11
  • Questions
  • Links
  • Scriptures
Financial Independence

More and more baby boomers are turning fifty each year. Many thirty and forty somethings are watching their parents struggle in retirement. Most twenty somethings have given little real thought to their own retirement. Questions about retirement feel too big and fearful. Consequently, many people avoid thinking about it and planning for it until it is too late. This bucket will help to orient your thinking about retirement so that you can plan for it with confidence and approach it from God’s perspective, using His wisdom.

What are the three questions everyone is trying to answer about their finances?

What are three questions everyone is trying to answer about finances from Master Your Money on Vimeo.

  1. Will I ever have enough? Will I be able to retire, or have enough extra to pay for emergencies?

  2. How much is enough? Have I set finish lines so that you know how much is enough?

  3. If I have enough, will it continue to be enough? People are living longer now than ever before, so is my lifestyle going to be supported by what I have accumulated?

What are the three most important financial questions I should ask myself?
  1. Who owns it?
    I am a manager or trustee of everything God has given me. How will I handle it?

  2. How much is enough?
    I need to set finish lines so that I know when I am done accumulating. Then I decide what to do with the extra.

  3. Who is going to be the next steward?
    Who gets what I have accumulated after I am gone, and are they prepared?

Should I ever borrow money from my 401(k)?

Should I ever borrow from 401k from Master Your Money on Vimeo.

  • A 401(k) is a great vehicle for planning for retirement. If your employer matches any part of your contribution, you should maximize what you put in, in order to maximize your long-term benefits.

  • You are allowed to borrow money from your 401(k) for a number of reasons, including a down payment on a house, or a medical emergency.

  • You should borrow from your 401(k) only in the most extreme or unusual circumstances. People who borrow from their 401(k) often find it very difficult to repay themselves. Do not ever borrow for another investment, or to spend the money on a consumer item. When you do, you have taken part of your future out of play, because you no longer have the magic of compounding working for you.

What can you tell me about IRAs, 401(k)s and 403(b)s?

Tell me about IRAs 401k and 403b from Master Your Money on Vimeo.

  • In our current economy, the individual, even if a corporation offers one, funds their own retirement plan.

  • You should maximize contributions to your retirement plan. You will pay no taxes on the contribution now, the income you earn is tax deferred, and you get to use the magic of compounding pre-tax until you retire.

  • An IRA, 401(k) and 403(b) are not investments; rather, they are vehicles through which you can make a choice of investments. You are responsible for choosing your investments and deciding where you are going to invest.

  • You should manage these investments conservatively, with a long-term perspective.

What are the financial facts regarding widowhood?

Some startling statistics:

  1. 80% of American women will face widowhood. (www.investmentnews.com)

  2. 32% of women age 55 or older are widows. (US Census Bureau, 2000)

  3. About 700,000 women become widows every year, and the life expectancy of a widow is 14 years after her husband dies. (US Census Bureau, 1999)

  4. 28% of widowed women live in poverty. (www.investmentnews.com)

Most women are not prepared financially for losing their husband.

There are many ways to prepare for widowhood. Husbands, you need to take into account the fact that your wife is most likely to outlive you. Your job is to try to help her be prepared financially, emotionally, and spiritually.

Why should we set financial goals?

There was a study done with a Harvard University MBA graduating class that found that 3% of the class far surpassed their classmates in success. The only difference that was found between these two groups was that the 3% has written goals, while the 97% did not.

Four reasons to set financial goals:

  • Setting goals gives you direction and purpose. If you write down your goals, you will know where you are going and the steps you need to take to get there.

  • Setting goals helps crystallize your thinking. Do not use broad generalizations. Set specific goals so that you can take legitimate, specific action.

  • Setting goals gives you personal motivation. If it is written down and you know what you are striving for, you will be more motivated to accomplish it.

  • Setting goals gets you to think through and write down what you believe God’s will is for your life.

Why don’t people set financial goals?

It is estimated that only 3% of Americans have written goals.

Why?

  • Fear of failure. If you do not write it down, you can’t fail.

  • Goal setting takes too much time. The reality is that most people already know in their heads what their goals are.

  • How do I set goals?

    • Record your impression

    • Refine and refine some more

    • Make your goal specific in regard to time and amount

  • What goals do I set? Set short-term goals and long-term goals.

