved in missions, discipling others, learning and sharing skills to help your children or grandchildren thrive in their businesses, or volunteering with an organization to help the poor in your community.
Leave a Legacy
Seek this next chapter of your to be your most fruitful for God’s kingdom. Paul said, “For to me to live is Christ, and to die is gain. If I am to live in the flesh, that means fruitful labor for me. Yet which I shall choose I cannot tell. I am hard pressed between the two. My desire is to depart and be with Christ, for that is far better. But to remain in the flesh is more necessary on your account.” (Philippians 1:21-24 ESV)
Write a brief autobiography for your family that includes your testimony, favorite Scripture passages, things that molded your character, and hopes for the readers. This could be a lasting blessing to generations that follow you. My grandfather left us only his journal which included many insights from his daily Bible reading. It has impacted far more than a financial inheritance would have.
Originally published by the Christian Post, October 2, 2020.
Dear Chuck,
I had high hopes of making financial progress while working from home since March. I have a good job, a stable marriage, and good friends. Unfortunately, my wife and I blew through money and took on some consumer debt. We need a financial reset. What is step one?
Financially Stuck
Dear Financially Stuck,
The Coronavirus has impacted everybody in a variety of ways. For many, it has been a time to decrease spending and increase savings. For others, they feel as if they are going backward.
Certainly having a good job, a stable marriage, and good friends can be counted among your blessings. Let me give you step one and a few more to help you get unstuck.
Become a Faithful Steward
When we see ourselves with a proper identity as God’s steward, we begin to think and act differently with money. God is the owner and we are his temporary managers. Our true riches are not on Earth. Our goal is not financial success, but to be found faithful to our Provider.
Becoming a faithful steward takes practice. Lots of practice! Think about toddlers. They learn to walk by taking one step at a time. They fall a lot, but pull themselves up and try again. They get to where they want to go with determination and the encouragement of others.
It is not unusual for people to spend more money than they wish during stressful times. However, research verifies that people who carry debt have higher rates of depression and anxiety than those who are debt-free. A recent survey showed that 42% reported debt as a source of high or moderate anxiety.
If you’ve developed some bad financial habits since the Coronavirus hit, don’t beat yourself up. Instead, I want you to practice becoming a faithful steward. Set goals, break bad habits, and adopt new ones in order to get your finances in order.
Step One: Gain Control Over Your Spending
The first thing to do is to get impulse spending under control. Cancel any buy-now-pay-later accounts and remove your credit card from online shopping websites. Learn what your spending triggers are. Is it hunger, stress, boredom, or fear-of-missing-out (FOMO)? Notice what motivates your spending. Identify patterns. Look back over your credit card and bank statements. When, where, and why did you make impulsive purchases? Take note and avoid these situations as you move forward.
Unsubscribe from emails that tempt you to spend money. Don’t browse online. Instead, go for a walk, read a book, or clean a closet and donate things you don’t need.
If you do shop online, save items you want, then let a day or week go by before making the purchase. During this time, you can gain clarity to determine if items are true “needs” or if they are simply “wants.”
Step Two: Create Financial Margin
Create some financial margin to avoid going further into debt. Automate your savings so you have less to spend. Any extra income that comes your way should have a destination: giving, saving, paying down debt. Once you finish paying off one debt, then apply that money towards another one with the goal of eventually saving or invest those payments.
If you have a mortgage, this is a great time to consider refinancing. Check current rates at Bankrate.com then find a reputable lender (or two) to determine closing costs and overall savings. Check out our mortgage refinance calculator. An extra payment each year will knock years off the length of your loan and save thousands of dollars in interest. If a lump sum payment is not doable, divide the payment over 12 months. Another option is to round your payments up to the nearest hundred dollars.
Find a mentor to hold you accountable to your goals and ask your friends to join your quest to handle money wisely.
Market Watch published an interesting article by Richard Quinn. In 10 Easy Ways to Save $870,000, he demonstrates how wise money management over a 40-year period can produce great rewards. It is clear that the power of self-control, a fruit of the Spirit, impacts one’s bank account. It is a valuable read.
Step Three: Be Patient
Learn to be faithful with a few things so you are prepared to handle much! Move forward with patience knowing that setting goals and adopting healthy habits will pay off. It’s a promise from God.
