Tuesday, November 1, 2011

Act Your Wage

Here is my sermon from Sunday. The text was Matthew 25:14-30:

Today we begin a thee-part sermon series entitled Faith, Hope and Money, which is roughly based on a series from Dave Ramsey. Now even though I said last week that this would be a series on money unlike you had ever heard, I’m sure that most of you probably didn’t believe me and that some of you even thought about staying at home. Because normally whenever we hear that the church is going to be talking about money we begin to hold onto our wallets a little tighter because what we typically hear from the church is that we should be giving and giving more. And I’ll be honest, I’ve preached those sermons and you’ll be sure to hear some of them during my time here.

But I think the church has done a tremendous disservice to itself, to you and to the very idea of stewardship by reducing stewardship to being about giving money to the church. Stewardship is about a lot more. The biblical witness for giving is to give a tenth of your income, but even if you are tithing, you still have 90% of your income that the church is not dealing with or talking about and that is a major mistake. The scriptures have a lot to say about money. Issues of money and possessions are covered more than 800 times in the Bible Did you know that Jesus talked more about money then he did about any other topic? Rev. Jim Wallace, who is one of the co-founders of the sojourners movement, who are commonly referred to as Red Letter Christians, said that he once took a bible and cut out all of the passages that dealt with money, wealth, or possessions, and there wasn’t a lot left to it. It was pretty holy, and not in the sense we normally think of the scriptures.

Now I am not a financial planner. I cannot tell you what you should be investing your money in or where, or what insurance policies you should have, although you should have insurance, or whether you should have a will or a living trust or a durable power of attorney, although you should have at least one of them as well. I do have a financial planner who has agreed to come out and do a presentation and answer your financial questions if people are interested. I will also tell you that I am not a completely disinterested party in this conversation. I know, and the church also knows although they have chosen to ignore it, that the better you are doing with your own finances the more money is available for you to give, but to increase your giving to more than just the church. The simple fact is if you are having difficulty making your mortgage or car payment of even putting food on the table then I know that your giving will also be radically decreased, and so we are going to work over the next three weeks on what we can do to get our financial situation in order. It has been said that personal finance is 80% behavior and only 20% head knowledge, and when you start it’s probably at least 90% if not 95% behavior.

Now normally finances are one of the hush hush things. It’s like sex, it is simply not something discussed in polite company, and certainly not discussed from the pulpit. If you are like most people it was also not talked about in your house growing up nor were you formally taught or educated by your parents about their own finances. That doesn’t mean we didn’t learn things because we definitely did. We heard things like, “there’s not enough”, “we can’t because we can’t afford it,” “You have to work in order to earn it”, or “don’t think about it, someone else will take care of it for you.” All of these things impact how we view our money and our relationship with money, and nearly all of us harbor deep fears that we are the only ones who don’t know what’s going on with our money or what to do with it. Financial planner Karen Ramsey, who is not related to Dave Ramsey, begins each of her lectures by asking by a show of hands, and we’re going to do this too, “How many of you feel that everyone else besides for you has money figured out?” By another show of hands, and this question comes from Dave Ramsey, “who here has ever done anything stupid with their money?” Good, now we’re being honest and honesty is the only place we can start. Suze Orman has said that one of the financial laws is that “truth creates money and lies destroy it.” So the first start to solving our financial picture is to be completely honest.

Roughly 7 out of every 10 people live paycheck to paycheck. That means that if they are to lose their income they don’t know how they are going to pay their bills, but 20% of Americans believe they will become millionaires in the next ten years, and I strongly suspect it’s the group living paycheck to paycheck who believe that. According to Money magazine, 78% of us will have a major negative financial occurrence in any ten year period, major being somewhere in the realm of $5000 up, but 33% of Americans say they do not have at least $1000 in savings to use in an emergency (I actually think this figure is probably too low). Only 40% of people say they track their expenditures and have a budget. 30% of people over the age of 25 say they have not saved anything for retirement, and of those who have, only 11% say they have more than $250,000 saved or invested. 59% of people have said they have never sat down to calculate what they will need in order to retire comfortably, and yet 58% of people think they will be okay. Half of all marriages end in divorce, and, according to a survey by Citibank, 58% of those who divorce say that money was the primary reason. Others have estimated that money may in fact play a major if not the major role in upwards of 75% of divorces. Now the church has been talking a lot lately about protecting the sanctity of marriage, and yet here we are told that if we could solve people’s money problems that we might be able to save half of all divorces, and maybe even 2/3 and yet the church isn’t doing anything about it, and I really have to wonder why?

