Change (Part Two)

grip golfI have been teaching my son to golf over the past few years. Unfortunately he inherited his dad’s aversion to authority so taking direction hasn’t always gone well. Despite the people that want to help him get better, he pushes back. As we have noted, change is hard.

One reason he pushes back: It doesn’t feel right.

The vast majority of golf teachers in the world will tell you that you need to hold the club in your fingers (not palms) with the “V” of your index finger and thumb pointing at your right shoulder. Often Zeke’s grip will get too “weak”, with the “V” pointing at his chin or left shoulder instead of right shoulder.  This is a critical fundamental to hitting the shots he wants to hit, so I’ll reposition his hands on the club and say “Try it this way”.

But he hates it. He says it doesn’t feel comfortable. He won’t be able to hit the ball the way he’s practiced. After I’ve placed his hands on the club the correct way he even re-grips it back to the old way right before he swings.

Of course he’s right. It doesn’t feel natural. It doesn’t feel comfortable. He legitimately doesn’t like it.

But a good golf teaching professional will tell you “what you feel isn’t real”. If you will stick with the change and hit a couple hundred golf balls, the new grip will become your “normal” grip and anything else will start to feel weird. It will become your new normal fundamental.

I don’t need to make the applications to life for you, but I just want to encourage you. If you’re struggling with an area of change – especially around your personal finances – stick with it. It won’t feel comfortable. That’s ok. Trust the process. Hit a couple hundred balls and you’ll look back and not recognize that old crappy golfer.

CHANGE

ODM Logo“Will” has been homeless since he was 12 years old. In the last couple of years he’s made tremendous progress including doing really well at his job. Contrary to what you might assume, housing is usually one of the last pieces of integrating into what you might consider ‘normal’ life. For example, Will got an apartment earlier this year but has continued to sleep outside – Urban Camping – because he feels claustrophobic in the apartment and it’s such a departure and separation from his community and life as he has known it for so long.

That story was told to me last week while visiting Open Door Ministries where I serve on the board. For someone that’s integrated into mainstream society, this story seems impossible to believe. But as I thought about it, I realized how hard I really struggle to make personal change. I’m the same as Will. The reality is, the areas of my life that I’m working on are just less visible and more socially acceptable.

Despite practicing financially healthy habits for years, doing a monthly budget remains one of the biggest challenges for Noelle and me. We have tried any number of different methods, but the busyness of life and lack of urgency causes us to miss self-imposed disciplines that would lead to a healthier life.

Regardless if it’s doing a monthly budget or sleeping under a bridge, change is hard. It takes a tremendous effort to break life-long habits. Let’s do it anyway.

Student Loans in the News

USA TodayAs I was traveling a couple weeks ago, I picked up the March 29th edition of USA TODAY. In the Money section Peter Dunn had written an article specifically addressing adult children still living with their parents. But what really caught my attention was the following paragraphs on student loans:

I’ve come to the conclusion that asking 18-year-olds to commit to tens of thousands of dollars of debt, without a job, income or assets, is among the stupidest thing modern society does. When you have no concept of money, what’s the difference between borrowing $20,000 or $50,000? You certainly know there’s a difference now, but you didn’t when you were 18.

Student loans can convince you that money doesn’t matter. Debts tend to do that. You get the benefit of the purchase without having paid for it. Obviously, this idea isn’t limited to student loans.

His line “You get the benefit of the purchase”  popped into my mind when I read this article today:

Forbes: The Scary Truth About Millennials and Student Loan Debt

The opening line of that article reiterates a similar idea – “out of sight, out of mind”. One of the most important things financial counselors like myself can do is bring people into an awareness of their current situation.

Serious Issues require serious solutions

Hot DogsThis might be the nerdiest thing I’ve ever said, but….I had a dream last night about how we’re teaching personal finance. Aside from how Ridiculous that is, I woke up with a very clear impression. Here is the dream and impression:

I had a dream about a prep-style rally encouraging students to save money and knock out debt. It culminated with a white middle age lady in a pant suit going into a freestyle rap on the importance of fiscal prudence.