    • There are only 5 uses of money in the short term: Give, pay taxes, pay off debt, lifestyle, save for the future.

    • There are several uses of money in the long term: Financial independence, retirement, college education, start a business.

How do you set financial goals?
  • Ask God what to do. This is best done in a quiet time with God, every day.

  • Journal. This crystallizes your thinking.

  • Make it measurable. Set an amount and a time period for your goal.

  • Take action. Take small steps toward your goal.

What do you do when your spouse does not agree with your financial goals?
  • 50% of Americans who get married will end up getting divorced.

  • Over 50% of couples that get divorced cite financial issues as the reason they got divorced.

  • Financial problems in a marriage are usually a symptom of poor communication. As a couple, you need a process to communicate about your finances so that you can avoid conflict.

  • Set aside a time as a couple to individually set goals. Then come together and talk about what each of you want. You may find that you agree about more things than you realize.

  • When you sit down proactively and set goals together, you eliminate potential conflict, and make some really good joint decisions.

What financial goals should we set?
  • How much do you want to give and where?

  • How do you want to plan for your taxes?
    What do you want to do about the debt that you have? This includes credit card debt, car loans, and home mortgage.

  • What about your savings? What are you saving for in the long term, and how much do you need for that? This could include retirement, financial independence, and college education for your children, a vacation home, or other long-term goals.

  • What are your goals relative to your lifestyle? Most people do not set lifestyle goals. They simply continue to increase their lifestyle instead of setting a finish line.

If you set goals in these five areas, you will have direction in your financial life. When you have a plan, you can have peace.

In regard to insurance, should I buy term or whole life?
  • The first and most important question you should ask yourself is how much life insurance do you need? Generally, the younger you are, the more life insurance you will need, so that your can provide for your family, pay for children’s education, pay off your home mortgage, etc.

  • The second question you should ask yourself is how much life insurance can you afford? Once you decide this, you can decide what mix of term and whole life insurance you should get. Work to find a good insurance agent who can help you make this decision.

  • The most important counsel I could give you is to never be uninsured or underinsured.

How much is enough for retirement?

The biggest part of this question is: How long are you going to live? No one knows the answer to this question, but you should know that, statistically, the older you are, the longer your life expectancy is.

Three variables that determine how much is enough:

  • Lifestyle: How much do you spend every year to live? Be sure to include the rising medical costs you may have.

  • Income: What will your social security be? How much do you have in your retirement plan, and how much income will that generate?

  • No debt: If you can reach retirement with no debt, you will eliminate a big expense that many people have every year.

Use a professional to help you think through how much you need and how much you really have. Make these calculations as early as you are able so that you can begin planning for your retirement.

A good website with a thorough retirement calculator is www.newretirement.com.

The career path I am on will never allow me to earn much. Will I ever have enough for retirement?
  • Whether you will have enough for retirement is not as much a function of your income as it is a function of your expenses.

  • The best way to plan for your future is to avoid spending consumptively and live within your income.

  • Start with a spending plan that keeps your spending less than your income.

  • One of the best tips for being ready for retirement, regardless of your income, is to contribute as much as you can to your company’s retirement plan, or your own retirement plan, and to start doing this as early as possible.

Should I ever stop working?
  • Retirement to a life of leisure is not Biblical.

  • Statistics show that when a person retires to a life of leisure, their life expectancy drops dramatically, because they no longer have a purpose.

  • If you are a person who is close to the age of retirement, you should use the wisdom and the experience that comes with your age to make a contribution to your culture, your church, and your family.

When should I start taking social security?
  • When it comes to social security retirement benefits, you can choose to start taking benefits at age 62, 65 plus 10 months, or 70. The earlier you start receiving benefits, the less you will receive for the remainder of your life.

  • For most people, it makes the most sense to start receiving social security at age 65+. The incremental benefits are not usually as great if you wait until you turn 70.

  • You would be wise to consult a professional for advice. In this case, you can ask the social security office, or go to www.ssa.gov, or talk to someone who has experience in retirement matters.

Importance of Emergency Fund

In my opinion, short-term savings is more important than long-term savings. Every household should have three to six months’ living expenses saved for emergencies and unexpected events.