I really believe it’s because we are afraid. The church is afraid to talk about it and we are afraid to talk about it. Again, money tends to be one of those hush-hush topics. I have been serving churches in a ministerial role for eight years, and in all that time I have never heard anyone lift up their financial concerns during prayer time, even when they could have done so anonymously. I have certainly heard people talk about their employment issues, although this too nowhere matches what’s really going on, but no one has ever said, “I don’t know how I’m going to pay my bills this week, and so I need to lift that up.” Not even anonymously. We don’t like to talk about our money, and a large percentage is driven by fear. Fear of the unknown and also the known, fear that we are the only ones who haven’t figured it out, fear that others will find out that we don’t have it all together.

Now I know that most of us feel like this, that our money comes in and goes right back out, and we hope that somehow, somewhere, that something will get caught, but normally it doesn’t. No one is opposed to savings, but yet we don’t save. We can’t just have wishful thinking about how we are going to save, we can’t have something where we say “a miracle happens here.” In Proverbs we are told “Precious treasure remains in the house of the wise, but the fool devours it.” If everything is just passing through then we are just devouring all we receive, we are the fool.

Now I know that many of you are going to say, “but I don’t have enough money to save, my finances are too tight as they are,” and the truth is you can’t afford not to save, because the longer you wait the harder it becomes. I know others will say, “I’m told old to begin saving now,” and I will tell you that you are never too old. If you are still alive then you can begin this, and even if you don’t think it applies then you can be talking with your children or grand children so they can begin getting ahead with their own finances.

There are three reasons to save. One is for emergencies. What did our grandma always tell us, we were to save for a rainy day. That is what Joseph does in Egypt. He warns the Pharaoh that there is going to be a famine and so they begin storing grain to protect themselves, they save for a rainy day, and it is what we should do as well. Dave Ramsey says that the way to start this is to create an emergency fund as quickly as you can of $1000 ($500 if you make less than $20,000 a year), but that is just a start, and remember this is not the I need a pizza or a new DVD player fund. This is for emergencies only. But the $1000 is just a start, most financial planners will tell you that you need to have anywhere between 3 to 9 months of expenses also, but that will take you a little longer to build up. This money will protect you in case you lose your job or something else happens that you are no longer in bringing in money. But it can also serve you in other ways, let’s say your car breaks down and you don’t have money saved up for repairs, then it also protects you against that. When you have an emergency fund then you no longer will have major financial crisis. Dave Ramsey jokes that when you are broke, when you don’t have an emergency fund, then your life will resemble a country song.

I can tell you that Linda and I are working on this, and recently had to replace all four tires on linda’s car. Instead of having to stress about how we were going to pay for it, since we didn’t have the money saved up for this, although we should have, but instead of using our credit card, we pulled the money out of our emergency fund, bought new tires and then set-up to refill our emergency fund. So we save for emergencies, or rainy days. If you are alive, there will be emergencies. God does not promise that it won’t rain, all we are promised is that we will no longer be drowned.

The second reason we save is in order to purchase things, you know like your grandma also told you to. When we save to pay for things it does several things. It stops us from impulse buys, and the average family of 4 spends $9,000 a year on impulse items, and it keeps us from going into more debt. And saving for purchases involves more than just paying for a new sofa. It also includes other things that are more regular like auto insurance, which we might pay only once or twice a year. Instead of being hit with the cost all in one month, we instead divide the cost by 12 months and save that amount each month. So if our monthly premium is $400, we save $33 each month so that when the bill comes due, we don’t have to stress about how we are going to pay the bill because we already have the money already in hand. It’s a novel idea I know.

The term often applied to this is called a sinking fund. The term was originally a way that the English helped pay off their national debt, but in modern usage a sinking fund is used by companies to help pay off debt, buy back stocks or bonds, and also for saving for major expenditures that they know they will incur as part of their operation, such as replacing machinery or the roof of a building. So create a sinking fund, although you can call it something else, in order to save money for expenses that don’t occur every month but that you know will come up, again such as insurance, or car repairs, vacations, Christmas, which comes every year on December 25th, I know we sometimes get surprised by this, or other presents. You know you will have these expenses so save for them so they don’t blow out your budget in one month or worse cause you to have to go into debt.

