What Did I Pray for That Began to Turn My Financial “Titanic”?

This blog is written for those who desire to be debt free and financially sound.  I’m one of those people too.  And if you’re like me, perhaps you’ve been working at this thing for a while and perhaps you’ve tried a lot of things.  I don’t know about you but I’ve done some pretty unusual things to try to generate money and pay off debt.  I’ve done everything from network marketing to selling vacuum cleaners to taking on extra patients, just to name a few.  Don’t get me wrong, I’m glad that I’ve done most of those things.  All of them taught me something of value that I have taken forward. 

 

As I look back there is one thing that began to turn my financial Titantic.  It wasn’t a job or financial pep rally or the passing of a rich uncle, but rather something that began to work on my thinking.  It was much more foundational than employing an envelope system to track my cash or purchase a software program to help me account for my money.  It was the incorporation of 13 basic principles into my life and thinking which I later shared with others through my book, 12 Pillars and a Prayer.  Once I began to practice these principles in my life and finances, I noticed something.  I stopped praying for the big check and starting praying for something else…something that has impacted far more than just my checkbook.  What did I pray for?  One simple thing:  wisdom!

 

Now I wasn’t the first to pray for such things.  Centuries ago a man named Solomon was challenged to ask for anything, that is, anything and it would be given to him.  He chose to ask for wisdom too.  Granted, anybody with 700 wives and 1000 concubines would do well to ask for wisdom, but the big story here is that he became an extremely wealthy man.  That is to say, his financial statement was insanely skewed in the direction of riches!  So much so that even the rich people were blown away by his enormous estate (see Queen of Sheba in your concordance). 

 

So what does a man like this have to tell us about his wealth?  A lot actually.  He was the Donald Trump of the day and he knew the secret of his success.  Throughout the book of Proverbs, otherwise known as the book of Wisdom, Solomon discusses his wealth.  Like a late night infomercial, Solomon discusses the virtues of his success in Chapter 8 of Proverbs. Here are a few nuggets from that chapter:

 

Does not wisdom cry out

And understanding lift up her voice?...

Receive my instruction, and not silver,

And knowledge rather than choice gold;

For wisdom is better than rubies,

And all the things one may desire cannot be compared with her…

Riches and honor are with me,

Enduring riches and righteousness…

My fruit is better than gold, yes, than fine gold,

And my revenue than choice silver…

That I may cause those who love me to inherit wealth,

That I may fill their treasuries.

 

Wisdom.  Its value eclipses that of gold, is worth more than silver and trumps the value of rubies.  Nothing compares to having wisdom.  Its value includes both longevity and integrity.  Those who love wisdom are destined for wealth and coffers that are running over.  Sounds like a pretty sweet deal, huh?  Even the witless can wrap their cerebral processes around this concept that wisdom and wealth are joined at the hip!

 

But how does one obtain wisdom?  This is not an easy question to answer.  Next month I’m going to share some ideas taken from scripture, shake it together with life stories and answer the question.  It is key to wealth, both generating and managing it.  So until then, my prayer is always that you prosper and be in good health, even as your soul prospers…

GIVING: Why Do It When I Am Barely Paying My Own Bills?

I’ve read a lot of teaching on giving the past 10 years.  I have found a wide range of ideas about giving, particularly within the Christian community.  Some will say ardently that you should give 10%…its 10% or burn!  Others assume that God will understand your circumstances and you can just give whenever you can…funny how the infamous “whenever” never seems to come!  Others say just give some portion even if its just a dollar or two.

I find it interesting that if you talk to any wealthy person, regardless of spiritual convictions regarding giving, how quick they are to tell you that giving is an important part of their success.  I’ve never met a wealthy person that was not involved in giving to charity work…not one.  Some will say to me, “Yeah, but they are loaded.  They have it to give!”  But is there another reason why the wealthy give?  Perhaps it’s the other way around?  Maybe they are wealthy because they give!  When we stop to consider this principle we find 2 dynamics in place:  a spiritual and a psychological.

The Spiritual Dynamic.  Christians generally won’t argue the point of giving even though statistics tells us that only about 2 out of 10 do so on a regular basis.  What Christians will argue about is how much should be given and when.  Paul tells us in Pillar 10 (II Corinthians 9:6) of a connection between giving and the quantity of what we receive from life.  It’s a fairly simple principle taken from agriculture that says if you plant seeds you will receive a harvest.  Conversely, if you don’t plant, don’t expect anything to grow!

A second aspect of “how much do I give?” is a different issue.  Certainly the Old Testament standard was set at 10% and given that the early church was made up of hand-picked Jews it is logical to conclude that the early church recognized the gold standard of 10%.  However, Paul seems to make a little wiggle room when he says “but let each man give as he has determined in his heart to do”.  Some use this to say that the 10% Gold Standard is obsolete and so just give what you want.  But to get caught on the numbers is to miss his point which is found in the words determined in his heart.  Paul is trying to help us understand that giving involves the heart and is not just a matter of numbers.  Paul was challenging men and women to evaluate their hearts.  Why?  Well, its because “issues of life flow from the heart” (Proverbs 4:23).  