When you look at what to do with extra money in your budget, there are three steps to follow:

  1. First, pay off short-term debt, such as credit cards and car loans.

  2. Secondly, put three to six months’ living expenses into a savings account. This money will be available to be used for things like major car repairs, a new air conditioner for your home, a medical emergency or a job loss. Unexpected events happen to all of us, and you will have tremendous peace of mind to have emergency money set aside.

  3. Third, save for the long-term. Long-term savings can be used for retirement, children’s education, or a second home.

Financial maturity is being able to give up today’s desires for future benefits. A good example is saving for retirement in your company’s 401(k). You put money into your account regularly when you could have spent this money on something for today. With the magic of compounding working for you, if you save $1000 a year, starting at age 25, with an average return of 12.5%, you will have $1,000,000 when you retire. In other words, you have given up $40,000 of short-term gratification for $1,000,000 for retirement.

Titus 2:12
“Live self-controlled, upright and godly lives in this present age, while we wait for the blessed hope--the glorious appearing of our great God and Savior, Jesus Christ.” (NIV)

Bill Page at CBN, “How to Build a Nest Egg”

Click Here to View the Full MasterYourMoney.com Blog

Investing in Gold

Gold should be one of the last priorities in your investment portfolio. Gold should not be a normal part of an investment portfolio, because the reason you would invest in gold is as a safe haven against hyperinflation.

I would not ever speculate in gold, because the prices are at the whim of investors.

After all of the rest of your investment objectives have been met, you can invest in gold – but never more than 10%.

The purpose for owning gold is protection, not investment, because if the price goes up, it indicates that the economy is not doing well at all.

Get advice about what kind of gold to invest in. Find someone educated in the broad arena of investments to help you make a good decision.

Proverbs 10:3-4
“The Lord does not let the righteous go hungry but He thwarts the craving of the wicked. Lazy hands make a man poor, but diligent hands bring wealth.” (NIV)

Ken Little at About.com, “Should You Buy Gold?”

Click Here to View the Full MasterYourMoney.com Blog

A Definition of Retirement
  • The American dream is to retire. To most, “retirement” means stopping their work life.

  • I believe that the Bible does not give any examples of people who stopped working.

  • You may become financially independent. At that point, you are free for another form of ministry. Think of changing careers at the end of your life as “rehirement.”

  • Jesus said that He had finished the work God had for Him to do, but He said this at the end of His life. I believe that I am not finished with my God-given work until I go home to be with the Lord.

Ephesians 2:10
“For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand that we should walk in them.” (NKJV)

John Ensor at Desiring God, “Kissing Retirement Goodbye”

Click Here to View the Full MasterYourMoney.com Blog

How do I adequately plan for retirement?

Start by asking yourself a few questions:

  • What does God think about retirement?

  • When am I done working?

  • Am I entitled to retirement?

How to save adequately for retirement:

  • Begin early. It does not take a lot of money, because of the magic of compounding, to save for retirement if you start in your 20s.

  • If you did not begin early, start now. Do not wait.

Colossians 3:23-24 (NIV)
“Whatever you do, work at it with all your heart, as working for the Lord, not for men, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.”

Bob Lotich at ChristianPF.com discusses “Biblical Retirement.”

Click Here to View the Full MasterYourMoney.com Blog

True Financial Freedom: The Salvation Decision

What is the process of achieving true financial freedom?

The first, fundamental decision that you have to make on the road to financial freedom is to deal with your relationship with the creator God. Trusting Him as Savior of your life is a necessary first step to financial freedom.

This decision is between you and God, and you have to make this decision before you can begin the process of true financial freedom.

John 3:16 (NASB)
“For God so loved the world, that He gave His only begotten Son, that whoever believes in Him shall not perish, but have eternal life.”

Campus Crusade for Christ tells how you can know God personally.

Click Here to View the Full MasterYourMoney.com Blog

True Financial Freedom: The Lordship Decision

What is the process of achieving true financial freedom?

The second decision you need to make is the Lordship decision. Once you have a relationship to God and His Son Jesus, you need to decide who is on the throne of your life as Lord. God is either Lord of all or He is not Lord at all. This is the second decision you need to make on the road to financial freedom.

Ephesians 4:22-23 (NIV)
“You were taught, with regard to your former way of life, to put off your old self, which is being corrupted by its deceitful desires; to be made new in the attitude of your minds.”