I’m sure that scene bubbled up from the recesses of my subconscious as a result of this article I read a couple weeks ago in which Indiana University representatives will at random times jump on a bus (painted with a caricature of a pig swinging on a wrecking ball a la Miley Cyrus) and hand out gift cards as rewards for correct answers to personal finance questions.

Here is (in my opinion) the problem with the strategy that Indiana University’s and other institutions who try to address financial issues with frivolity and merriment. Financial issues aren’t a light matter. While we can use humor to bring humanity to serious matters, the solutions aren’t any lighter than the core issues. This is my favorite clip of 2015. A hot dog eating contest is the perfect stage for outrageousness, but I fear that if you try to draw people into a heavy issue with a light hearted entree, they won’t stick.

I understand this makes me sound incredibly boring and old – believe me when I tell you nobody loves irreverent humor more than I do. But from my experience working in financial services for 15 years: You want your financial planner to take your money seriously. Your Realtor can wear flip flops (looking at houses is fun), but you want your mortgage banker to wear a blazer. I want my CPA to be so introverted he gets nervous looking at my shoes when we talk.

We respect ourselves more when we make respectable decisions. I want to be the type of person who takes my financial future seriously. Serious problems require serious solutions.

MONEY: SIX VIEWS OF WEALTH

Walking through 1 Timothy 6   Dollar sign

Money is a complex subject – by some accounts about 15% of the Bible, or 2,350 verses, address the topic. There is also a crap-ton of books written on the subject (many of which are in my office, and you’re welcome to borrow). One of the most important passages on money in all of scripture is I Timothy 6, Paul’s seminal letter to his protégé. In this chapter, Paul addresses six categories of people or worldviews, from those stuck in permanent slavery to those rich in this world. A walk through this chapter will acquaint us with how it has shaped contemporary beliefs and misconceptions on money throughout history. Let’s begin.

NO HOPE OF WEALTH

1 All who are under the yoke of slavery should consider their masters worthy of full respect, so that God’s name and our teaching may not be slandered. 2 Those who have believing masters should not show them disrespect just because they are fellow believers. Instead, they should serve them even better because their masters are dear to them as fellow believers and are devoted to the welfare of their slaves. These are the things you are to teach and insist on.

Paul first addresses those on this earth who have no hope of ever attaining any amount of temporal wealth (v 1-2). You and I have grown up in a world that allows upward mobility, but it’s worth noting that for most of human history this hasn’t been the case. If you were born into the home of a servant, for example, that was your lot in life. Paul begins his treaty on money by addressing those who have no hope of temporal wealth; those crushed by the ‘yoke of slavery’. Paul admonishes them to treat their master with respect – not because the master deserves it but because we do everything in our power to honor God. Even if your master is your spiritual equal – your ‘brother’ – Paul teaches us to ‘serve them even better’.

In America we have a social structure that gives the illusion of full equality through legal access to citizens’ rights, but we slip into a social hierarchy that is based on personal wealth or positional power. In this reality, those who have more money are higher up the social ladder. Paul doesn’t address the morality of the social structure here – he just speaks directly to those in it. Currently there is a lot of resentment toward wealthy people, wealthy employers and corporations, the 1 percent, and strong opinion regarding what should be done about the imbalance of wealth. It may be helpful for us to remember that as we encounter those who have more wealth than us to “not show less respect….Instead serve them even better.” We do this so that God’s name may not be slandered.

HEALTH AND WEALTH GOSPEL

3 If anyone teaches otherwise and does not agree to the sound instruction of our Lord Jesus Christ and to godly teaching, 4 they are conceited and understand nothing. They have an unhealthy interest in controversies and quarrels about words that result in envy, strife, malicious talk, evil suspicions 5 and constant friction between people of corrupt mind, who have been robbed of the truth and who think that godliness is a means to financial gain.

In verses three through five, Paul directly address those who believe that “godliness is a means to financial gain.” What is the core of this belief? Pride (v4). What does this world view create? Controversies and quarrels resulting in envy, strife, and constant friction.