The Psychological Dynamic.  One of those “issues of life” has to do with how one’s mind works.  Many behavioral studies have documented how people tend to operate out of a self-perceived schema or notion of who they are.  A man who was raised as a poor farmer and died a multimillionaire once said that when he first understood principles of wealth that he began to “tip like a rich man”.  Why?  Because he understood that his mind continued to operate on a lacking man’s program and that if he gave his tip sparingly his actions would surely reinforce his mind’s notion that he was poor.  He needed to do something to persuade his mind that he was no longer poor and lacking.  As it turns out an overwhelming number of rich people give, not because they somehow feel guilty for their success (as the poor assume).  Rather they give to create in their mind a program that says they are wealthy.  Giving persuades the mind that you are (1) connected to others and their needs and (2) in a perpetual state of receiving.

So giving is not so much an issue of numbers although I do not believe that Paul was intending to abolish Old Testament teachings and that 10% remains the gold standard.  Rather I believe that Biblical teaching dares us to look at our heart and if we regularly practice giving we will begin to make us a better, richer person by changing our self-perception.  

If you want to read more on this subject and begin to reprogram your thinking about money, I recommend getting a copy of my book, 12 Pillars and a Prayer.  In the meantime, I hope that you prosper and are in good health even as your soul prospers!

Pillar 10 in Real Life …Sow abundantly, and you will reap abundantly!

By M. Russell Thomas, PhD

Its been 7 years since first committing the 12 pillars and prayer to memory.  Throughout that 7 years I have enjoyed numerous in vivo, or “real life” experiences that bring a specific Pillar to new understanding.  It’s an energizing moment when it happens and the words of scripture live in a practical way.  Recently, Karen & I had one of those in vivo experiences involving Pillar 10.

Pillar 10 (II Corinthians 9:6) says that if with sow our seeds in life sparingly we will also reap from life sparingly.  Conversely, if we sow our seed abundantly we will also reap abundantly.  The Pillar goes on to say that we determine what kind of sower we will be and with what kind of attitude we will cast our seed.  There are basically 3 types of givers we will become:  a cheerful giver, a begrudging giver or a withholding giver.  The choice is ours.

The seed to sow or give is given to us.  Most of us in Western culture think of giving only in terms of dollars and cents but I think its much more comprehensive than that.  Life provides us all types of seed to sow and give.  While it may be literally money, it may also be patience at the checkout line or grace when offended.  It may be a home to the orphan or clothes to the homeless.  Tithes and offerings in ancient days often involved the giving of produce or livestock, or even perfume, all of which represent a portion of one’s labor.  Whatever is given, it is clear that giving involves a heart and lifestyle verses an actual percentage or dollar amount.  Thus the words of Pillar 10…let each one give as he has determined in his heart to do. 

Pillar 10 connects the dots for us that there is a correlation between how you give and how you receive back into your life from that giving.  That brings me to our recent in vivo teaching.  Karen & I have several dozen free range chickens that roam our backyard each day.  They serve two purposes:  to eat bugs and to supply us with the most vibrant, flavorful eggs one could ever ask for! 

Recently the gals had been slacking off.  Generally, we were gathering less than half the eggs we usually received each day. While still producing enough for our immediate family, we were somewhat concerned about the lower production because we like to distribute the eggs to our older children.   Our oldest daughter and her husband had come to visit and in spite of the reduction of eggs, Karen loaded them up with 6 dozen eggs as they left to return home.  We were happy to do it and did so without hesitation. 

What happened next reminded us clearly of Pillar 10 and how these pillars are foundational for living life well.  The days following Karen’s giving saw the chickens’ egg production jump way, way up.  Generally they were laying about twice what they had been!  The principle is clear:  give abundantly and receive abundantly if your heart is set on being a giver.  We weren’t playing Heavenly Slot Machine and reminding God that we did so He must…, but rather, we were simply trying to bless our daughter and her husband with something good and in the process God reminded us that living life giving freely has its rewards. 

As I reflect on this story, I am reminded that there are foundational truths in this world.  In spite of all the changing ideas and philosophies in our world, God has set in motion a set of simple solutions 4 living life well!  They are as sure as gravity and more trustworthy than the laws of physics.  They guide us to a rich, successful and abundant life!

For more about the 12 Pillars and a Prayer and how they offer a firm foundation for your financial success and wealth, visit us at www.simplesolutions4.com.  Until we talk again…

I pray that you prosper and are in good health even as your soul prospers!

Lessons from the Master Teacher

Today I read an interesting story found in the Bible in the book of John the 7th chapter.  Jesus is walking along with His brothers when a rather curious conversation breaks out.  His brothers extend the invitation to Jesus "Hey lets go up to Judea for the Feast of Tabernacles" as if they have had some kind of epiphany.   Because of threats on His life, Jesus respectfully declines the invite.  But then, what ensues is a bit curious.  Jesus sends His brothers on to Judea and then...He promptly goes, perhaps incognito.  

But why?

