Finance 101a

So, if the big four are income, expenses, assets and liabilities and we want to have more of our income come from assets (than for example our labor) how do we do that?

Well, you could inherit assets, or you could win them in the lottery, or you could do what most people do, buy them. You use you income to purchase things that make income. It seems simple, but as lots of authors have pointed out, most people are focused on buying liabilities instead.

Liabilities are things that make expenses, like houses and cars. You may have to have them, but they use up income. And if you only use your income to buy liabilities, at some point you will either have to go into debt, by getting a mortgage, home equity, credit cards, or a loan shark, or you will have to make more money by working harder, longer, or have more than one job, or one that pays more.

On the other hand, if you use your income to buy assets, they don't use income and they generate income, meaning over time you have more income, without working harder and longer. Hmm.

So to get there from day one you have to crreat a plan to use your income to buy assets. You have to determine a portion of your income for asset buying and you have to do it first and do it always. And that, most often, requires at least one of two strategies, a budget that determines a set amount that you religiously buy assets with, or a process that scoops up the first fruits of your income and buys the assets without much work on your part.

Finance 101

So, there is income, expenses, assets and liabilities.

I know this wildly simple but it seems to me it is also an essential understanding that so many people miss, especially those of us who never really got a financial education.

Income is the money that comes to you from all sourses: wages, interest, divideds, rental income and sales.

Expenses are what you pay out: mortage, rent, purchases, utilities, etc.

Assets are things that bring you income: income property, employment, stocks, bonds, education, businesses

Liabilities are things use up income: taxes, housing, education, cars, boats

The challenge is to have more income than expenses and more assets than liabilities.

Remember, this is finance 101, and to be sure, its easy to think and talk about than do!

The Pastor's Column

Neither Borrowers Nor Debtors Be!

The bible doesn’t think much of debt, whether the debt is sin or money. People often ask about the line in the Lord’s Prayer where we say, “Forgive us our debts as we forgive out debtors.” The word debts and debtors is about sin, that is, we want God to forgive our sins in the manner in which we forgive the sins of those who have sinned against us. (Kind of a risky request!)

But the bible is also not too fond of the other kind of debt, the kind where you owe money. In fact, not only is the bible not fond of owing debt or holding someone else’s debt, it is also flat out against usury, the charging of interest on debts.

So what’s a good follower of Jesus to do? Well for one, don’t get into debt, and for another, get out of debt as fast as you can. Why? Because not owing people money or having them owe you is much better for relationships. More relationships and more marriages end over money disagreements than anything else!

And then there is that pragmatic thing. Did you know that an average American pays $600,000 in interest over their lifetime? (See http://www.creditloan.com/infographics/a-lifetime-of-debt-the-financial-journey-of-the-average-american/) Think about that.

If you instead of paying out interest, instead saved money and then paid in cash, putting the interest you would have spent into an investment that paid 6% you could save over half a mission dollars in forty years. (Check out Dave Ramsey’s investment calculator at http://www.daveramsey.com/article/investing-calculator/lifeandmoney_investing/).

I know, not using debt to pay for things is really hard. Maybe we should consider it a Spiritual Discipline, a practice that is making you more and more like Jesus; like prayer, reading your bible, and attending worship. See you Sunday.

Flood ideas and thoughts

Several people have asked about the Emergency Response Team helping some of the many folks in need. We have had a few folks say they are willing to go when I team gets going, but so far we don't have leaders who feel called to this kind of ministry and have some experience and leadership skills. When those leaders emerge we will get together to talk about what should be done where.

In the mean time, we can respond to local and regional needs because of the flooding. Begin to think about ways you would be willing to respond, what you might have to offer in terms of time, skills, experience and resources? Flood buckets can be assembled, American Red Cross training can be taken, a skills bank can be put together.

Several of our trades people have been helping folks without payment because they are so overwhelmed. What can we do to support those trades people so they can use their skills to God's glory but still be able to put bread on their own tables?

Start on your knees and then get up and do something!

One idea in already is a furniture rummage sale with flood victims getting first choice. A way to get rid of your over stocked furniture, while helping people who have been flooded. This project has it share of challenges, but it's an idea. What's yours?

Discussion Point: Why I am not a Christian

Here is a funkly little article that may get you to think.
http://catchjohnfischer.wordpress.com/

It suggests that tell people you are not a Christian, but a follower of Jesus may open up doors to conversation that would amaze you. The author posits that most people who are turned off to Christianity are not necessarily turned off by Jesus.

So where do you fall on this discussion? Are you a Christian or a follower of Jesus? What are the pitfalls of labeling yourself a Christian in this culture?