Proverbs 21:5 says, “Steady plodding brings prosperity; hasty speculation brings poverty.”
Cling to that. It will give you hope and peace so you can rest in Christ.
Get Resources
Crown has lots of great resources like free budgeting tools, calculators, and great programs to help you get on track and stay on track. I recommend our Money Dates program so that you and your wife can get unified when it comes to your goals.
Thanks for writing. I know you can get unstuck if you will put these steps into practice.
Originally published by the Christian Post, September 25, 2020.
Dear Chuck,
We recently had a family member hospitalized with COVID-19. It has made us acutely aware of the need for a will. Do you have any advice?
Getting Our House in Order
Dear Getting Our House in Order,
This is a good idea whether we have the threat of COVID-19 or not. I like to say that we all have a will: either one the government has for you, or one that you create by planning for the affairs of your estate. It is best to avoid the government’s will for you!
Interestingly enough, Ann and I met with our attorney this week to update our estate plans. We were long overdue. Some of the decisions were easy to make; others required some counsel and prayer.
One of the reasons we desired to get ours done is because we have seen the emotional pain and hardship placed on survivors who have to settle affairs that were not kept current. A will is simply a legal document that declares your wishes regarding the distribution of your property and the care of minor children. But in today’s world, you actually need more legal documents to accompany your will that we will explain further below.
Reasons people do not have a will:
Our attorney emailed documents for us to work through. After a week of doing our homework, we met with him on our front porch where he answered questions and gave advice. It was a painless, thought-provoking assignment that we hope will bless our survivors.
We know the pain family members experience when the deceased fail to leave adequate paperwork or directives. We have also heard horror stories of greed and fighting among beneficiaries in the absence of clear directions. We hope our lives impact our children far more than our things, but we also wanted to make our wishes very clear and to bless them with an inheritance.
We had eleven pages to complete. These included a brief description and value of assets, life insurance policies, debts and liabilities, distribution of property, personal representatives, trustees and guardians, powers of attorney, living wills and advanced healthcare directives, and other planning considerations.
Advanced directives (or advanced healthcare directives) stipulate one’s desires for end-of-life care and what they want should they be unable to communicate at some point. We felt like this was one of the most important questions to answer in our will. It removed the pressure of having to make emotional decisions from each other and our loved ones. We also signed HIPAA release forms necessary to get medical records that legally protect a patient’s privacy.
One of the considerations we needed to address was how to structure the inheritance for our grandchildren, and at what age and dollar amount our sons receive their portion. Divorce in married children, remarriage, and/or blended families require much more thought.
We no longer have minor children but a capable guardian was an important decision we made in our first will. In our updated will we named our executor and trustee, which is the surviving spouse as well as two backups should we both die at the same time. The executor is usually temporary. They get the will probated and assets distributed according to plan. The trustee is typically a longer-term role for more complex, enduring estates that involve long-term asset management.
It is important to keep the document safe and accessible. Avoid storing it in a bank safety deposit box or where a court order is needed to gain access. A home safe that is waterproof and fireproof is adequate. Your executor should know the location and code for entry as well as your attorney.
Review your will every few years and revise it at major life events that include marriage, divorce, births, deaths, and any significant changes of assets.
Other Considerations For Your Will
Consider leaving an “Emotional Will.” This is a short document that expresses your love and affirmation towards those who are named in your will. This is becoming a common practice in Asia. For many heirs, it is far more impactful and priceless to them than the things or money they receive.
We have seen a number of creative things required of heirs that are intended to either bless or prepare those receiving funds. These have included:
Personal items could include a letter to the beneficiaries with the Gospel, Bibles, testimonies, legacy of faith, or a charge for the family to carry on the good name that has been established.
The Inheritance of Believers
Paul explains carefully that we are all heirs in Christ Jesus. Remember, whether you have many or few earthly possessions to pass on to your loved ones, they, too, need to be found in Christ.
In him we have obtained an inheritance, having been predestined according to the purpose of him who works all things according to the counsel of his will, so that we who were the first to hope in Christ might be to the praise of his glory. In him you also, when you heard the word of truth, the gospel of your salvation, and believed in him, were sealed with the promised Holy Spirit, who is the guarantee of our inheritance until we acquire possession of it, to the praise of his glory. (Ephesians 1: 11-14 ESV)
Also, while the Bible does commend the righteous man for leaving an inheritance for his children’s children, it does not specify that the inheritance involved money. A life filled with loving memories, shared experiences, grace, mercy, and a Godly example are of greater value than all the tangible assets that you will leave behind.