Obviously Jesus knew that He would go, so why did He tell His brothers to go on and observe the Feast of Tabernacles without Him.  I think there are 2 possible answers:  first, His brothers had not fully bought in.  Verse 5 says that “even His brothers did not believe”.  Perhaps their disbelief in some way would hamper Jesus' mission. 
The second possible explanation has to do with timing: Jesus' time had not yet come.  Twice in Chapter 7 He says "My time is not fully come".  Perhaps Jesus didn't want to show up to the Jewish Feast, which incidentally it seems that He was pretty determined to fulfill, with a band of brothers.  Doing so might draw attention to Himself.  And why would that have been such a bad thing?  What if in doing so He was killed in the mob, thus failing to fulfill His mission and purpose on earth?  The entire plan of God's restoration and salvation for man hung in the balance and would be thwarted.

But what does this have to do with finances you might ask?  The answer lies in the "timing" message.  If you have read my book 12 Pillars & a Prayer you might remember that God's plan and purpose is to make stewards out of each of us.  That means that prosperity and wealth and money are found within the context of being a steward, i.e., a conservator of God's provisions.  Such conservatorship is rarely bestowed upon the novice and when it is that novice is even more rarely up to the challenge.  No, stewardship carries with it the conation of a battle tested warrior who has learned the tactics of conquering an enemy.  In the case of finances, that enemy is usually from within.  I think that the hardest thing to tame in life is your spirit when you know that God has something for you, you see the need, but your time is not yet come.  Your job is to lay low and let time have its perfect appearance.

As business owners, entreprenuers and those who simply desire to be financially sound and prosperous, we often want it now.  We want the booming business, lots of cash flow and balanced bank statements...now!  And when we don't get it now the tendency is become discouraged and retreat into old habits.  Things like not making the extra call, bouncing a check, not writing on your book today and even worse, starting to doubt that God really desires to see His people do well in this world.
You see the real message of this story is this:  calling and purpose are great and necessary for us to succeed in this world, but they are not enough.  Timing is everything!  You may be on a real mission to build your business, but if you're out of time, I promise you, your desired results will be for another day.  

• Rush out there to open your restaurant without training your servers and chances are you'll be out of business real soon.  
• Talk to someone about purchasing your product and they just lost their job and your chances of closing the deal diminish greatly.  
• Tell somebody about this dynamite business opportunity and they just got burnt in their last one and chances are you're going home empty.
• 4,000 books were just released on How to grow your garden and you might rethink if this is the right time to hit the market with another one.

You get the point?  .  Just as the Master Teacher was not sucked into the moment you might need to go to the feast incognito for the time being.  His time had not yet come, He knew it and He was willing to pass on the moment in order to get to the maximum payoff.  Had Jesus acted solely on His calling it would have cost Him his life prematurely and the entire plan of salvation would have been derailed.  The lesson here is that calling is not enough.  You must also discern the time.

The point of the story can be expressed in a mathematical equation: 

Calling + timing = Tremendous payoff and harvest.

Our job is to know both our calling and the times.  In such is great prosperity of body, soul and spirit!  Until we talk again, may you prosper and be in good health! 

Crisis of Faith!

"I wrote the book for crying out loud!"  "I've been quoting and living by this stuff for 7 years now!"  I found myself drowning in a flood of emotion and my mind was running wild.  I had just reviewed the fee schedules posted on Medicaid and Medicare's websites and realized that there was a 30% pay cut for all of us healthcare providers.  This was right after one of my daughters told me that almost 100% of her promotion was negated by a tax increase.  And if that wasn't enough the AOL welcome screen's leading story was that Congress received a pay increase! 

Needless to say, I was not a happy camper!  I had good reason to be angry and so does the rest of America.  The prior week I had listened to all the political hullabaloo about how we were going to strengthen our healthcare, how tax increases would only effect those making $250,000 a year or more, and then find out that in spite of the so-called avoidance of the fiscal cliff on December 31st, none of it seemed to be true.

For the better part of a week my mind and emotions got the best of me.  But what could I do?  This was completely out of my control.  Over 95% of my psychology practice is Medicaid/Medicare and now it was evaporating faster than I could say "the mortgage is due".  I found myself agitated, depressed, and most of all, fearful.  Fear is not an emotion I tolerate well and often forces me into quick, impulsive and sometimes, irrational decisions.  I don't think that I am alone in my reaction to fear.  I've seen people do some pretty ill-advised things in an effort to bring their fear and anxiety under control.

After several days the fear and anxiety began to take its toll on me.  I could feel it in every part of my body and I wasn't sleeping well.  The question of the day in my house was "Dad, are you stressed?"  Obviously my attempts to conceal my concerns were failing and the question alone brought out my inner agitation and irritability with life.

Then one day this week I'm driving to work, feeling all the weight of the situation, and trying to have some semblance of a prayer.  Thoughts raced through my mind like a runaway freight train.  Conversations with colleagues only served to elevate my anxiety and frustration further.  Think about it.  Loosing almost a third of your income overnight and at the same time having a tax increase.  Shouldn't one's fear be aroused?