There is confusion on this subject because if you follow the principles of the Kingdom, you often will succeed in a worldly sense. If you ‘serve your employer even better’, as Paul urges in the previous verse, your employer will often promote you to greater responsibilities. If you ‘do unto your customers as you’d have done unto you’, you will likely gain more customers. This is natural law.

So what is Paul cautioning against? Attitude. The attitude that seeks first financial gain and tries to use godliness as the route to that end. This is what Jesus explained when he said you cannot serve both God and money. You will love the one and hate the other or vice versa. Instead, Jesus teaches to seek first the Kingdom of God and everything else will be added unto you.

TRUE WEALTH

6 But godliness with contentment is great gain. 7 For we brought nothing into the world, and we can take nothing out of it. 8 But if we have food and clothing, we will be content with that.

Contentment. This is the truest form of wealth. No amount of wealth is enough without contentment. You’ve no doubt heard the quote from Andrew Carnegie on how much wealth is enough: Just a little bit more.

The reality is that our circumstances are continually changing and are often out of our control. If we learn contentment, we will always be happy. Paul of course addressed this in Philippians; “I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.”

In this letter to Timothy, Paul comes short of being content in EVERY SITUATION – instead telling Timothy in verse 8 “when I’m cold and hungry I get a little cranky”. Perhaps he hadn’t fully learned the secret yet. I guess we are all a work in progress.

PEOPLE WHO WANT WORLDLY WEALTH

9 Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction. 10 For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.

Whoever loves money never has money enough” – Solomon

The next section of 1 Timothy 6 contains one of the 10 most well-known and misquoted verses in the entire Bible: Money is the root of all evil.

Who is Paul addressing in verses 9 and 10? Those “who want to get rich” or are “eager for money”.

The key words here all address matters of heart. As Jesus taught, God looks at the condition of the heart. “They that will to be rich”, “coveted after” and have a “love of money” all exhibit a condition of the heart that can be held by both the material rich and the poor.

The old school King James Version has some awesome language in these two verses:

But they that will be rich fall into temptation and a snare, and [into] many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

The word “perdition” is a fantastic one and it’s a major bummer it’s not part of our lexicon today. It “denotes the final state of ruin and punishment”.

And the KJV finishes with an incredible word picture – those who pursue worldly wealth ultimately pierce themselves through with many sorrows. This is what a life dedicated to making money looks like. It sucks. If you’ve met an   elderly person who has pursued this lifestyle, you may have instantly recognized the bitterness they have – realizing that they are going to die and can take nothing with them. Solomon penned his frustrations on this saying “I hated all the things I had toiled for because I must leave them to the one who comes after me.” The piercing sorrow of bitterness and regret.

PURSUE SPIRITUAL WEALTH

11 But you, man of God, flee from all this, and pursue righteousness, godliness, faith, love, endurance and gentleness. 12 Fight the good fight of the faith. Take hold of the eternal life to which you were called when you made your good confession in the presence of many witnesses. 13 In the sight of God, who gives life to everything, and of Christ Jesus, who while testifying before Pontius Pilate made the good confession, I charge you 14 to keep this command without spot or blame until the appearing of our Lord Jesus Christ.

“Flee…and Pursue….” Paul commends his protégé, “But you are a Man of God and you’re going to go a different path than the road of perdition!” True wealth isn’t defined by what we HAVE (which rust and thieves can destroy), but who we ARE; our character. Paul tells Timothy to BECOME a person defined by ‘righteousness, godliness, faith, love, endurance and gentleness.’ These fruits of the spirit are what define a successful person. To these Paul says “I charge you”.

THOSE WHO ARE WORLDLY WEATHLY

17 Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. 18 Command them to do good, to be rich in good deeds, and to be generous and willing to share. 19 In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.

Paul wraps his treaty on money in verses 17 through 19 by addressing those who “are rich in this present world”. A teacher once explained that there are two main things to remember with a biblical world view of money:

–              Money doesn’t BELONG to me

–              Money doesn’t DEFINE me

Those are both identity issues. A follower of Christ is to identify their value as an Imago Dei (someone made in the image of God) and as a disciple of Christ by practice, not by possessions. Paul addresses our propensity to attach our identity to our wealth immediately: Don’t be arrogant (prideful) or put your hope in wealth, which is so uncertain.

