It’s summer! Who wants to work? Not me! But imagine: Planning more, acting less, and yet ending up with better results. This is the first in series on improving personal productivity, based on the first chapter in the Bible. Why start there? Think about it; God gave us a whole chapter describing how He made everything. Most believe Genesis chapter one is a myth or merely poetry. Big mistake. Others get caught up in the young earth/old earth debate. Big distraction. Join me in learning from our Creator how we can improve our work habits by copying some aspects of His working style. Clearly we are not God; we cannot command things into existence. But we are made in His image as creative beings and therefore we enjoy creative activities. Let’s learn from our Creator, starting at the beginning.
Wisdom With Wealth News
What is true conservatism? This past year we have all witnessed some big political surprises in Europe and the USA. Some have called it a populist resurgence and a move away from globalism. I don't know. I really don't like following the gyrations in the political world. There are much more important things to do, personally, at home, and locally. But, during the past year, some thoughts have been in the back of my mind which are now on paper. Where are governments headed, especially in Alberta and in Canada?
This essay deals with the topic of true conservatism. It approaches the topic from a financial perspective. How can we tell if we are investing in a good cause or just wasting money? What are the two tests to see if government policies/practices resonate with reality? Why are some financial initiatives doomed to failure and others headed for success?
If you are interested in these questions then I invite you to download the attached in PDF form and read it online.
“What’s that? It must be a typo! You can’t have (8) eight of (7) seven. Impossible! Everyone knows that. You can’t make something out of nothing. You can’t feed thousands with just a few burgers. Nobody can work financial miracles; it would be like turning ordinary water into expensive wine! Face it, there are certain laws of the universe that no one can override. Besides that, everyone’s financial situation is different; it’s unique. It’s like a personal fingerprint. For God to help every person with a customized miracle, God would have to know not just their financial needs, but also their financial skills. Unbelievable! Such intimate personal knowledge would be like knowing how many hairs are on each and every head. Ridiculous!”
Money is strange. It disappears faster than it appears. As humorous, American poet, Ogden Nash, once said, “O, money, money, money, I’m not necessarily one of those who think thee holy, but I often stop to wonder how thou canst go out so fast when thou comest in so slowly.” It’s just plain hard to preserve wealth. Stock market “corrections,” inflation, and financial fees all destroy our wealth. What to do? Jesus tells us to “store our treasures in heaven.” I plan to deal with this in a future article, but what do we do with our vulnerable earthly treasures? Let’s take an indirect lesson from Abraham, whom God made “very rich in livestock, in silver and in gold,” Genesis 13:2. Note Abraham’s three categories of wealth: Livestock, silver, and gold. This is the first biblical mention of a diversified asset portfolio to safeguard earthly blessings. I see livestock representing dividend-paying stocks with growing dividends, plus the ability to reproduce via stock splits. Livestock falls within the asset sector of consumer staples, and might even be viewed as utilities/infrastructure. On the other end of this investment spectrum we have gold. It’s dead. It does nothing. It just sits there and looks pretty. Yet gold is internationally recognized as a primary store of value. It’s used as pavement in heaven, but on earth it will never lose all its value. Silver represents cash and highly-liquid, short-term bonds. Some of you may remember when silver was cash. Before 1967, Canadian dimes and quarters were mostly silver. It’s good to keep some of your portfolio as cash so that you can act fast. Why diversify your holdings? Ecclesiastes 11:2, as expressed in the God’s Word Translation, says it best. “Divide what you have into seven parts, or even into eight, because you don't know what disaster may happen on earth.”
Give to the poor. This is another secret ignored by the financial planning community, except perhaps as an afterthought or as a tax reduction strategy. Too bad! The Bible heralds it loudly and consistently: “He who gives to the poor will never want, but he who shuts his eyes will have many curses,” Prov. 28:27; “Happy is he who is gracious to the poor,” Prov. 14:21; “One who is gracious to a poor man lends to the LORD and He will repay him for his good deed,” Prov. 19:17; “The generous man will be prosperous and he who waters will himself be watered,” Prov. 11:25. Jesus himself said, “Give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap,” Luke 6:38. I am not saying we should “give to get” in a motivational sense. I am saying that if we give properly, God will ensure that we are not net losers.