In the natural, the answer is yes.  But then, I wrote the book about this stuff.  I said we live in different economy.  And all of sudden I'm not fighting the system any longer, I'm having a full blown crisis.  It was a Crisis of Faith!  Do I believe in Washington's ability to fix things thereby making me feel better or do I believe in a benevolent God who will take care of me and my family regardless of circumstances thereby having a peace that transcends all understanding?
In that moment I asked myself a simple question:  why do I want to let Washington politics, Medicaid/Medicare or any other earthly agent determine what kind of day I will have?  I mean, why would I want to sell my mood to a system that is about as stable as running water?  I was reminded of Pillar 1 and that it is “God who gives me the ability to generate wealth”.  I remembered that the chapter title alone"Our Source”, challenges us to look beyond governmental provision and towards a loving God who has a better idea.  I had to make a choice: who is my source?  My crisis of faith had to be resolved.  I found myself apologizing to God for stability in unstable things and reaffirming my faith in His goodness and care for me.  Before too much longer a peace flooded my soul and fear was now replaced with confidence.  It was the first time in weeks that I had been able to relax and laugh.

When people ask me what 12 Pillars and a Prayer is about, I usually give a short answer that its about money.  But that's the short answer.  The longer answer is that it is a book about thinking about money.  It is a set of principles that form a foundation to living above all the madness that the current economic climate imposes on us.  Pillar 1 reminds us that there is another economic system operating.  It is one defined by a higher purpose and principle.  One that begins with a different source and if we'll begin with placing our faith in that source, we'll be ruled by peace and confidence rather than fear and uncertainty.  As a psychologist I can say with complete conviction that its difficult, if not impossible, to make quality decisions out of mental processes ruled by fear and uncertainty.  When God told Joshua that it was time to go into the promised land he had to say 6 times "fear not".  It was His way reminding Joshua of his source.  He is still reminding us today, the question is, will we believe?  Until we talk again...walk in freedom!

Our Fiscal Cliff: Its Crunch Time!

Since the November presidential elections there has been much in the news about the “fiscal cliff” that this country is facing.  In a nutshell, the so-called fiscal cliff refers to set of laws and regulations that were enacted during the early Bush administration years that are set to expire on December 31, 2012.  Basically, two things are set to happen automatically if Congress cannot agree on a new path:  first, there will be an across-the-board increase of taxes.  Second, there will be automatic cuts to government entitlement programs with defense spending and Medicare being identified most often as the target of a large portion of those cuts.

The Consequences.  The tax increases speak for its self.  If there is no action taken, there will be an increase in the amount of income taxes that you and I pay annually.  It appears imminent, one way or another, that this is going to happen.  Government has overspent its budget consistently over the past decade and at warp speed the past 4-5 years.  Somebody has to pay.  It is like a family that makes $50,000 per year who has been spending $110,000 per year over the past 10 years.  Where do you think that family would be?  It doesn’t take a Harvard economist to figure it out:  IN DEBT!  Lots of it!  And that is where the country is today.

A second consequence of the tax increases has to do with the overall economy.  If people paying more taxes to the government it means they are spending less at Walmart, Costco and every other retail/wholesale business that is patronized by John Q American.  Think about it.  Say, for example, you bring home $2000 a month.  Let’s say that you’ve been paying $400 of that money in taxes.  If taxes are increased you may now be paying, say $550 in taxes.  You still got paid the same but now $150 went to Uncle Sam.  Somebody didn’t get paid this month!  Maybe it was your mortgage, maybe it was the light bill, or maybe you’re eating less.  But the point is that money did not end up in American commerce and now the economy is weakened.  Experts fear that it may send the country back into recession and everything that goes along with it, e.g., job losses, higher unemployment, a flock to more government entitlement programs, etc.  Not good!

Speaking of unemployment, the second part of the equation is cutbacks of government jobs.  More people are going to be out of work if things are left alone.  And even worse, these cuts stand to weaken our national defense and affect those citizens who have been the major payers into this system for decades:  seniors! That’s right.  Medicare is one of the entitlement programs set to absorb its fair share of the cuts.  The ironic thing is that it is these very people, the senior citizens, who have paid into the system for 50 years!

The Upside.  If there is something positive to the fiscal cliff dilemma (assuming that Congress cannot agree on a course of action and time expires) it is that it forces the inevitable.  At some point tough choices are going to have to be made which means cutting spending and possibly increasing revenue (taxes).  Think about it.  If you are not able to pay your bills each month, what are you going to do?  Aren’t you going to look for ways to spend less and maybe take on additional work (increase revenues)?  And more importantly, isn’t that going to be a little uncomfortable to have to make those decisions? 

·       

• Turn off cable!?  Are you kidding me?!  
• I’m already tired and you want me to work another 10 hours per week
•  There goes the Christmas budget this year!
• Stay home for vacation?!
•  …and it goes on and on and on...

The truth is that this country, as well as, you and I are not going to deal with our debt problems without having to make some very difficult decisions.  That requires commitment.  Commitment to a guiding philosophy and overall thought process that is intolerant of debt.

Why are we surprised?  As the past 5-6 years have unfolded, I have been amazed at the thought process found in our nation’s leadership.  It has transcended political parties and has become a cancer to our country’s livelihood, well-being and integrity.  We have seen our credit ratings drop (a measure of how well you’re doing managing your money) and the loss of credibility across the globe.

I also find it hard to throw stones at our politicians.  They reflect what we, the American people, are thinking and the truth is that we’ve been thinking “buy now, pay later” for a long, long time.  Individually, most Americans are not much different than the country as a whole:  run up the credit cards and debt until we’ve ruined our credit, our reputations, and are held captive by our financial limitations brought about by debt.  Everything, and I mean everything, is subject to financial bondage. 