In 2009, one of the richest people in the world, German billionaire Adolf Merckle, jumped in front of a train, killing himself because massive financial losses had lowered his net worth DOWN to around 9 billion dollars. When you put your pride and value in your wealth, then losing your money – which many have done – results in losing your value.

Paul is really addressing most of us in this section. By worldwide standards, we are extremely rich in this present world. Paul has some direct advice on what to do with our money:

–              Do Good Works

–              Be Generous

–              Be willing to Communicate

–              Enjoy

The first two are common suggestions that we would give anyone who has a lot of money – do good stuff and be willing to share. Maybe that’s obvious, but it’s still difficult when it’s your money. The other two are interesting.

Wealth creates isolation. You can easily isolate yourself from the poor and those unlike you. If you want to take a trip to Italy or order a $100 bottle of wine at dinner, it’s just easier to do that if your friends can afford to do the same. You don’t have to feel guilty, or wonder if maybe you should pay for everyone, or worry about your friends wanting something from you. Paul’s solution to this isolation is translated ‘willing to share’ in the NIV, and ‘willing to communicate’ in the KJV. When you think of how ‘sharing’ applies to a wealthy person, you probably default to the idea of sharing money. But I believe this passage is pushing wealthy people to engage in dialog and willingness; to be used by people, to answer awkward questions, to share stories and struggles. Communication breaks down isolation.

Larry Burkett used to say the difference between hoarding and saving was attitude. It’s hard to emphasize the importance of the end of verse 17 – God richly provides us with everything for our enjoyment. The attitude that everything belongs to God and he gives us “everything for our enjoyment” is the key to really enjoying money without guilt. Ecclesiastes 5:19 says “when God gives any man wealth and possessions, and enables him to enjoy them, to accept his lot and be happy in his work-this is a gift from God.” Learning to enjoy wealth as a fabulous gift from our heavenly father is a spiritual skill that we must nurture and develop so we can honor God in all that we do.

Solomon’s Guide to Investing

money treeWhat are the keys to being a successful investor? Though in this space we often focus on debt, I stumbled across these investing principles that are too valuable to miss. I’ve read many, many investing and personal finance books, so when I came across Ecclesiastes 11:1-6 last night in my reading the passage opened up like a cliff notes of recognizable, key financial concepts. Here they are:

  1. GIVE and SOW First

Verse 1: “Cast your bread upon the waters, for after many days you will find it again.”

I just finished reading “The Blessed Life”, and it impacted me in some major ways. The principle of ‘first-fruits’ is interlaced throughout the scriptures. The idea of sowing BEFORE you know the result of the harvest is critical. The concept of ‘first-fruits’ says that you give the first part of the harvest BEFORE you know the full bounty of the harvest. Additionally, in the Hebrew law it says you are to consecrate the firstborn (Ex 13:2) BEFORE you know how many total children you’ll have. We also see this in Jesus when God GAVE his firstborn (John 3:16) before we could respond. That’s the power of Romans 5 “But God demonstrates his own love for us in this: While we were still sinners, Christ died for us”.

In secular financial arenas there is a principle called “Pay Yourself First”. That is, if your financial security and saving money are your biggest financial priorities, you have to set aside money BEFORE you pay your bills, spend elsewhere, etc. This is a principle taken straight from scripture with the beneficiary switched. The scriptures teach that rather than our own security, we are commanded to seek FIRST the kingdom of God and all other things will be added unto us.

