The Problem with Wealth

The Problem with WealthThen He said to them, “Beware, and be on your guard against every form of greed; for not even when one has an abundance does his life consist of his possessions.”
Luke 12:15 (NASB)

As we get to the end of Financial Literacy Month, I wanted to touch on the fundamental topic of generosity.

Generosity is a financial muscle that should be exercised often so it can be developed.

You see, as much as I want you to do well with your money and to prosper financially, I have a greater concern.

I want to make sure that money does not become the primary preoccupation in your heart.

I want you to have the proper perspective with money now, so as you prosper it can be a blessing to you and not a curse. I don’t want you to have a problem with wealth.

Jesus knows us and he knew the great temptation wealth can be for everyone. I think that’s one of the reasons He spoke so often on the proper context for material wealth.

On one occasion, while He was teaching, a man asked Him to make a judgment on a family inheritance between him and his brother.

It seemed that one brother that was probably serving as the executor of the state, was withholding the goods from everyone else.

Interestingly enough, Jesus refused to be drawn into the family dispute. Instead, he took the opportunity to teach us a great lesson about how to handle wealth.

You can find the full text of His teaching in Luke 12:13-21.

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The Question of Wealth

16 And He told them a parable, saying, “The land of a rich man was very productive.
17 And he began reasoning to himself, saying, ‘What shall I do, since I have no place to store my crops?’

Here is the story of a man that worked hard and his land was very productive. Obviously he had been blessed in his diligence.

In the first place, I want to remind you that there is no condemnation for creating wealth from the work of your hands.

But also note that the produce of the land was more than enough to sustain himself. He had more than he could store in his existing barns.

So logically, the question was, what to do about that abundance?

The Problem with Wealth: Greed

 18 Then he said, ‘This is what I will do: I will tear down my barns and build larger ones, and there I will store all my grain and my goods.
19 And I will say to my soul, “Soul, you have many goods laid up for many years to come; take your ease, eat, drink and be merry.”’

Here is the problem, instead of the man considering how to bless others with his abundance, he had turned inward.

Just in verse 18 there are 3 uses of the pronoun “I” and 3 uses of the possessive “my”. At this point it was all about himself.

Instead of responding with gratitude and contentment, the man had the wrong response to the blessing he received: greed.

Webster defines greed as the “a selfish desire to have more of something (especially money)”. The Scriptures condemn greed as idolatry (Colossians 3:5).

The man’s plan was simply hoard goods and worry about himself only.

And that’s the problem with wealth: it can turn us away from others and God. It can simply lead us to just want more and more.

The Futility of Greed

20 But God said to him, ‘You fool! This very night your soul is required of you; and now who will own what you have prepared?’
21 So is the man who stores up treasure for himself, and is not rich toward God.”

So is this passage teaching that we will die on the spot if we are greedy? That God needs our money?

Absolutely not. The first point it teaches is that we are all here today and gone tomorrow. Our lives on earth are very brief in the context of eternity.

We show a heart of wisdom when we understand that reality (Psalm 90:12). Our times are in God’s hands.

Second, it also teaches that no matter how much we store here on this earth, we can’t take anything with us. It will all go to someone else.

Finally, God does not need our money. He owns it all (Psalm 24:1). The lesson indeed is that we should put money and wealth in the proper context.

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The Proper Response to Wealth

When we are rich towards God, we are putting the priority of what matters to Him.

It means that we use our wealth according to what He wants to do, not according to what we want to do.

The man was preoccupied only with himself and God showed him the futility of his thinking.

Instead, you and I can think first about Him and about others. We can choose to be a blessing to everyone else.

Yes, take care of yourself and your family for sure (I Tim 5:8).

But don’t stop there. Share with others. At every opportunity, do what you can, for who you can, with as much as you can (I John 3:17-18).

That’s the proper response to wealth.

19 “Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal.
20 But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves do not break in or steal;
21 for where your treasure is, there your heart will be also.
Matthew 6:19-21 (NASB)

 Question: How can you develop your generosity muscle today?

3 Questions to Ask Your Financial Planner

3 Questions Financial PlannerIf you have been a reader of this blog for a while, you know that I am all about helping you to win with your money.

I want to share what I have learned about budgeting, saving, and getting out of debt, which are the keys to prosper in your finances.

But there are areas of personal finance in which I myself need help and wise counsel.

For example, I am not a certified financial planner or investment professional.

I do have investment principles I follow, and I also understand what my current investments are and how they are performing in the market.

However, I am not an expert in the area of investing.

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What do I do then? I have an investment professional that helps my wife Stacey and me. And unfortunately, I had been remiss in meeting with him for more than one year. He had sent me an e-mail earlier this year indicating that it was time for a sit down review.