·       

• You don’t want to answer the phone during dinner time because you know it’s a creditor calling for their money,

•  you lose sleep because you’re not sure how you’re going to pay the mortgage this month,

•  Junior needs a new pair of shoes and

• you’re skipping this year’s family reunion because you haven’t paid Uncle Bob back that $2500 you borrowed last year! 

Now here’s the really surprising part…we knew better!  Yes, we were warned!  Didn’t Paul say to “owe no man nothing but to love him” (Romans 13:8)?  Did Proverbs 22:7 not warn us that “the borrower is slave to the lender”?  In Pillar 2 (see 12 Pillars & a Prayer), Deuteronomy 28, did Moses not tell the Hebrew nation that they would “borrow from no one, but lend to many nations”?  It is hypocritical for us to bash Washington when we are likewise guilty.  While we do not let our politicians off the hook for their insatiable desires to spend money that they do not have, at an individual level, we must hold ourselves accountable for our financial appetites and habits.  Let the record show we were given a blueprint for this thing.  Once again, we must acknowledge that God knew better than us.  The 12 Pillars & a Prayer are not just a cutesy little title for a book; they form a solid foundation for living life in abundance and getting our financial house in order.

In that sense, we are all at our own personal financial cliff.  What will it be?  Will we make the right decisions that will break the bonds of financial oppression?  It all starts with one quality decision:  will I do it my way or yield to One whose wisdom is far beyond mine?  He says, “think debt free!”…will we listen?

Until we talk again, sorry for being a little long winded today…

Dr. Russ

When Opportunity Appears, Be Quick to Act...There's a Blessing at Stake!

Today's blog is a confession.  I missed it yesterday!  I was standing in line at a Chinese restaurant behind an elderly man who was trying to pay his bill.  He seemed somewhat disoriented and appeared to be trying to pay with a food stamp card perhaps considering it a debit card.  In any event, the card was repetitively declined.  Standing there somewhat confused and dismayed, the man at the register finally told him to "catch it next time you are in".  Seemingly embarrassed, the elderly man and his granddaughter looked at each other in puzzlement as they walked out of the restaurant.  

And then it happened.  There was a tug at my heart to pay the bill.  For a brief moment there was a tension like Howie Mandel asking for "Deal or No Deal!"  I foolishly didn't take the deal.  And the truth is, I knew it right away!  And then this morning my devotions come of out of II Corinthians 9 (Pillar 10 in my book 12 Pillars and a Prayer) and I realize all the more that I missed a golden opportunity to bless someone as I have been blessed.  Freely,  unconditionally, without strings or examination of motives…just bless for no apparent reason.  Oh, I justified my actions by convincing myself that the old man knew what he was doing andthat he was simply hoodooing the restaurant.  But the truth is, it didn't matter what his intentions were and I had no business judging or questioning that (see Pillar 8 in 12 Pillars & a Prayer).  God's Spirit was knocking on my heart's doorstep and what was I going to do?  

I had to repent.  I've prayed for the past few years that the truth of Pillar 10, specifically, "that a man give what he has determined in his heart to give" would be etched into my character.  I have prayed that the word "giver" and "Russell Thomas" be synonymous.  That when my family and friends think of me they say, "oh, he's a giver".  As I sat in the quietness of my study in the early morning hours repenting of my callousness, God's Spirit began to share two major truths.

First, the scene in the Chinese restaurant was a perfect example of “and while we were yet sinners, Christ died” (Romans 5:6-8). He didn't look at us and try to figure our motives and intents.  Had He done so, He would never have demonstrated His love on the cross: for surely He would have concluded that we were not worthy of such kindness.  Jesus didn’t wait to die until we were in good position to receive it.  No, quite the contrary.  He seized the moment and simply paid the bill for us!  He gave regardless, in fact knowing that our motives and behavior where not where they needed to be.  He was not concerned that we may be hoodooing the restaurant.

The second truth and the real message here, concerns issues of the heart.  We think, “don’t commit murder”: God thinks "when you hate it is one and the same".  We think, “don’t commit adultery”: God thinks, "when you look with strong desire to have something that is forbidden that it is one and the same".  We think, “10% in the plate on Sunday morning": God thinks, "determine in your heart not what you will give.  When you ignore a brother in need perhaps its time for a heart examination (Look at Matthew 25:36)".

Paul understood the principle.  In Pillar 10, II Corinthians 9, Paul doesn’t say to give 10%.  Rather, he reminds us of an importantfinancial and life principle: give in abundance and it will come back in abundance.  Be stingy and stingy will come back to you.  But the real measuring stick is this:  “…as each man determines in his heart”.  Bingo!  Giving is not a number.  Its not a percentage.  It is an issue of the heart.  

Do you want to be rich?  Give richly.  Do you desire abundance in your life?  Give abundantly.  It begins with a heart examination.  What have you determined in your heart?  Will you be an abundant giver or play by the numbers?  Just like me, opportunity to test your heart will present itself.   You can bet your sweet calculator that the next time I'll remember to let my heart guide.  How about you?

