From the monthly archives: June, 2016

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Can you earn $100 million dollars and be broke?

After four decades of TV stardom, David Hasselhoff says he cannot pay court-ordered alimony. He claims that he’s only got $4,000 in cash to make his monthly $21,000 payments to ex-wife Pamela. She claims that is impossible because he has over $100 million in earnings.  While we will have to wait for the courts to determine if David is broke and whether Pamela will get her quarter of a million dollars in annual alimony, there are lessons to be learned here.  First, divorce is very expensive. Never believe you will be better off if you get a divorce. The average divorce in America causes a steep dive in overall net worth for both the husband and wife. The Bible says God hates divorce and for anyone who has been through it, you understand why he said it.  Second, while celebrities earn lots of money we continually read of stories of them going broke. Proverbs 13:11 says, “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it”. While it loo ...

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Should you “re-cast” your mortgage?

I was recently asked if “re-casting” was better than “re-financing” a home mortgage.  Let me explain the differences.  Suppose you have $5,000 and want to apply it towards your mortgage.  A recast is when you use that money to reduce the unpaid principal balance of your loan and lower the monthly payment. In this case, your loan term and interest rate remain unchanged. However, re-amortizing the loan based on the newly reduced principal amount would result in a lower monthly payment.  According to bankrate.com, “Typically, only fixed-rate loans can be recast, but adjustable-rate loans may be considered on a case-by-case basis." Now, if you used that $5,000 to refinance your mortgage, you would have to spend your cash on getting a brand new loan at a lower interest rate.   If you have extra cash to apply towards your mortgage and need to lower your monthly payments, recasting is a good option. If you don’t need to lower your monthly pa ...

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Are you approaching retirement age? Today I have some advice for you.

About 10,000 people a day are reaching retirement age in America.  This can be good news or bad news depending on your plans.  Let me tell you a story.  A 62 year old friend of mine recently had a colonoscopy and was told to spend two days at home recuperating, so he went home and tried to rest. Since he could not sleep, he found himself awake just thinking about all he needed to be doing at the office.  By 1:00 in the afternoon, he decided it was better to go to the office than to try to lie in bed at home. He is very concerned about what he is going to do in retirement if he could not stay idol at home for a few hours after a surgery!   The best advice is to plan on re-purposing, not retiring. A re-purposing mean you have found a place to serve that brings you joy and you can remain passionate about it.  Just because we are over 65 does not mean we need to consider the final years of our life a long vacation. Most people get bored with too much leisure and entertainment. We ...

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Can you save a few crumbs today?

With so many Americans reporting that they are burdened by excessive debt and worried about making ends meet, I have a simple plan for you today.   Set a goal to save $1000, and put it in an Emergency Savings Account. Here’s the key. Do this before you start paying off debt. It is more important to have some cash in the bank set aside for unexpected expenses than to make an extra payment to reduce debt if you don’t have any financial margin.  Here’s the reason.  If you don’t have money in the bank, you will pay down your credit card and then fall back on it for emergencies. That cycle will go on and on and on. It is expensive to live that way.   Remember this, the pain of the discipline to save $1,000 is far less than the pain of living without $1,000 in an Emergency Savings Account.  Now listen carefully: Don’t start tomorrow. Start today. Set a goal to save some small amount of money every day until you reach this goal. Then, listen carefully, if you ...

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Are Your Thoughts Ever Preoccupied with Money?

People who think about money often are usually in one of two groups: those that have very little and are in constant need or those that have a lot and are in constat preoccupation with using it and preserving it.   Both sides, the rich and the needy have a similar problem: they have lost their contentment.  It is my view that God wants each of us to have enough. And enough in my books is defined by having the amount of money necessary that you don’t have to think about money anymore. Let me explain.  If you are needy, you won’t quit thinking about money until your financial needs are met. If you are rich, you won’t quit thinking about money until your heart's needs are met.  Interestingly, both of those needs are met by an increase in trust in God. The needy must trust God to provide through hard work and careful stewardship, and the wealthy must trust God to release them from worry and stress through careful stewardship.  I believe God wants us to keep our ...