Being so busy, I promptly ignored the e-mail and went about my business. Then a phone call followed up and Stacey answered it. As a good wife will often do (Proverbs 31:10-11), she said something to the effect of: “We are paying him, we might as well take advantage of his expertise.”

Of course she was right as usual, so we made the appointment. We had a great discussion with him and we got a great sense of where we are.

I thought about the appointment beforehand, and I want to leave you today with 3 questions to ask your financial planner:

1. Are We investing in the Right Things?

As I mentioned before, we do have investment principles we follow and investment vehicles we chose personally. You should only invest in something you understand and can explain to someone else.

You should also monitor the performance of your investments on a regular basis. I don’t mean obsess over the daily ups and downs of the market. But do check it quarterly or monthly as appropriate.

So my first question was, are we investing in the right things? How have those investment vehicles performed recently? I wanted to make sure we are still making wise choices.

Our financial planner explained that most of our investment vehicles were doing well, but there was one that had underperformed recently.

Based on his analysis of the results, he gave us a recommendation for a change. Based on his counsel and our understanding of the information, we took his advice and made the change.

2. What is a Safe Withdrawal Rate for Us in Retirement?

This is a question that’s often debated in financial circles:  what to do at the point in your life where you are no longer drawing income from a job or a business? You probably have heard numbers between 4% and 8%.

Your income then will come from your retirement savings. So, how much can we safely withdraw every year in order to make the money last through our retirement?

While I have heard and read about the different percentages for withdrawal, I wanted our planner’s expert opinion as it applied to our personal situation.

We only have one son and he is on his own and no longer dependent on us. We also carry no consumer debt and our mortgage should be paid off within the next 10 years.

So given all of that, what’s that number for us? Because he understood our situation and also knows how our investments are performing, he gave us an answer that we feel very comfortable about.

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3. Are We on track for Retirement?

This is the ultimate question in terms of finances, right? Will we have enough to carry us into our golden years? Will we have enough or will have to work into our 80s and depend on Social Security?

Now listen, I want you to work and do something you love doing until the day you die if that’s your choice. Work is a blessing and we were created to work, excel, and bless others with the fruits of our labor.

But, I only want to do something because it is my choice. I don’t want to work because I have to work. The point of prospering with money is that gives you options and freedom to do what you want to do.

So that’s the question I had: given everything you know about our situation, are we on track for retirement?

I wanted to know if everything we have done in the last 8-9 years was putting on us on the path we wanted to be.

I have been blogging for about 4 years now and sharing with you what I have been doing and encouraging you to do the same so you can prosper.

So this was a good litmus test for all that advice I have been dispensing.

Thankfully I can say that based on our planner’s analysis of our current savings, our current investment rate, and our plans for retirement, we are definitely on track to retire with dignity. We are on track to reach our goals to enjoy our later years in the strength of our financial resources.

Now, no one can predict the future. But you have to analyze and plan as if you are going to be here for a while. You have to understand where you are headed with your money in case you need a course correction.

I am glad we took the time with our financial planner. I am glad he has a vested interest in our well-being. I am glad he took the time to explain to us how we are doing.

So remember, we all need help sometimes. We all need wise counsel from time to time.

You don’t have to go at this alone. Take advantage of the expertise available to you.

Make an appointment with your financial planner today!

Question: Do you know if you are on track for retirement?

The Tax System is Broken. Should You Give Up on Winning with Money?

Tax System is Broken17 Tell us then, what do You think? Is it lawful to give a poll-tax to Caesar, or not?”
18 But Jesus perceived their malice, and said, “Why are you testing Me, you hypocrites?
19 Show Me the coin used for the poll-tax.” And they brought Him a denarius.
20 And He *said to them, “Whose likeness and inscription is this?”
21 They *said to Him, “Caesar’s.” Then He *said to them, “Then render to Caesar the things that are Caesar’s; and to God the things that are God’s.”
Matthew 22:17-21 (NASB)

Well, that’s finally done. I just finished filing my taxes for the past year. This is never an enjoyable experience for me. Every year I get stressed out and angry about having to deal with the U.S. tax code.

But as a Christian, I have no choice but to deal with it every year. The context for the passage at the top of this post is Jesus’s last week before going to the Cross (and I am writing this on Palm Sunday!).

For about 3 years, Jesus had been ministering in Israel and for that length of time the Jewish leaders sought to catch Him in an inconsistency or a blasphemy so they could find cause to eliminate Him.

The passage above brings us one of the last questions they used to challenge Him. They were trying to trap Him either as a traitor to the people (for supporting the tax system and Rome), or as an insurrectionist (seeking to challenge and overthrow the government by refusing to pay taxes.)