The Wisdom of Mortgages

I am absolutely sold on the idea of debt-free living.  While I have been slowly turning my personal financial Titantic around, I realize more and more every week how most of us here in America have so insulated ourselves from the reality of money for “self gratification” that is based on entitlement thinking.  I guess another possible explanation is that we have been duped and bought into rotten ideas about money that keep us a slave to our finances.  While completing my tax returns recently, I had a revelation about this stuff.  I believe it is one of the biggest areas where we’ve been both duped and held captive by our huge spending appetites.  Its called a mortgage!  Let me explain.

Most of us have mortgages.  Our parents had mortgages and some of our grandparents did, but beyond that, generations prior were not as prone to have mortgages.  But our generation, the infamous Baby Boomers, grew up with the idea of a mortgage as a given line item in the budget…that is, if they have a budget.  The point is, most of us Baby Boomers have just accepted the idea of a mortgage and we’ve passed that notion on to our children.

Now, I want to challenge the wisdom of mortgages.  First of all, let us consider that 50 years ago most mortgage companies required at least 10% down in order to qualify for the loan.  This was not only for the protection of the lender, but also the borrower.  The 10% cushion served to absorb some of the loss should the market dip or completely tank.  The recent real estate market crash saw about a 20% to 30% decline in property values.  So, if you had a house that you bought for $200,000 in 2006 say, then when the market bottomed your property was worth $160,000.  If you did not have that 10% cushion then you lost $40,000 of value and are now in a “negative equity” situation, i.e., you owe a lot more on your house than it can now be sold for.  This is exactly what has happened in the last 4 years only most did not have the 10% cushion as they borrowed at 100%.  There was no 10% cushion and the response of many was to walk away from their homes and simply allow the property to go into foreclosure. This is a decision that has numerous long range implications for the homeowner and disastrous implications for the country’s economy.

What is amazing about this whole mortgage thing is how we have justified having one.  The most common comment you hear about mortgages concerns so-called tax benefits.  This is supposed to make the borrower feel good about being $200K in debt and paying about the same in interest across the life of the loan.  But here’s my revelation:  Let’s say you are in the 5^th year of a 30 year mortgage.  Roughly 75% of your monthly payment is interest.  So on that $200,000 loan, you’re paying about $1200 a month, of which $900 is interest.  Over the course of a year, that means you are paying about $10,000 of interest or a total of $14,400 in house payments. 

Now here’s those tax benefits:  You get to subtract that $10,000 of interest from your income.  So say you make $60,000 per year.  With the $10K deduction, you will now be taxed on $50K vs. the $60K this year.  Now, according to my CPA a general rule of thumb is that for every $1,000 of deductions, you will pay about $100 less in taxes.  So that means that you will pay about $1,000 less in tax this year.  Nice little tax break until you consider that you paid $14,000 on a mortgage!  What if you didn’t have a mortgage?  Well then you paid Uncle Sam and the IRS the $1,000.  Which would you rather pay…$14,000 or $1,000?!

This is kind of a no brainer, right?!  It doesn’t make any sense does it?  So if you have a choice do you want the mortgage or no?  And yet we’ve bought into the idea that a mortgage is such a tremendous tax break!  No it is not!  Yes, if we have a mortgage it is one of the few advantages, but let’s face it, compared to not having a mortgage it’s a pretty puny break!

So what would it take for us to get rid of our mortgages?  I think 3 things:

1. Firm commitment and belief that it is doable.  We cannot waffle on this issue.  We must be firmly persuaded that living life without a mortgage not only is a goal worthy of consideration, but that it becomes a priority to eliminate as a line item in the budget.  We cannot accept the flimsy reasons for which we go into debt, particularly on a house.  Most of us have a mortgage and when we think of getting rid of it the task seems impossible.  What’s funny is that when I look back I see plenty of missed opportunities to pay off my mortgage, only to engage in momentary life amenities instead.  “Where there’s a will there’s a way” the saying goes.  If we believe that we can eliminate our mortgage and commit ourselves to being debt free without it, life will have a way of bringing the opportunities to do so.
2. Fixate on being debt free.  Don’t accept anything but debt free in your thinking.  Pillar 2 (12 Pillars and a Prayer) says that as God’s people we will “borrow from no one and lend to many nations”.  What if we began to incorporate that into our thinking?  It is revolutionary and will absolutely change the way we live and make decisions.
3. A plan!  Sit down and list out all of your bills.  I agree with those who suggest to focus on paying off the smaller bills first.  It does 2 things: psychologically, it gives you energy and momentum to begin working on some of the other bills and its one less guy who is calling you at supper time!  The plan should include how much you will pay on each bill each month and when you expect to pay off each bill.  These are just quick suggestions and you may have a better idea.  But the point is, make a plan in writing and work it diligently!

How then should we think about money, wealth, success and prosperity?

12 Pillars and a Prayer is about money.  Its also about whether not its ok to be wealthy.  Yet again, 12 Pillars is a way to think about all the aspects of wealth and God's blessings (including material) on our life.  I have often found that the church tends to polarize itself around this issue.  On one hand, there are the prosperity teachers whose major tenet is to "name it and claim it".  While this philosophy initially glitters and hops, it often becomes the seed of considerable discouragement and even resentment.  After all, if you name and claim it and it doesn't happen you don't have a lot of wiggle room to explain it.  You've either got to say the philosophy is wrong and dismiss all notions that God may want us to enjoy wealth, success and/or money, or be mad at God for not giving you what you wanted.