The commentaries on “casting your bread upon the waters” give a couple of helpful hints at connecting and applying this scripture:

  • “Bread” represents that which is necessary for life.
  • You have to release it yourself. Nobody can do it for you. In doing so it changes your heart and motivations. This is represented as a calculated decision.
  • The “upon the waters” indicates a flowing river or open ocean – meaning it needs to be cast under the assumption it isn’t ever coming back. Your motivation for giving cannot be to receive.
  • When you give or sow, you ‘lend to God’ (Proverbs 19:17) and God will reward you. “Whoever is kind to the poor lends to the LORD, and he will reward them for what they have done.” That’s why “The generous will prosper; those who refresh others will themselves be refreshed” (Proverbs 11:25). Even though this is true, reward shouldn’t be our motivation. Jesus taught his disciples to lend without expectation of return (Luke 6:35).

It doesn’t matter how much you sow (two mites is a start), but the principle here is that you can’t stand in a field waiting for a harvest before you start giving and sowing. Put first things first. I think it’s critical that this is the first verse in this passage.

  1. DIVERSIFY

Verse 2: “Give portions to seven, yes to eight, for you do not know what disaster may come upon the land.”

This financial principle has been widely accepted as the only way to weather the ups and downs of the financial markets. Four times throughout these six verses the phrase “for you do not know” is used. Diversification acknowledges that unknown market conditions will cause some business sectors (agriculture, commodities, small businesses, real estate, etc.) or geographic sectors to thrive or struggle.

  1. IT IS WHAT IT IS

Verse 3: “If clouds are full of water, they pour rain upon the earth. Whether a tree falls to the south or to the north, in the place where it falls, there it will lie.”

A successful investor realizes that bad things happen. They are a part of life. As Forrest Gump acknowledged when it was pointed out that he had stepped into poop, “It Happens”. In fact, despite our greatest efforts of engineering it, life itself is uncertain.

The reality is that all successful people and investors have had failures. Human nature (often inflated by social media) causes a lot of pretending one way or the other – either people pretend they are failure proof and everything is fantastic all the time or others glorify their failures. A healthier perspective acknowledges the failure for what it is, gleans what can be learned from it, and doesn’t let it affect my intrinsic value as a person.

I have a close friend who owned over 20 rental homes. When the market collapsed in 2008 his bank called his note due, even though he had never missed a payment. He lost all of those houses in a two year long process as his bank went into receivership.

The reality is that failure (ours or others) is the number one teacher in life. We need to remove the stigma and realize that if a tree falls on your house, it is done. It can’t be undone any more than you can make the rain go back into a cloud. Accept it, and move on. That’s why the same author pointed out “for though the righteous fall seven times, they rise again, but the wicked stumble when calamity strikes”. As many others have pointed out, character is measured by the getting up, not the falling down. The friend I mentioned in the previous paragraph went on to start a small business and now, 5 years later, he has several locations, a couple dozen employees and several million dollars in gross revenue.

  1. DOLLAR COST AVERAGE

Verse 4: “Whoever watches the wind will not plant; whoever looks at the clouds will not reap.”

When people call in to discuss their financial problems with Dave Ramsey on the radio, they often comment that they are waiting to have kids until they can get on top of their financial problem. To Dave’s credit, I’ve never heard him endorse this. Instead, he points out this timeless truth: There is no perfect time for anything.

Inaction can be caused by fear or by laziness. Proverbs 22:13 says that a lazy man refuses to go outside because there is a lion or he might get murdered in the street. In a 24/7/365 news cycle there are often stories that use fear to drive viewership. But a prudent investor ignores the fear and panic of the day and uses a simple technique called “Dollar Cost Averaging”. Simply, if you invest at a steady pace over a long time, you’ll buy fewer investments when the prices are high and more when the prices are low. In doing so you’ll insulate yourself against some of the volatility that is inherent in any market. There is no perfect time for anything. As the old Chinese proverb says: The best time to plant a tree is twenty years ago. The second best time is now.

  1. NOBODY IS RIGHT ALL THE TIME

Verse 5: “As you do not know the path of the wind, or how the body is formed in a mother’s womb, so you cannot understand the work of God, the Maker of all things.”

