Nov/Dec 2007

The New Man Guide to FINANCE

By Pat Hail, Jr.

For this first-ever section, we asked Christian financial experts for advice on how to be better money managers.

Principles of Christian Stewardship

How you use your resources directly influences your spiritual life.

Biblical stewardship is not just part of the Christian life. It is the Christian life. How you maintain and manage your time and resources will affect the depth of your spiritual life and could even determine how you will spend eternity.

In my work as an instructor, teaching Christians the principles of biblical stewardship, I have found that many of us are bound by personal debt.

Because of our poor money management we often forgo giving to the Lord's work, or we use saving for retirement as an excuse to neglect serving in the local church. I help believers learn how they can better manage their time, talents, tithes, temples (bodies) and talk. Stewardship is not merely a money issue; it is a heart issue as well.

A "steward" is someone who manages someone else's resources for the good of the one who owns them. As followers of Christ, we must live with the realization that the things we have actually belong to God. What exactly does biblical stewardship involve?

materialism. The cancer of consumerism that has infected our nation has spread to the church. Using biblical teaching, learn how to live a God-honoring lifestyle and teach your children about money. If you are caught in the grip of materialism, freeing yourself will require making a new commitment to handling God's resources with wisdom and care.

debt. Bad debt has dire consequences, and it requires adhering to practical biblical advice on the subject to turn it around. Your freedom starts with designing a budget plan and choosing to take the steps necessary to reach financial freedom.

investing. Knowing the ins and outs of investing requires some study. Learn first to prepare before you invest and to evaluate risk and return. It is important to invest in morally responsible ways. Many Christians are unwittingly invested in companies that profit from or support abortion, homosexuality, tobacco, gambling or pornography.

giving. I urge you to see the process of giving with an eternal perspective—go beyond giving the bare minimum and envision your resources as having eternal, rather than only material, value.

estate planning. Learn to see this too with an eternal perspective. It involves not only securing an inheritance for your children, but also helping to form a legacy that will pass on your Christian faith as well as your heirs' through the use of ongoing charitable giving.

How, then, do we become better stewards of our resources? First, we must begin with repentance. We must ask God to forgive us for treating the things that belong to Him as if they belong to us.

Second, we must commit ourselves to seeking His kingdom first. When we set our vision on the things of God, we can rest assured that God will supply for our needs.

Third, we must set our houses in order—eliminate materialism, debt and disobedience from our management of God's resources. Establish a budget, pay down credit cards, create an emergency fund and save for the future.

Finally, study what the Bible says about how we are to manage our time, talents, tithe, temple and talk. Imagine the godly impact we could have if we would be obedient with the resources God has entrusted to us.

Pat Hail Jr. is the executive director of Sola Scriptura Ministries Inc., which seeks to educate and disciple Christians in biblical stewardship. Visit him on the Web at biblicalstewardship.org.

5 Strategies for Managing Your Money
By Bob Barber

1. Plan your life purpose. This forms the foundation for all the other strategies. Before your money can be managed properly you must first identify the core values. These ideals steer your life. List what is really important to you. Start with things such as your relationship with Christ, your family's well-being, your health, the financial freedom to take a short-term missions trip, as well as professional goals. Create a personal mission statement based on these priorities. Then set one-, three-, five- and 10-year goals.

2. Get the proper advice. Finances can be as mystifying. If you're confused about how to handle taxes or estate planning, for example, don't feign competence and stumble ahead alone. Admit you need help. Talking to a professional is often crucial to your success. Look for someone you trust or someone recommended by a friend.

3. Plan your retirement. Most people don't want to work forever—nor should they (see Num. 8:25). To prepare for retirement, start with a projection strategy. Determine when you want to retire and how much you will need to live each year after you do. Factor in inflation and be realistic about your standard of living. Seek professional advice, too. Find a trustworthy financial adviser who can help you determine the best strategy for accumulating and allocating your assets as well as the most effective way to draw from your savings after you retire.