Honour your parents. Really? How’s that related to financial success? In decades of financial planning and counselling I have noticed that those who spoke well of their parents tended to be better off (even financially) than those who criticized them. This is a general rule, and not always true. It’s not discussed in professional accounting circles or in university finance courses, but I think it should be. It’s a law of life that God has established for us all and the only one of the Ten Commandments with a specific reward. “Honor your father and your mother, as the LORD your God has commanded you, that your days may be prolonged and that it may go well with you on the land which the LORD your God gives you,” Deuteronomy 5:16. Unfortunately, most Canadians have ignored the Bible during the past fifty years, so they have unwittingly missed out on this blessing. If this is the case, how do we honour parents?
Underspend! Deliberately underspend! Humble yourself by choosing to live BELOW your affordable lifestyle. It’s simple, but not easy. Voluntary frugality is one of the biggest secrets to financial success. In the perennial best seller, The Millionaire Next Door, you can read about the inner-workings of wealthy households. It’s a good read. Contrary to what advertisers would have us believe, riches and hyper-consumption don’t go hand-in-hand. Quite the opposite! Most millionaires purchase used cars—not new—nor do they drive many luxury cars. My brother in Ontario was surprised that one of the Canadian billionaires, Mr. Weston, who could easily afford a Rolls Royce, drove a Ford minivan. I remember reading about the owner of Wal-Mart, who, when asked why he drives a used pick-up, replied, “Because I like it.” Financial coach Dave Ramsey says that when you are getting out of debt, “you must live (super-thrifty) like no one else, so that when you are out of debt, you can live (abundantly) like no one else.” It’s all about delayed gratification. Together as a couple or family, choose the area(s) you will reduce spending in, and celebrate your successes with high-fives or a special, affordable treat. For example, cut out junk food, or buy used items instead of new.
I thought my dad was dumb! There he sat with his hand-designed ledger, shopping receipts, and a bank statement. He was at it again—recording all our family expenses by category, and reconciling them to the bank statement. Why track your money? You can’t bring it back. Who cares where it went? Well, that’s what I thought as a teenager. Even after my know-it-all years, and into my thirties, I didn’t take this seriously until I had six children and was starting a business. Money left as cash, cheque, credit card, debit card, or pre-authorized payments. As money itself becomes more nebulous, measuring money flows becomes more difficult. Financial coaches have their clients track personal spending for at least 30 days. Why? You can’t manage what you don’t measure. Get organized. Keep score. It’s the third “spiritual secret” to financial freedom. Getting organized may not sound spiritual, but it is indeed spiritual. Spirituality is not chaotic; it’s quite the opposite.
Three years ago I was in Kathmandu, the capital of Nepal, with my son Timothy, and we were walking in the intersection of three, small streets when we noticed a large, broken brick on the road. I stooped down, grabbed the brick, and flung it into the nearby bushes. Timothy asked, “Dad, why did you do that?” Surprised, I explained that the stone was clearly a traffic hazard, and it only took a few seconds to clear away. He replied that in a Hindu country dirty, menial tasks are left for the lowest cast, or viewed as karma from the gods for some unsuspecting cyclist. But I had been trained by my parents to be a blessing to others. Sadly, many individuals and nations have significant financial trouble simply because they don’t apply this second secret. They don’t work to serve others.
Most people in the Western World ignore God when it comes to money matters. Really? God? Which God? There’s only one Creator. He is sovereign. He understands everything divine and human—including all money matters. The Lord Jesus Christ, who physically rose from the dead (a historic fact), is God Almighty, being co-equal with the Father and the Holy Spirit. Here is the first of seven, spiritual secrets to successful money management.
Since the 2008 stock market downturn, major countries around the globe have been avoiding fiscal restraint and engaging in currency wars. Essentially, they have been trying to outdo one another in printing money to generate wealth, but really, it’s the illusion of wealth. I like the way Drummond Brodeur, Senior VP and Global Strategist of CI Investments, put it: “Without tough reforms in both the Eurozone and Japan, Quantitative Easing is just a palliative monetary drug that eases the pain of decline, but does not fix the problem.” Multiple central banks now have negative interest rates. I don’t know how this coping method will end, but it won’t end well. I believe we are slowly and steadily moving towards a global currency made up of a basket of the world’s major currencies plus a portion of gold. Canada has zero gold reserves, thereby making it weaker in a global currency crisis. The use of gold makes me think of the “shekel of the sanctuary” described in Leviticus 27:25 NIV: “Every value is to be set according to the sanctuary shekel, twenty gerahs (approx. 12 grams) to the shekel.”