One the other hand, we've got those locked into poverty thinking.  If I had to guess, I would say this thinking is much more pervasive in the church and is much more destructive.  Poverty thinking says that to have money somehow obstructs our ability to know and have a healthy relationship with God.  Poverty thinking denies a man or woman his/her dreams and screams at us to "Stay in the box!  Its not safe anywhere else!"  Those locked into poverty thinking may allow themselves "reasonable" dreams, but never believe that those big dreams, those ones you think about when you think about "what would I do with the money if I won the lottery", could come true or are even permitted.  And when the possibilities of something greater present, those stuck in poverty thinking quickly retreat to their structured, safe schedules never allowing themselves to tap into that creative side of God that He has placed in each one of us.  Thousands of untold inventions, companies, medical breakthroughs and technological magic have never happened because of poverty thinking.  

Unfortunately, poverty thinking is also deeply embedded and supported by religiosity or a religious spirit that squelches any attempt to break out of the status quo and pursue Godly vision and use God-given talents.   Poverty thinking says the good is ok, but great is too much and moves you away from God.  Poverty thinking is supported by such scriptures as "its harder for a rich man to get into heaven than to pass through the eye of a needle".  But what's the context of these words?  How does this jive with centuries of Jewish thought based on Torah law that says part of the covenant God established with Abraham and was echoed through Moses, includes financial and material blessing (see Pillar 2, Deuteronomy 28).  These promises and covenant was played out in the lives of many biblical heroes (think Solomon, David, Abraham, Isaac, Jacob, and on the list goes)?  In my opinion, a poverty mindset is much harder to deal with because of its subtleties and its shiny religious coat.  But make no mistake about it.  Poverty thinking chokes the life out everyone it touches and prevents an individual from reaching their God-given potential.

So while the church polarizes itself around these 2 extreme positions, how then shall we think about money and wealth and prosperity? Six years ago I found what I believe to be a biblical philosophy or way to think about money.  It was the 12 Pillars and a Prayer.  It literally was a divine download and has changed my life completely.  I have been living this now for 6 years and have seen new measures of peace, progress bringing my finances under control and a richness to my relationships that I did not previously experience.  While most people know how to add and subtract, balance a checkbook and understand the basics of money (i.e, its wise to spend less money than you make), most of us run into problems with our thinking about money.  Most of us lost out when we spent money we did't have to try to achieve something we really didn't need.  Most of us have gotten ourselves in trouble when we mismanage money for emotional reasons that somehow made us feel better at the time but ended up tying a noose around our necks!  So the question is not "Does God really want us to prosper financially?" but rather, "How then do we think about money, wealth, success and prosperity?"

I tackle these questions in my latest book, 12 Pillars and a Prayer and I look forward to discussing these issues on our 12 Pillars and a Prayer blog site each Friday throughout the year.  As always, we invite your thoughts, comments and feedback.  See you next week!

Pillars built on fault lines aren’t very stable!

I am excited to begin writing this blog about money.  Perhaps there is no hotter issue that we face in this country and in our lives that cause more stress and strain than money.  This country's debt problems are mind boggling and to the average American citizen, the numbers are so astronomical that we tend to just dismiss the entire crisis is if it does not matter or effect us.

But make no mistake about it.  It does effect us!  Our country's debt problems and economic woes are only a reflection of what most of us are experiencing in our personal finances.  Several years ago this country issued bailouts to some of the biggest industries in the world:  the auto makers and mortgages lenders.  But where did the money come from for the bailouts?  Some of it came from you and I, John Q tax payer, while the rest was borrowed money!  Get that, borrow money to pay off bad debt on other borrowed money!  But before we get too judgmental, how many of us have done the same thing?  For example, a credit card gets maxed out and another offers to transfer the balance at a reduced rate or call up a friend or family member to borrow money to pay a credit card.  Borrow money to pay on borrowed money (see the excerpt below from my book 12 Pillars and a Prayer).  The result is Fool's Gold designed to make us feel better for a season but makes no real progress on the real problem:  our thinking about money is messed up and our money management is out of control.

This blog, named for my recently released book by the same name (12 Pillars and a Prayer) is dedicated to getting our thinking right about money.  It is designed to be practical, real and founded on Biblical teaching about money, wealth, success and prosperity.  I've been living these 12 Pillars for almost 7 years now.  They have permeated my entire life and guide my thinking about money.  They are powerful passages from the Bible that when applied to all areas of my finances, have led the way for me to become completely debt free.  No, I'm not there quite yet, but I'm on the right path to obtain debt free living in the very near future.  The entire process didn't start with getting a better paying job or eating peanut butter every meal for a year.  It came by changing the way I thought about money.  Now that I am no longer swimming in a pool of debt, it is my desire to see others overcome their economic bondage and live debt free.  To do so changes our world.  I begin this journey of sharing the 12 Pillars with others by asking a simple question:  How would your life be different if you had no debt?  What would change in your relationships?  Would life suddenly become more rich and full, as you no longer were slave to the creditors?  Would you be in a better position to help others?  And what about your own desires to spend?  What if you had a better handle on why you spend money you don't have and in the process remain a slave to debt?