4. Manage your monthly cash flow. We all hope to have money left over at the end of the month. Often, though, we don't. To track and subsequently manage your cash flow, figure out exactly how much you have coming in and going out. Don't do this in your head. You'll inevitably miscalculate. Do it on paper or with a software program. Remember, the amount you bring home after taxes is what you must use to calculate your monthly budget.

5. Protect against and manage risk. When it comes to risk management, the key is to strike a balance. You cannot prepare for every possible contingency. But prudent planning can prevent the loss of money and assets that accompany many disasters. One of your most important tools is insurance. To fully protect your family look into acquiring all or some of these types of insurance—health, disability, long-term care, liability, life, homeowner's and auto.

Bob Barber is the CEO of Christian Investment Services (christianinvest mentservices.com).

Investing God's Way
By Howard Dayton

Did you know that today's opportunities for investing will be obsolete a couple of years from now? Whatever strategy you rely on today will have to be updated within a few years because of changes in the market. More important than knowing current investment strategies is understanding solid biblical investing principles. Why? Because they never change. You can apply these principles for a lifetime to your investment decisions. They will stay relevant, whether you are considering stocks, bonds or another investment option.

Allow Time for Investing

"Steady plodding brings prosperity; hasty speculation brings poverty" (Prov. 21:5, TLB). Many people lose money on gambling, risky investments and illegal pyramid schemes in hopes of striking it rich overnight. There's a better way. Proverbs 21:5 evokes the image of a person filling a large barrel one handful at a time. It's the same way with building wealth. Nothing replaces consistent, month-by-month investing. If you steadily invest $1,000 per year at 6 percent interest, for example, you'll have far more than $160,000 at the end of 40 years.

Don't be ashamed to seek advice

"Listen to counsel and receive instruction, that you may be wise in your latter days" (Prov. 19:20, NKJV). We all have limited knowledge and experience. Don't let ignorance jeopardize your hard-earned money. Look for a financial adviser who understands what the Bible says about money. If you don't know such a person, Kingdom Advisors can help (kingdomad visors.org). If you're married, get input from your wife. Many times the Lord communicates most clearly to a man through his wife.

Select a diversity of investments

"Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth" (Eccl. 11:2, NASB). There's no foolproof way to determine which investment will be a winner during the next 10 years. You could be at risk if you put all your investment dollars into one company's stock. Ways to diversify your portfolio include mutual funds, precious metals, bonds, real estate and certificates of deposit.

Guard against the desire to be rich

"But those who desire to get rich fall into temptation and a snare, and into many foolish and harmful lusts" (1 Tim. 6:9, NKJV). Why is merely wanting to become rich an incredibly dangerous desire? First Timothy 6:10 answers the question: "For the love of money is a root of all kinds of evil." When you want to get rich, you actually love money. God wants instead to give you a desire to be a faithful steward and wise investor of what He has entrusted to you. He can change your motives so that all you want is to please Him.

Balance your investing with giving

"He who has a generous eye will be blessed, for he gives of his bread to the poor" (Prov. 22:9). Jesus told a parable about a "rich fool"—a prosperous man who failed to give and kept everything for himself instead (see Luke 12:20). Jesus called this man foolish because he saved everything. He didn't balance saving with generous giving.

If you only pile up your investments, your affection will be drawn from God to them because "where your treasure is, there your heart will be also" (Matt. 6:21). If you give generously to God, you can invest your resources and still love Him with all of your heart.

Howard Dayton is the co-founder of Crown Financial Ministries, based in Gainesville, Georgia (crown.org) and author of Your Money Map (Moody).

Benefits of Budgeting
By Tyler Buckley

A budget is a plan for how you will spend and save your money. It involves tracking your monthly income and allotting the proper amount of money for the monthly expenses you anticipate—and the ones you can't see coming. There are many ways to create a household budget. You can use software such as Excel or Quicken or a manual paper-ledger system. Most important is developing a budget and using it consistently. Here are four benefits of budgeting:

It promotes financial well-being. Budgets serve as financial frameworks that rein in our bad spending habits. Spending more than we make or buying impulsively gets us into trouble. By staying within the framework that a budget provides you're more likely to sidestep the many land mines that come with financial difficulties.