The final reason we save is to build wealth, and this is primarily for retirement. Today’s passage, which is commonly referred to as the parable of the talents, is normally interpreted as saying that God has given us certain gifts and skills and we to use are literal talents in serving the world. A good message and one I have preached myself. But a talent in Jesus’ time was a currency equal to about 6,000 denari, which was a day’s labor. So a talent is a significant amount of money. The first two men are willing to take a risk and invest their money in the world, whereas the final man hordes his talent, why because he is afraid. I think there is something to say to us about our relation with money.

Now, there are no get rich quick schemes to this. Proverbs says “a faithful man will abound with blessings, but he who hastens to be rich will not go unpunished.” The only person who gets rich with get rich quick schemes is the person selling them. If being rich were easy, everyone would be rich. It is hard. It takes time. Building wealth is a marathon, not a sprint, and so it involves putting money away and letting the power of compound interest do the trick and you need to start doing it as soon as possible. Let me give you just a couple of illustrations.

I’m 38, so if I had started investing $2000 a year, or $166 a month, starting at age 35 and did so until the age of 65. At age 65, I would have invested $60,000 and assuming I got 10% return, which is easier for calculations, it would be worth $419,569.95. If I had started at age 25, and invested $2000 for 40 years for a total of $80,000 my total would be $1,170,219.29, and I beat my 35 year old self by $750,000. If I had started at age 18 and put in $2000 a year until I was 25, and then never put in another dime, my investment of just $16,000 would be worth $1,332,752.55. The 18 year old investor who only invested $16,000 beat the 25 year old investor who put out $80,000 by $162,000 and the 35 year old by $913,000.

For the young people here today, do you understand what I just showed you? If you follow this simple advice I have just made you millionaires by the time you retire, and all it cost was $166 a month for 8 years. I know that those in here who are older than 25 would like to say something to you wouldn’t you? (do it now) Grandparents are you paying attention. Tell this to your children and your grandchildren and you can change their lives. Proverbs says “the good leave an interitance to their children’s children.” I think this about more than money. By educating your children and your grandchildren, and great-grandchildren about how to work with their money and how to make their money work for them, you can also leave an inheritance. PT Barnum said “Money is a terrible master, but an excellent servant.”

Now if you are older than 25, or 35 or 45, or even 65, is it too late to start? Absolutely not, as I already said, if you are still breathing you can be working this. Author David Chilton said, “the best time to plant an oak tree was twenty years ago, the next best time is now.” Don’t wait.

Now for those who still say they can’t afford to do this, that your budget is already too tight, as I already said, the simple truth is you can’t afford not to do this, (not a true $1 to $1 deduction, about .70, and if your company matches then it’s even better, many will match 50%, so you’re getting $1.50 of investment for 70 cents, it’s a great deal,) the easiest way is to pay yourself first. Why does the IRS take your money before you ever get your check? Because they don’t trust you to save the money in order to pay your taxes at the end of the year, and so they have you pay them first. The government is very smart in this, follow the lead of the government. I know you never thought you would ever hear anyone say that the government is smart when it comes to their finances, but they are smart about this. Pay your self first, take the money right off the top. You cannot spend money that you never receive. You should also be doing this with money you give to charities, but we’ll save that for later. Don’t wait until the end of the month in order to see if you have anything left in order to save it, do it first, do it first, do it first. Is that clear enough.

Now I’m sure that some of you are still saying, “that’s great John, but I still have more month left than I have money and if I do this I’ll have even less money and more month. I just can’t do it.” And I’m here to tell you that you can and you must, and by paying yourself first will help you because you can’t spend what you don’t have. We cannot begin to control our spending or increase our saving until we understand our spending and we cannot begin to act our wage until we understand where our money is going, which we will spend more time looking at next week. Proverbs says “the plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want.” We are taking the first steps of diligence, to financial diligence. Dave Ramsey always concludes his radio program by saying “There is ultimately only one way to financial peace, and that is to walk daily with the Price of Peace, Christ Jesus.” May it be so. Amen.

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