In his book “MONEY Master the Game”, Tony Robbins interviews a dozen or so billionaires (that’s someone who has made a million dollars a 1000 times). One of Tony’s main takeaways is this: All of them quickly admit that they don’t know what’s going to happen in the future. In fact, they spend virtually all their time and intellectual energy NOT trying to predict markets and the future, but rather building a system or portfolio that can survive and profit from the greatest variety of fluctuations. As one interviewee stated, “Sometime in your lifetime your favorite investment (gold, real estate, stocks, etc) will go down in value by 50%”. It’s not if, but when.

The reality is there is a lot we don’t know or understand. This verse emphasizes twice that “you do not know” and “you cannot understand”. This needs to be built into any investor’s worldview from the beginning. This principle is emphasized at the end of verse 6 as well: You do not know which will succeed, whether this or that…

I’ve also heard a number of very successful entrepreneurs explain that all ideas have this in common: They seem great at the time. James Altucher, who has sold multiple businesses for 8 figures, has said and written many times that he started 6 or 7 business at the same time because he had no idea which of the ideas was any good. In fact, they all seemed great at the time. Verses 5 and 6 point out that we “do not know which will succeed”. This is a critical business principle.

  1. FINISH: CONTINUE TO WORK ALL THE WAY THROUGH HARVEST

Verse 6: “Sow your seed in the morning, and at evening let your hands not be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well.”

One commentary explained this verse as such: Do not be lazy; get up and be about your work. Also, do not quit half-way through the job. If the sowing in the morning happens not to take, then the sowing in the evening will. We must put out whatever effort is needed to succeed. We do the work, and it is God who prospers the effort.

Solomon explained it this way: The slacker is so lazy that he buries his hand in the bowl and he doesn’t even bring it back to his mouth. There is a season for every activity under heaven. Don’t quit early, work through the appointed time, and live with the results.

The world values success. God values process. The verse seems to indicate that if ‘both do equally well’ it isn’t because you were smarter, worked harder than your neighbor, were spiritually blessed or otherwise deserved success based on your merit. The point is to not “become weary in doing good”.

CONCLUSION

I believe the timeless truths of these investing principles will prevent you from ‘piercing yourself through with many sorrows’ and instead allow you to experience freedom from the anxiety and fear that often accompany investing.

Abundance vs. Scarcity

abundanceMany of us struggle with putting words around attitudes and ideas we bring into life. One concept that makes sense to me is having an attitude of ‘abundance vs. scarcity’. We all bring a variety of mental and emotional baggage to the world and a lot of us bring an attitude of scarcity.

The roots of this are many. Secular anthropologists or psychologists trace this back to more primitive times and say the roots of this are wired into our brains from generations of limited resources. There is true to this – the material abundance we see today in much of the developed world is unprecedented. But a student of the scriptures knows that out of the abundance of the heart the mouth speaks, and also as someone ‘thinketh in his heart so is he’, so we know that our actions are dictated by our thoughts which are dictated by the condition of our heart. Thus an attitude of scarcity is a condition of the heart or spirit.

The student of the scriptures also can trace this back to throughout human history and the scriptures to the very first two humans born on earth. Able had an attitude of abundance that changed his thinking which changed his very actions. “Able brought fat portions from some of the firstborn of his flock. The Lord looked with favor on Abel and his offering”. His brother went the other direction.

I see this in those that feel called to go to seminary, but don’t know how they are going to do it. I risk painting with too broad a brush, but one way I see this played out is in our attitudes towards debt. An attitude of scarcity says ‘there isn’t enough money’ or ‘I don’t have enough (money, resources, time, intelligence, etc.)’, or a defeatist attitude like “I’m going to have to take out a lot of debt”, “My family isn’t going to get any of my time”, or “I won’t be able to learn Hebrew”.

The truth is that “The blessing of the Lord brings wealth, and he adds no trouble to it.” You can go to seminary and do it in a way that doesn’t handicap you and your family financially for years to come. You can take a full load of classes and still be a great husband, wife or parent. You can work in a local church and be critical part of a vibrant local ministry while going to classes.

The tools and resources you need are available, but it begins with an attitude of abundance. My hope is that God will supply all my needs (time, talent and treasure) according to his goodness and glory in Christ Jesus, and so I take a step (evidence) toward what I hope for being certain of what I do not see.