Work is a four-letter word. I’ve never liked it. The only things I seem to like are immoral, illegal, or fattening, but their pay is lousy. Good pay takes real effort. A Calgary saint, now-in-glory, by the name of Henry Esau used to attend Crossroads Community Church. During downturn of the mid 80s he said many people were looking for a job, but not many were looking for work. Jobs with no work? Sign me up. Yet, I also remember my dad saying that during WW2, in the prisoner-of-war camps, he saw men going crazy from boredom. They said to their captors, “Give us some work to do.” Why is this four-letter word so unpopular and yet so necessary? We hate it, and love it at the same time!
What do you add to your coffee? And I don’t mean cream or sugar.
Although not a coffee connoisseur, I do enjoy a cup of good coffee. Have you noticed that when you buy coffee, and many consumer staples, they often come with “extras?” By this I mean customer loyalty promotions. At McDonald’s you get one sticker for every hot drink, and when you have collected seven you get one free drink. At Tim Horton’s you get to play Rollup the Rim for a chance to win. So what? I know the different tactics seem insignificant, but the underlying principles are highly important. These two loyalty promos radically reflect different strategies for improving your financial well-being. Here's the point: It’s not how much money you have; it’s how you manage it. One strategy fosters an attitude of steady plodding, and the other a spirit of speculation. One works for gain and the other plays for gain. Which is better? In my opinion, McDonald’s has the better plan based on Proverbs 13:11: “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” (ESV)
Hard times in Alberta call for a financial refocus back to the Bible. Some Bible passages I find difficult to understand. For example, when God led the children of Israel out of Egypt, it soon became apparent that the desert vegetation and wildlife could not sustain them. God supplied manna, the sweet cookie-like food, six days a week. Obviously, this was miraculous. We find the full account in Exodus 16. There was enough for over two million people. The manna that came on the sixth day lasted for two days, while all other days’ manna spoiled in one day. Personal effort was required to collect this miracle food; it did not just crystallize in their baskets.
Recently, I took a two-day refresher course in Calgary on Personal Income Tax. Two full days of painful, technical details, but the lunches were good. Quoting from the teaching professional, our taxes, and especially the sequencing of tax credits, is “insanely difficult.” Did you know that from 2015 to 2016 the top marginal rate in Alberta rose from 39% to 48%? The number of tax brackets increased from five to nine. The future looks even worse. As governments continue overspending to “stimulate” the economy, they push the financial burden onto our children and grandchildren. We are to blame. Where did this love of taxation come from?
Are we being fooled about money? In this short article, Tom talks about the three biggest money myths we are often led to believe, and why it’s dangerous to believe them.
1. You must have a lot of money to be a good money manager: FALSE.
How did the great money managers develop their skills? They all started small. Skill and amount differs like a pianist and a piano. Some say, “Just let me win the lottery and I’ll show you how good I am at managing money.” Dream on. Jesus said, “He who is faithful with little is also faithful with much,” (Luke 16:10). The skill of money management is more important and valuable than the money itself. God says in Proverbs 8:11, “Wisdom is better than jewels and all that you desire cannot compare with her.” Let me go on to say that good money skills usually attracts more money, but not always. The key is to focus on skill development, not on quantity.
Recently, I read an article in the Financial Post saying that some States in America (15 to be specific) are aggressively looking at establishing their own local currencies based on a gold standard. The Colorado Honest Money Act, the Vermont Dollars bill, and the Georgia Constitutional Tender Act among others exemplify the deep frustration with the massive printing of U.S. dollars during the past four years. Quoting from the Post: “Once the domain of crackpots and wingnuts, a growing number of Americans believe returning to the gold standard or bringing gold coins back into circulation, is the only way to restore sanity to the fiscal system that is out of control.” In Utah, a law went into effect in May making gold and silver coins legal tender and exempting the exchange of coins from income or sales tax liability.” Imagine that, the establishment of new local currencies. It makes me remember the Master’s words: “A kingdom divided against itself cannot stand,” Mark 3:24.
Something for nothing. We all want it, but where can we get it? Is it even realistic? Recently I read a quote from Mark Mobius, Executive Chairman of the Templeton Asset Management’s Emerging Markets Group, that another financial crisis is inevitable because causes of the previous one haven’t been resolved.
Mobius was addressing the Foreign Correspondent’s club of Japan in Tokyo in response to a question about price swings: “Are derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
Recently the value of gold hit an all-time high of $1,556.33 US per ounce. That’s an increase of over 400% since I last wrote about precious metals (City Light News October 2003) when gold was $370. Why the huge jump?
In a nutshell, the financial confidence in the US dollar fell through the floor. Across the globe, but especially in the US, paper currency was being printed like monopoly money in an attempt to stimulate (aka quantitative easing, a banking euphemism) the economy which suffered its worst crash since the Great Depression of the 1930’s.