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Showing posts with label mortgages. Show all posts
Showing posts with label mortgages. Show all posts
Saturday, November 2, 2013
Does God Want You Rich?
Friday, January 11, 2013
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!
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!
Tuesday, December 11, 2012
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?
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- 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.
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- 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
Wednesday, May 30, 2012
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 5th 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:
- 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.
- 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.
- 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!
Friday, May 18, 2012
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!
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!
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