I hope this helps you get moving on a will and that God will protect you from this virus. Crown has a number of resources that may be helpful to you. Consider our “Planning Your Legacy – Will and Trust Guide” to help you get started.
This article was originally published on The Christian Post, September 18, 2020.
Dear Chuck,
Can you explain the concept of Universal Basic Income? It seems more like a Robin Hood plan than good economics.
Concerned Taxpayer
Dear Concerned Taxpayer,
Universal Basic Income (UBI), known by many other names, is defined by its most ardent supporters like this: “It is a regular income paid to everyone without any conditions. Everyone would automatically receive a regular income paid into their bank accounts.”
Regular income. Everyone. No conditions. There is no need to work, meet qualifying standards, or experience scrutiny to get paid. Everyone would qualify for universal basic income whether needed or not.
So to your concern, it is not a Robin Hood plan in the sense that it takes from the rich (via taxes) to give to the poor. It is worse. The idea is to tax the rich and print fiat money to have enough to distribute it to everyone.
Proponents (many holding to a dystopian view coming from the Silicon Valley) believe UBI:
Andrew Yang hung his Democratic Presidential bid on this as a central promise of his campaign; if elected, everyone would receive $1,000 per month. He called it the Freedom Dividend. He is not alone. Former President Barack Obama, Richard Branson, Mark Zuckerberg, and even Pope Francis have endorsed the idea as a winning plan to bring economic fairness and mutual benefit to the world. Interestingly, my name appeared in a Polish blogger’s article earlier this year using me as a known evangelical opposed to UBI which the Pope supports. (He referred to me, and those like me, as hypocrites for not caring about other people’s welfare.)
Proponents believe that a combination of taxes and “sovereign money” will cover the expense. Sovereign money is the code word for printing money by nations that issue their own currency. This takes us into the Modern Monetary Theory (MMT), sometimes called the Monopoly Money Theory or Magic Money Theory, which states that currency issuers can print unlimited amounts of money as needed without concern for taxes or deficits. Essentially, you have to swallow the MMT pill before you can swallow the UBI pill. Taken together, they present a toxic threat to the economic health of any nation.
Income without work is similar to holding a lottery and declaring everyone the winner. The pot is divided equally among the citizens. The one big difference? Nobody has to purchase a ticket to win. A history of lottery winners proves Proverbs 13:11 true: “Wealth gained hastily will dwindle, but whoever gathers it little by little will increase it.” Is there any real gain with UBI?
The dystopian view that technology will eliminate millions of jobs thereby creating social unrest is unfounded. For every technological advancement, there is an offsetting demand for new education, new job skills and new problems to be solved by entrepreneurs. Proponents of UBI, however, view man as simply a consumer who will need to be appeased while out of work, versus a creative, capable producer who can add value to any enterprise.
Apart from the inefficiency or potential for corruption, empowering the government over a source of my income, however small or large, is dangerous and fraught with political and economic risks.
God created man to work and provide for his needs. This gives meaning to our lives as well as deep satisfaction for earned achievement. UBI removes both of these benefits.
Now we command you, brothers, in the name of our Lord Jesus Christ, that you keep away from any brother who is walking in idleness and not in accord with the tradition that you received from us. For you yourselves know how you ought to imitate us, because we were not idle when we were with you, nor did we eat anyone’s bread without paying for it, but with toil and labor we worked night and day, that we might not be a burden to any of you. It was not because we do not have that right, but to give you in ourselves an example to imitate. For even when we were with you, we would give you this command: If anyone is not willing to work, let him not eat. For we hear that some among you walk in idleness, not busy at work, but busybodies. Now such persons we command and encourage in the Lord Jesus Christ to do their work quietly and to earn their own living. (2 Thessalonians 3:6-12 ESV)
I prefer to derive my income from work and to give charitable support to those who are unable to work. This is the way God designed us to flourish. He did not put man in a garden to simply eat from it, but rather to work and manage it.
This article was originally published on The Christian Post, September 11, 2020.
