Financial freedom is magnificent, but it’s also rare. Why? It doesn’t come naturally; we must continually fight for it. Imagine an intense battle raging on four sides of your financial territory. Think of your financial world as rectangular in the shape of a credit card or a $20 bill. The top edge represents the inflow of your earnings. The bottom represents your personal consumption. The left edge, covered in our last article, represents the two types of sharing both of which require strict discipline: voluntary sharing (generosity) and involuntarily sharing (taxation). Finally, we will look at the right side, dealing with saving and investing. Most of us find it hard to save money. It’s even harder to invest prudently. Successful money management is no easy task.
Wisdom With Wealth News
So far, we looked at the two most important battle zones in our fight for financial freedom: personal productivity (November) and personal consumption (February). Now it's time to consider how we share our own money—voluntarily or involuntarily.
In November we looked at the least discussed key to financial success—our personal productivity. Now its time to look at the most common reason for financial failure—excess personal consumption.
November is financial literacy month in Canada. I suspect we will hear much about the stock market, inflation, taxes, interest rates, and retirement woes but little, if any, about productivity. Personal productivity is the neglected essential to financial success. It’s a human trait to look outside for solutions while often the answer is in our own behaviour. When we work smarter and harder, our financial conditions improve.
The greatest teacher of all time was also the hardest worker of all time. In three short years, His work caused the global calendar to reset. When? About two thousand and twenty-two years ago. Why? Simply put, “God was in Christ, reconciling the world [emphasis added] to himself.”1 Jesus being both God and man had infinite capacity and ability. What can we learn from God about personal productivity?
In just three years, the greatest teacher of all time impacted the world more than anyone else. How was that possible? Jesus Christ was both human and divine. What did He say about financial literacy? A lot! He taught about money matters more than heaven and hell combined. Many of His parables were filled with financial overtones.
What did he say? Before I get into specifics, let me say emphatically that if our government gurus studied Jesus’ teachings on the proper use of money, we would not be in today’s financial mess. Sometimes, I think senior finance bureaucrats need a Dave Ramsay course or counsel from Mary Hunt!
We are in big trouble. The Covid19 pandemic and the governmental response has set up a world-wide financial mess. As with all messes, it’s much easier to make them than to clean up. Frankly, I am convinced we need divine intervention.
In the beginning, God turned chaos into a magnificent, finely tuned created order. This same knowledge, wisdom, and understanding combined with infinite power is what we need now to fix our global crisis!
To master your money, research the following timeless and universal principles. Read the steps below and open the hyperlinks. START AT YOUR TOPIC OF INTEREST AND POWER THROUGH.
Over the past 50 years Western governments have run large budget deficits, creating massive, accumulated debt. Now, in the past two years during Covid, governments ratcheted up their spending to prop up markets and “replace” the money lost through the reckless shuttering of so many small businesses. Recently you might have heard the term “global financial reset” and are wondering what it is. Given the unsustainable levels of debt, there is no question that we are approaching a point where drastic and far-reaching decisions must be made to get us off the current path to destruction. What these decisions will be are very much debated, but what is not debatable is that the future will be increasingly uncertain. We need to be prepared. While none of us know the details, I believe the global financial reset will include a guaranteed annual income, major declines in the value of currencies (massive money printing), and perhaps a global digital currency (referred to as SDRs or Special Drawing Rights on the International Monetary Fund). It may also include a minimum global tax rate, so different countries can’t compete for investment capital. Most likely, this will all be implemented after a major market collapse, a global monetary crisis, or a personal security meltdown. The global financial system is in a precarious, perilous situation. How can you safeguard your wealth?
Warm Greetings from Calgary!
I hope you are keeping well and looking forward to the summer.
I'm still expecting the North American money markets to go down to pay for our expensive and erratic responses to Covid. It would be very different if our governments had billions stored in reserve—like the vast amounts of resources the ancient Egyptian government stored during the seven years of plenty, which preceded seven years of famine. Not so for Canada or the USA; our spending was all debt-driven. Our bills will come. When? I don't know. To put things in perspective, when Justin Trudeau debated Stephen Harper back in 2015, Trudeau forecast an annual government overspending of about $10 Billion. The latest projection for 2020-21 is about $350 Billion. (35 times higher!) Of course, no one foresaw the pandemic. Nonetheless, we must deal with its financial consequences sooner or later. Let's remember the big picture.