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Are You a Financial Prodigal?

Christians know the beautiful Parable of the Prodigal Son as a heart-rending story that demonstrates the radical love and grace of God. Yet, most of us fail to see that the story is replete with valuable lessons from the financial mistakes made by this prodigal.  In Luke 15, Jesus begins the parable by introducing a man with two sons. The younger one made a demand to his father. “Father, give me my share of the estate.”  The brazen young man was essentially communicating to his dad that he preferred money over a relationship with his father. Now before we move on, I hear this often in the circles of those spewing out the false doctrines of the prosperity gospel, the health and wealth crowd. If you are a parent, how would you feel if your child demanded of you, “Give me my stuff! I don’t care about you, I just want the stuff!” This is the prosperity gospel, and it is an affront to God, the giver of all blessings, when we demand the bread but want not ...

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Is identity theft insurance a good idea?

We hear lots of folks pushing the latest insurance product – identity theft protection insurance. Yes, the Federal Trade Commissionreports that identity theft has been the #1 consumer complaint for 14 straight years, so there is reason to believe this may be very helpful coverage to buy. But not so fast.  As they say, the devil is in the details.  According to an article in the US News and World Report, some policies may not be worth the cost of the insurance. “The National Association of Insurance Commissioners says the typical cost of identity theft insurance ranges from $25 to $60 per year.  That’s not bad. The insurance may include credit alerts, account and credit monitoring, and reimbursement for the costs associated with repairing your credit history if you become a victim. Many have deductibles requiring you to pay the first $100 to $500 of costs required to restore your financial good name. The NAIC says most policies typically have benefit limits ranging from ...

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Are you worried about your student getting a college education that never leads to a job?

I believe today’s graduates are on the verge of suffering through another economic bubble poised to burst – a college debt bubble. Too many graduates will owe more for their education than they can afford to pay back. According to the Wall Street Journal, 2016 college graduates broke the debt record, leaving college today with an average debt of $37,172.  With so many graduates burdened by debt, it’s important to make a plan ensuring their investment pays off. I believe parents and students need to seek experienced counsel before going into debt. Proverbs 15:22 notes, “Plans fail for lack of counsel, but with many advisers they succeed.” Get Counsel on Your Best Skills. We are all “fearfully and wonderfully made” by a loving God who intended us to accomplish His purposes on this earth. Crown has developed Career Direct as an assessment tool to understand a person’s unique gifts and talents, the true foundation of a career. Getting ...

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You are not a millionaire. Here’s why…

I hope my statement caught your attention.  You are not a millionaire unless you have a net worth of one million dollars or more. Okay, we all get that. But let’s say that you actually have a net worth in excess of one million dollars. Now are you a millionaire?  Uh, not if you are a Christian.  Far too often, money is used as a source of our identity. This is especially true for those who are apart from Christ.  But in Christ, our identity is not derived from anything external. We are children of God, servants, ambassadors, citizens of heaven, fools for Christ and stewards of the Master and Creator of the Universe. Why would we want to be known for something as temporal as our financial condition?  Now listen carefully: You may have lots of money, or you may have no money at all. Those conditions are not who you are. You are not a rich man or a poor man. Don’t allow the world to give you that identity. You are a man or woman who belongs to Christ and He has promis ...

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We all know Jonah was swallowed by a great fish but do you remember his financial mistake?

In the book of Jonah, we learn the reason for the prophet’s round trip journey to the bottom of the ocean and back. Jonah was running away from God’s call on his life. But don’t miss this financial detail recorded in chapter 1 verse 2. “But ---Jonah ran away from the Lord and headed for Tarshish. He went down to Joppa, where he found a ship bound for that port. After paying the fare, he went aboard and sailed for Tarshish to flee from the Lord.”  This reference to Jonah’s financial decision has significant implications for each of us today. More often than we care to admit, we Christians use our financial resources in a manner that leads us away from following God.  Let this remind us that all our financial decisions have gravity. The time and attention they require can distract us from listening to and even obeying God.  May we never let money be an excuse to run from God’s call. Ephesians 5:15-17 says it like this: “Be very careful, then, how ...

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