As usual, He was way ahead of them. He knew their hearts and evil intent. And He offered a marvelous response leaving all of us with a fundamental principle:

You have to deal with and pay your taxes regardless of what the government is doing with the money.

The Tax System is Broken

I believe the U.S. tax system is broken. For starters, it is way too complicated. There are too many rules and they change every year.

The average person needs a tax professional or specialized software to file their taxes. This is not only costly, but also requires an enormous amount of time and record keeping on everyone’s part.

Second, the system is broken because the government simply wastes most of the income they generate from the tax collection. I would not have such a big problem with paying taxes, if I knew the government was using the money wisely. Sadly, I know better.

Now, let me just say that I don’t have a problem with some amount of tax to go to the government. We do have common needs like infrastructure and defense.

I also don’t have a problem with programs that help those truly in need. There is a place for the government to step in and help.

But a complicated tax code and government waste are not my biggest concerns with the tax system.

My biggest concern with the tax system is that it does not encourage anyone to win with money.

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The Tax System Penalizes Those Who Manage Money Well

The tax system is based on collecting income tax. So the more you win with money, the more you are taxed. The more you earn, the fewer tax deductions you have. Fair you say? Maybe.

But if you are working hard on managing your money well, on getting out of debt, on saving and investing for the future, you have a problem. The tax system penalizes you for doing well with money.

You end up paying more than your fair share of taxes. The system does not encourage you to prosper. It is designed to “help” those that are not doing as well with money.

With the “good intention” of helping out, the system encourages dependence on the government versus independence of living on your own financial strength.

It does not encourage hard work or entrepreneurship. It encourages just getting by and hoping someone catches your slack.

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Should You Then Give Up on Winning with Money?

One temptation is that you just want to throw your hands up and give up. Just do enough so you don’t exceed some income threshold. You know, just don’t make too much money.

Another temptation is that you won’t want to report all of your income. That’s why sometimes many people just want to be paid in cash (i.e., no trace).

I recently spoke with a young entrepreneur who is working hard and doing well. Sometimes she gets tipped in cash and for a moment the temptation is there not to report anything. But she knows better. That would be cheating and stealing.

So yes, the tax system is broken. Should you then give up on winning with money?

No!!! One of the principles I like to emphasize as I write and as I coach people on personal finances is this: you have to be above average.

You have to excel in all that you do!!! So you go do what we know is right and proper:

  • Work hard every day. Excel at what you do and stand out!!!
  • Make your money work for you. Get on a budget, break the chains of debt slavery. Prepare for the future by saving and investing.
  • Take care of your family well. Teach your children how to handle money and how to prosper.
  • File your taxes. Deal with it with honesty and integrity. Make sure you report every penny you make and that you get every deduction you are legally entitled to by the system.
  • Help others. Share what you know. Help those in need. Encourage them to prosper with money

Yes, I know the tax system is broken but that’s not keeping me from doing the right thing.

Jesus did not give me that option. And I must obey Him in all things.

Question: How do you deal with your tax situation?

Can You Learn to Handle Money?

Can You Learn to Handle Money?It’s a good time to ask this question since April is designated as Financial Literacy Month.

If you have always struggled with your finances, you may think that you can’t learn to handle money. The reality is that we all can learn something new.

Let me give you an example. Lots of kids learn to ride their bikes at an early age, maybe 5 or 6.

In my case however, I was 9 years old and I still had not learn to ride a bike for a number of reasons. So obviously, I needed some help.

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Learning To Ride

My mom got re-married and we just had moved to a new neighborhood. I did not know anyone yet but then I met Nelson.

Nelson was one of those kids that didn’t seem afraid of anything. He learned I had a pretty much brand new bike that I was not riding and he could not stand it.

Summer break came and he insisted that he could help me learn to ride my bike. I wasn’t so sure but I was really ready to ride my bike. So I let him give me a few pointers and give me a push.

The first time, I felt great, I kept my balance for a little while. I could hear Nelson encouraging me and yelling behind me. I did crash that and then I could hear him laughing but it wasn’t an evil laugh. It was just funny how I crashed. I was laughing too.

But I had rode my bike for a while. I was encouraged so Nelson helped me to try again a few more times. A few more crashes but I did get better at it, I did learn to ride my bike.

What about You?

What’s keeping you from handling money well? Is it your family history? Is it the number of times you have tried and failed? Is it because you don’t know where to turn?

Sometimes you just need a little help. I can coach you and teach you how to handle money better. I know what to do because I had to learn it myself. Like Nelson helped me, I can help you.

There is no better time than the present. Think about all the things could do now only if you had control of your finances.

Think about all the things you could in the future if you just could get on solid financial footing. Think about all the good you could do if you were able to give and bless others.

Financial Literacy Month is the best time to learn how to handle money.

Question: What are you waiting for? 

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