How do you invest during a robbery? Robbery? What robbery? Would governments ever take away our wealth? How trustworthy are they with taxpayer’s money? Is this just conspiracy theory or fiction? Look at https://www.weforum.org/agenda/2016/11/how-life-could-change-2030/
I believe the massive financial stimuli by central governments in Canada and the US are creating a huge bubble in the stock and housing markets. I cannot understand how a government-mandated productivity decrease causes our wealth to increase. Government stimuli through increased monetary supply and infrastructure spending is certainly pumping more money into the system, but not more wealth. A day of reckoning is coming, but I don’t know when. In the meantime, we need to work on our financial fitness by sharpening our skills in four areas.
Reset or no reset, I believe we will have serious repercussions from the widespread lockdowns. Is there anything we can do about it? How can we prepare?
There is good news. Over the next three months, I'll be sharing stories of individuals and families who have taken practical steps to weather the coming financial storm. All of them shifted their trust away from small “g” governments with huge debt loads, to big “G” God, with infinite resources. Rather than seeking financial independence they pursued financial interdependence with family and with their community. First, we'll look at regaining monetary spending control. In March, we will discuss medium-term saving and investing. In April: Investing in assets that are beyond the reach of inflation, fraud, fees, and even taxation itself. Stay tuned!
Can you remember last time you pushed the reset button on your phone or computer? Pushing a reset button is usually a non-event. Most electronics are designed with reset buttons, used to get everything working properly again. They normally restart the system quickly. Simple. Easy. Painless. What about “The Great Reset” politicians are talking about? Will this be as easy as pushing a button? And, more importantly, will it really improve our world?
Reset buttons exist because technological systems have a “manufacturer's default” they can revert back to. Here's the problem as I see it: The global financial system is not a piece of electronic engineering with default working conditions, at least not yet. Global economic and banking systems were not designed for a “Great Reset."
In March of 2020 it seems like the whole world went over the COVID-19 cliff. The pandemic is horrible, but so is the collateral damage, and that may be even worse for some people. What to do? Here are some tips from my wonderful wife: Practical Priscilla, Professional Homemaker and Management Consultant:
- Acknowledge to God that you have a problem and need help.
- Balance. Start measuring what your income and outflows are. Measure so you can manage. Try using Your Money Kitchen or some other cash flow tool.
- Contentment. List your blessings! Find someone poorer than you that you can share with.
What is a NIRP?
Like most people, you likely have not heard of Negative Interest Rate Policies (NIRP) before. Imagine putting $100 into the bank just so you can take out less than $100 in the future. How about buying a house using a mortgage where you pay back less than you borrowed. Crazy! But real. Negative interest rates are becoming common in Europe after having been used by Japan (with little success) for many years.
I love my day-job, but I admit that I thoroughly enjoyed my foray into the political arena. Like many Canadians, I am dissatisfied with the big political parties. When I discovered the Christain Heritage Party (CHP) and personally got to know its leadership, I was impressed. Finally, a party with values based on unchanging principles of law, order, truth, and love. I’m far more concerned with being scientifically correct than politically correct. I found it to be the only party with a message of hope. A blast of fresh air.
In September both previous CHP candidates in the riding of Bow River backed out, and since I lived in this riding I was asked to step into the fray. Having received proper clearance from Portfolio Strategies, and most of all from my wonderful wife, I agreed to run.
Start anytime—even now, and even if it’s with a small amount. God looks at giving on a relative scale. A five-dollar gift by one person may be more significant than a five-hundred-dollar gift by another. It may be more significant in the eyes of God, although not for treasurers and accountants on earth. For further clarification, consider the story of Jesus watching how people gave money to God.
In the Sermon on the Mount, Jesus said, “Store up for yourselves treasures in heaven, where neither moth nor rust destroy, and where thieves do not break in and steal,” Matthew 6:20. This investment strategy is repeated as Jesus said, “Provide purses for yourselves that will not wear out, a treasure in heaven that will never fail, where no thief comes near, and no moth destroys,” Luke 12:33. His advice is not given for God’s benefit, but for the benefit of the investor. Jesus tells his followers to keep their treasures super safe.
How accessible is “treasure in heaven?” Must we die to enjoy our pie in the sky? The answer is a resounding NO! It is downright discouraging to have wealth super safe, yet totally illiquid and inaccessible. The description “in heaven” can be misleading. It’s not about the location (heaven), it’s about the custodian—God. Jesus is directing us to a safe investment, not a faraway investment.
God’s investment house has more branches and outlets than all banks and investment firms combined. It’s available to us both now and in the unending future. Wise generosity will result in benefits before physical death. Notice that Jesus speaks of a bountiful reward for generosity: He said, “Give, and it will be given to you. They will pour into your lap a good measure—pressed down, shaken together, and running over,” Luke 6:38. Consider the emphasized words, phrase by phrase.
