Financial Update

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Financial Update
Lakeland Mens Ministry December 11, 2008
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• This presentation is intended to provide general
  financial education and principles.
• This presentation is not intended to provide
  financial advice or specific recommendations for
  any individual.

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Agenda

• Economy/Market
• Biblical Principles for Money
• Contentment in Troubled Times

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The Markets

• Market is down and up
• Down yesterday
• Up today
• Dow/SP down 35 for the year down 45 from peak
  in Oct. 2007

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The Economy

• US and many world economies in slowdown/recession
• US 4th quarter GDP down estimated 4.0
• US Government debt is approaching 13T
• 38,000 per person
• Bailout plan is 700B
• President-elect Obama Plan T???

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What Happened?

• Consumer is overextended
• Consumer spending is 71 of the economy
• Home prices no longer increasing
• Mortgage defaults will reach all time high
• Unemployment increasing projected to 9 next year
• Banks no longer willing to loan

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What Happened?

• Crisis on Wall Street
• Merrill Lynch, Bear Stearns no longer private
• Goldman Sachs, Morgan Stanley no longer
  investment banks
• Lehman bankrupt

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Deleveraging of the Economy

• Without debt
• People stop buying
• Companies stop building and selling
• Economies stop growing
• Nations stop trading

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Where did we go wrong?

• Focus on self, not others
• Got to have it now
• Temporal vs. Eternal

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Where did we go wrong?

• We left Gods principles
• As a nation
• As a culture
• As a church
• As a people

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Two Competing Perspectives

• Eternal - Biblical
• Build wealth slowly
• Long term horizon
• Saving/Investing First
• Time is a tool
• Cycles are Inevitable
• Diversification

• Temporal - Worldly
• Get rich quick
• Short term focus
• Spend/Consume first
• Time is an Enemy
• Upward Trend Hopeful
• Timing Strategy

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Pauls Words of Encouragement

• Command those who are rich in this present world
  not to be arrogant nor to put their hope in
  wealth, which is so uncertain, but to put their
  hope in God, who richly provides us with
  everything for our enjoyment. 1Tim. 617

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Key Biblical Principles Of Finance

• God owns it all.
• Spend less than you earn.
• Avoid the use of debt.
• Set long-term goals.
• Have a savings plan
• Give generously

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God Owns It All

• He can take it when he wants it
• Every spending decision is a spiritual decision
• Stewardship cant be faked

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Biblical Stewardship

• The accomplishment of God-given goals
  
  
  using God-given resources

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Spend Less Than You Earn

• Understanding wants versus needs
• Anything can be justified
• How do you decide between wants and needs?
• Dont be deceived by the American Dream

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Five Uses of Money
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Avoid the Use of Debt

• Cant serve two masters Prov. 227
• Debt reduces your options and flexibility
• Current debt crisis is a result of not heeding
  this
• Have a plan to repay

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Avoid Debt

• The rich rules over the poor, and the borrower
  becomes the lenders slave. Prov. 227
• Do not be a man who strikes hands in pledge or
  puts up security for debts if you lack the means
  to pay, your very beds will be snatched from
  under you. Prov. 2226-27

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Have a Long Term Plan

• Longer term your perspective the better your
  decision making
• Man makes his plans, but the Lord directs His
  steps Prov. 219

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Build Margin

• Build a savings plan
• For unexpected emergencies
• For major purchases
• For opportunities to meet the needs of others

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Investment Decision-Making Process
DECISION 1 REVIEW YOUR DEBT LOAD Have you
repaid all short-term debt?

• IF NOT
• Think about
• Using any surplus cash
• Liquidating an existing investment portfolio
• Liquidating existing retirement fund (if
  necessary)

YES, I AM DEBT FREE.
DECISION 2 EVALUATE YOUR CASH POSITION Is it
adequate?
IF NOT Think about moving into a more favorable
position by keeping your cash liquid and not
investing.
YES, MY CASH POSITION IS ADEQUATE.
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Investment Decision-Making Process
DECISION 3 ASSESS YOUR CURRENT INVESTMENT
PORTFOLIO Do you need to make changes to your
personal investment or retirement portfolio?
IF NOT Maintain your balanced and diversified
investment strategy.
IF YES
DECISION 4 MAKING CHANGES What is your risk
tolerance? What is your time horizon? Should you
reposition to more conservative portfolios,
securing some gains? Should you exit the market
for a specific period of time?
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Give Generously

• The amount of money you have has nothing to do
  with financial security or contentment. Neither
  can satisfaction be found in wise investments,
  careful budgets, or debt-free living. Instead,
  the secret to financial freedom and joy is
  directly linked to one thing the willingness to
  be generous with what you have.

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Pauls Hope

• 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. I Timothy 618-19

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Giving

• Acknowledges that God owns it all
• Breaks the power of money
• Gives us an eternal perspective
• Tangibly meets the needs of others
• Principle Give generously

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Giving

• Thoughtful, Voluntary and Worshipful
• - Let each of you do just as he has purposed in
  his
• heart, not grudgingly or under compulsion, for
• God loves a cheerful giver. (2 Corinthians 97)
• Where
• - The local church (Galatians 66)
• - The Great Commission (Matthew 2818-20)
• - The poor and needy (1 John 317)

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Why Christians Dont Give More

• Owners vs. Stewards
• Financial Problems
• Limited Vision
• Limited Relationships

• Dont Know They Can
• Dont Know How To
• Dont Plan To

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Pauls Caution

• Timothy, guard what has been entrusted to your
  care. Turn away from godless chatter and the
  opposing ideas of what is falsely called
  knowledge, which some have professed and in so
  doing have wandered from the faith. Grace be with
  you. 1 Tim. 620

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Summary

• He has given principles to live by in good times
  and bad
• Our perspective should be eternal
• Give generously