The Navigators writes a devotional about making Christ the Lord of your life.

Click Here to View the Full MasterYourMoney.com Blog

True Financial Freedom: The Calling Decision

What is the process of achieving true financial freedom?

The third decision you need to make is: What has God called you to do vocationally? You may be called to be a doctor or a lawyer, or you may be called to be a stay at home mom or a volunteer. But each person has a work that God has called him or her, specifically, to do.

Ephesians 2:10 (NASB)
“For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand so that we would walk in them.”

Dan Miller asks the question, “Can your job and your calling be the same thing?”

Click Here
to View the Full MasterYourMoney.com Blog

True Financial Freedom: The Steward Decision

What is the process of achieving true financial freedom?

The fourth decision you need to make is to commit to managing everything that God has entrusted you with for His honor and His glory?

I Peter 4:10 (NASB)
“As each one has received a special gift, employ it in serving one another as good stewards of the manifold grace of God.”

Randy Alcorn explains how to send your treasure ahead of you to heaven.

Click Here
to View the Full MasterYourMoney.com Blog

True Financial Freedom: The Treasure Decision

What is the process of achieving true financial freedom?

The fifth decision you need to make is to lay up treasures in heaven. You can decide to be a pipeline of God’s resources, rather than acting as a bucket that hoards resources. You cannot take your resources with you when you die, but you can send them on ahead as treasure in heaven.

I Timothy 6:18-19 (NIV)
“Command them to do good, to be rich in good deeds, and to be generous and willing to share.  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.”

Charles R. Swindoll encourages us to be a joyful pipeline of generosity.

Click Here
to View the Full MasterYourMoney.com Blog


Financial Independence

More and more baby boomers are turning fifty each year. Many thirty and forty somethings are watching their parents struggle in retirement. Most twenty somethings have given little real thought to their own retirement. Questions about retirement feel too big and fearful. Consequently, many people avoid thinking about it and planning for it until it is too late. This bucket will help to orient your thinking about retirement so that you can plan for it with confidence and approach it from God’s perspective, using His wisdom.

 

Quicken.Online.com gives tools for planning and budgeting.

Fool shares ideas on planning for retirement.

SoundMindInvesting.com archives general investing articles.



Financial Independence

More and more baby boomers are turning fifty each year. Many thirty and forty somethings are watching their parents struggle in retirement. Most twenty somethings have given little real thought to their own retirement. Questions about retirement feel too big and fearful. Consequently, many people avoid thinking about it and planning for it until it is too late. This bucket will help to orient your thinking about retirement so that you can plan for it with confidence and approach it from God’s perspective, using His wisdom.

Ecclesiastes 5:10
He who loves money will not be satisfied with money, nor he who loves abundance with its income. This too is vanity. (NASB)

Ecclesiastes 5:12

The sleep of the working man is pleasant, whether he eats little or much. But the full stomach of the rich man does not allow him to sleep. (NASB)

Ecclesiastes 5:19
Furthermore, as for every man to whom God has given riches and wealth, He has also empowered him to eat from them and to receive his reward and rejoice in his labor; this is the gift of God. (NASB)

Luke 12:16-21

And He told them a parable, saying, “The land of a certain rich man was very productive. And he began reasoning to himself, saying, ‘What shall I do, since I have no place to store my crops?’ And 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. 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.”’ 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?’ So is the man who lays up treasure for himself, and is not rich toward God.” (NASB)

John 17:4
“I glorified Thee on earth, having accomplished the work which Thou hast given me to do.” (NASB)

Ephesians 2:10
For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them. (NASB)

II Thessalonians 3:10
For even when we were with you, we used to give you this order: if anyone will not work, neither let him eat. (NASB)

I Timothy 6:9-11
But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. For the love of money is the root of all sorts of evil, and some by longing for it have wandered away from the faith, and pierced themselves with many a pang. But flee from these things, you man of God; and pursue righteousness, godliness, faith, love, perseverance, and gentleness. (NASB)

   


 

 
Goal Setting
Financial Assessment
Spending Plan
Debt Repayment
Planning Weekend - Couples
Planning Weekend - Singles
 

 
 

 
 
 

COPYRIGHT © 2010 KINGDOM ADVISORS, INC. ALL RIGHTS RESERVED