- (1) They: We don’t know who “they” are. They might be angels, but note that the word is “they” rather than “he.” The use of a plural subject describes more than one source of repayment. The point is this: Generosity has a multiplier effect. Generosity invokes more generosity.
- (2) will pour: The word “will” implies certainty. Jesus did not say “might” or “could,” but “will.” It’s a promise. The word “pour” implies a rapid flow as opposed to a dribble.
- (3) into your lap: This shows that you don’t need to go get the repayment. It will come to where you are comfortably seated. In other words, the repayment will find you; you don’t need to search for it!
- (4) a good measure: This means the quantity is not meagre or eroded by fees, but a “good” measure, meaning something like a baker’s dozen, which consists of 13, not just 12 items.
- (5) pressed down: This means that there are no air pockets, no false appearances, no empty spaces.
- (6) shaken together: This refers to a second step to ensure that the recompense is full and complete.
- and (7) running over: Despite it being pressed down and shaken together (compacted), the return gift is over and above previous capacities!
Wow! Look at all seven aspects of abundance. The amount coming back is much greater than the amount going out. Jesus said, “It is more (emphasis added) blessed to give than to receive,” Acts 20:35. How much more blessed is it to give than to receive? We don’t know. But Jesus can be trusted to make it more.
Tom Lipp
The investor must give by faith. It’s not a faith in “faith,” but a faith in God—that God will see and respond. “Without faith it is impossible to please God,” Hebrews 11:6. When we give generously by faith, we don’t know how and when God will “repay,” but He certainly will. God’s blessing is a promised reward for faith-based obedience. A “payback” is real and assured, but the specific form/quantity/media are not predictable. The blessings for faith-based obedience can take an endless number of expressions—even beyond our comprehension.
A physical resurrection will certainly shock those who have been cremated. Cremation is financially cheaper than a burial, and takes up less space than a grave or tomb, but make no mistake: God has ordained a bodily resurrection for everyone. Physical reconstruction of a human body is not hard for God; it’s just a matter of reassembling molecules. Even while living, the atoms and molecules in our bodies are replaced about every seven years. The DNA blueprint stays the same, just the molecules change.
It’s important to save. Saving isn’t easy—especially not in our consumption-driven culture. Debt reduction is usually the most important and difficult step in saving, but it’s essential for financial freedom. Saving allows us to set aside some current income for future enjoyment. This future enjoyment can be short or long, and—believe it or not—can even be unending. In our “Registered Resurrection Account” series we’ll introduce a super-long-term, permanent savings account. Capital accumulation at its very best!
Most people save for their retirement, and retirement planning is a big business. Governments promote retirement savings to reduce pressure from seniors on the public purse. In Canada we have the RRSP (Registered Retirement Savings Plan) and TFSA (Tax Free Savings Account). In the States, Americans use their 401k or a Roth IRA. But is standard retirement planning the best way to save for the future? I don’t think so.
Don't misunderstand; I’m not saying that regular retirement savings is wrong, just that there’s something better in addition to traditional retirement saving—something longer-lasting and not tied to financial markets or taxation system. I recommend that it precede—not replace—retirement saving. It's better, but it’s not new, just forgotten.
Jesus Christ spoke of it many years ago. He recommended a savings account with an ultra, long-term perspective: A million years and beyond! It’s enduring, super safe, and tax proof. I like to call it the Registered Resurrection Account (RRA). Jesus said,
When you give a luncheon or a dinner, do not invite your friends, or your brothers, or your relatives, or rich neighbors, otherwise they may also invite you in return and that will be your repayment. But when you give a reception, invite the poor, the crippled, the lame, the blind, and you will be blessed, since they do not have the means to repay you; for you will be repaid at the resurrection of the righteous. [emphasis added] Luke 14:12-14.
Amazing! But what if you don’t believe in a resurrection? What if there is nothing beyond the grave? What if this life is all there is? Well, then Jesus Christ was terribly mistaken. Was He wrong? I doubt it. I’m biased, but I defer to His wisdom—especially on matters concerning life and death. He said, “An hour is coming, in which all who are in the tombs will hear His [God’s] voice and will come forth; those who did the good deeds to a resurrection of life, those who committed the evil deeds to a resurrection of judgment,” John 5:28-29. When Jesus says all, He means ALL. Everyone will come out of their graves, whether they believe or not. The Law of Gravity doesn’t require faith to operate when it makes things fall. Faith or its absence never established a law.
Tom Lipp
(All Bible citations are from the New American Standard Bible - NASB translation unless otherwise indicated.)