All of these questions will be discussed in this blog.  Each week I will post to the blog either stories that from my own life or from the lives of others (names will be changed to protect their identities).  We will begin this blogging journey with a story from 12 Pillars and a Prayer.  This is a true story that illustrates just how far our thinking becomes when the financial pressure begins to mount.  I hope you enjoy and encourage each of you to comment or contact us and share your story!  You contact us at askdrt@simplesolutions4.com or leave your comments directly on the blog site.

Pillars built on fault lines aren’t very stable!

…owe no man nothing but to love him..!

Romans 13:8

I

t was 15 years ago when I traveled to a conference with a friend and coworker.  Let’s call him Ron.  I listened carefully as he began to lament his financial woes.  I was completely caught off guard by what he told me. 

Ron was a sharp looking young man, bright and came from a nice family.  He had just finished his medical school training at a prestigious private university and was waiting to hear from residency programs.  He had published some of his work in a peer reviewed medical journal.  Ron seemed to have it all going for him.  I assumed him to be of reasonably sound mind and emotionally stable.

“I don’t know how we’re going to pay our bills,” Ron told me as he gazed out of the passenger side window at the vibrantly colored western North Carolina Mountains.  It was late fall and the iridescent mountains captured the majesty and radiance of God’s creative nature.  Ron, on the other hand, was anything but radiant as he proceeded to tell me about his financial woes.

“We owe over $40,000 in credit card debt alone!” he confessed at one point.  “We are months behind on our car payment and the bank is threatening to repossess any day.

 “Sally is about to divorce me and will hardly speak to me.  Our sex life is non-existent, and I haven’t had a good’s night’s sleep in months.” Ron’s countenance sank to despairing lows as he continued to share the gory details of his shipwrecked finances. 

The more Ron talked the worse it got.  It became obvious that he was totally demoralized.  In spite of the successes he was enjoying in his career, Ron saw himself as a complete failure and inept leader in his home.  His self-esteem was completely shot.  Attempts to regroup himself were met with poignant reminders of his failures either from a hostile bill collector or his wife, who was obviously crushed by his clandestine spending habits.  And to top it all off, Ron lamented that if his medical school found out they would not graduate him because of an ethical standard agreement he signed when he enrolled in school.  While I had never heard of such a thing, apparently the contract required students to remain financially solvent throughout their education.  Ron’s anxiety was over-the-top.  His peace was thrown out the fiduciary window.  And he saw no way out other than bankruptcy which would most certainly end his promising medical career. 

            As Ron and I discussed his situation, I learned more about how he came to be in such dire straits.  Initially, he had received an offer to receive a credit card.  It had a low spending limit that he quickly maxed out with a purchase or two.  He made a few payments and the next thing he knows the company upped his credit limit.  The process repeated itself several times until his spending limit was up to $10,000! 

Next, while barely making his minimum payments, Ron was offered another credit card with a balance transfer option that offered lower interest rates.  “That makes sense.  I’ll get a lower interest rate and pay this mess off much quicker,” he thought to himself.  So off he went, with a plan.  He transferred the balance but somehow derailed from the plan and failed to shut down the first account.  He then used the first account again and the next thing he knows, he’s maxed out two cards!  Then the process repeats itself a couple more times until he now has six credit cards, all maxed out!  At this point no one is offering him credit and the nightmare begins.  Exit freedom and joy; enter bondage and anxiety.

Let’s just stop for a second and think about Ron’s logic for a minute.  Ron is trying to use borrowed money to pay off debt!  Sounds crazy, right?  But wait a minute.  This logic is immensely popular in today’s world.  The logic strikes a current day chord.   Many of the country’s stimulus package plans and bailouts are based on the same logic!  It goes like this: let’s borrow money to pay on bad debts that people can’t afford pay in the first place!  Huh!!!?

I have to admit that as I heard Ron’s story I wondered exactly how someone could wake up one day with over $40,000 of credit card debt. At that point of my life, I’d not had so much as a single late on my credit report.  I found myself struggling to be non-judgmental and not become condescending in tone.  But, as I would later learn, Ron’s story is not all that uncommon.  “What goes around comes around” as the saying goes. Perhaps my numbers weren’t as high but they didn’t have to be and neither does yours.  If you can’t pay your bills you can’t pay your bills.  You have become a slave to your finances.  The tail is wagging the dog and your life is reduced to chasing the almighty dollar.  Your true wealth is threatened and your life is now an uncomfortable, paralyzed existence.  It’s not what you wanted; certainly it’s not what God wanted for you, but here you are now firmly entrenched in the world of S&B …slavery and bondage!  Slave to your lender; bound to your debt.  Your credit rating is slipping and your world is changing as you insidiously lose your freedoms.  You no longer get the best interest rates and your cell phone company wants a large deposit before they’ll open an account.  Good sleep is hard to come by and it’s hard to look into the mirror, much less the eyes of your spouse, and muster up a good feeling about yourself! 

                                                                    excerpt  from 12 Pillars and a Prayer by M.Russell Thomas, PhD