It eliminates the unknown. When your financial house in not in order, you're likely to be plagued by uncertainty and worry. Having a budget is liberating. It makes you aware of your financial situation and effectively eliminates most, if not all, the anxiety. Having a budget allows you to set aside money each month for major unplanned expenses such as car and house repairs. With some money saved for emergencies, you are reassured that even when unexpected expenses arise you'll be more prepared for them.

It allows you to make adjustments. Last year my property taxes and house insurance jumped. But because I had a budget I was ready. I was able to determine which expense categories I could readjust to offset the increases. Adjusting your budget may mean making lifestyle sacrifices. However, even when you encounter unexpected expenses, you'll be able to recalculate and shift some funds from nonessential categories to the areas where your costs have increased. It lets you pursue your beliefs and goals. Giving to God's work is important. A budget can ensure that you're faithful in your giving. You might have to adjust to provide for giving, but it's worth it. Having a budget helps you align your spending with your core beliefs and values. If you factor in the cost of giving early on, you ensure that you live by your beliefs even in the way you give.

Tyler Buckley is the director of administration for Park Avenue Baptist Church in Titusville, Florida. He advocates stewardship and provides financial counseling to those in need.

The Importance of Life Insurance

None of us knows when our time on earth will end. The appropriate life insurance is an excellent way to ensure that your family will be financially secure after you're gone. Your agent can help you determine which type of policy meets your needs.

term This is the simplest type of insurance policy. Your premiums are fixed and your coverage extends for a set amount of time. This is often the least expensive kind of policy, but it will require you to purchase a new policy when it runs out.

whole life As the name suggests, this policy covers you for your "whole life." Premiums remain the same throughout the life of the policy. The insurance company will typically invest a portion at a modest rate of return and pay you dividends.

universal life This consists of both insurance and investment. Some universal life policies pay the investment component and the death benefit to the beneficiary upon death. The premiums often increase as the policy holder ages.

variable life Similar to universal life, this policy typically offers more investment products. The beneficiary will either receive just the death benefit or the death benefit plus the investment returns upon the policy owner's death.

Leah Backus has been in the insurance industry for more than 20 years, advising individuals and businesses. She can be reached at 407-893-3871.

Keys of Starting a Small Business

Are you an entrepreneur? I have started more than 15 companies and found that it takes more than a good idea and some talent to launch a successful business venture. Yet failure is not inevitable. Here are five principles that will help you greatly increase your odds of succeeding.

If you do not believe in what you are doing, no one else will. A passionate person with limited ability will outperform a passive person with more ability. When I started Trillium Health products in 1989, I have no doubt that passion helped us generate $75 million in revenue in just two years and led to my nomination by Inc. magazine as Entrepreneur of the Year. Before committing to any business startup, ask, "What makes me come alive?"

One of the main principles that separate the small-business successes from the failures is planning. Think of your business as a journey and the business plan as a road map. Failing to plan is the reason 75 percent of businesses fail in their first five years. Helpful resources include Business Plan Pro software, and for help with a business plan, contact MasterPlans (masterplans.com).

Leadership expert John Maxwell says, "People trace the successes and failures in their lives to their most significant relationships." Look for someone who is already successful doing what you want to do or who has the same values you have and schedule time with him. Use the time to gather information. Someone at the U.S. Small Business Administration (sba.gov), will usually meet with you at no charge. The local Chamber of Commerce is another great place for help.

No matter how much ability you have, there is no success without perseverance. Being successful in business requires discipline, hard work and preparation. One of the most important predictors of success is whether or not you have the "staying power." Before you open your business, ask yourself whether you have the perseverance to finish the race.

Seek God's guidance in all you do. Ask Him for wisdom, and the right people and resources. Start by asking Him if your business opportunity is the right one for you. Talk to God as if He is your business partner, before, during and after you start your business. I talk to God constantly, seeking His wisdom when I don't know what to do.

Steve Cesari is president of Vital Visions Inc. and a nationally acclaimed entrepreneur, mentor and speaker. Visit him at 1percentclub.com.