Dear Chuck,
I’ve been hearing a lot about Evergrande and the Chinese economic woes for months. Should I pull out of my investments in Chinese companies?
Investor Worries
Dear Investor Worries,
Having traveled to China on a number of occasions, I have long been aware that there was a housing bubble, a debt bubble, and a culture plagued by corruption. Evergrande may be the first of many corporate failures to come. Let’s take a look at it first, and, then, I will give my answer to your investment question.
Problems in the 2nd Largest Economy in the World
Evergrande was founded in 1996 in Guangzhou, southern China. It is huge. It has been considered the most valuable real estate company in the world since 2018. The real estate division owns more than 1,300 projects in more than 280 cities across China. In addition, it has investments in electric cars, food and drink manufacturing, a soccer team, a theme park, an internet and media production company, and ironically, wealth management.
It is the most debt-saddled property developer in the world with more than $300 billion in liabilities and $90 billion in debt. The conglomerate is plagued by money problems evidenced by unfinished residential buildings and unpaid suppliers and creditors. Home buyers have sued because their prepaid apartments have not been completed.
Real estate accounts for as much as 30% of China’s GDP and 20% of the workforce. However, there are many empty buildings and ghost cities throughout the country. I have seen them. I also know that these speculative real estate projects were often pre-sold to eager Chinese investors.
Last year, the government implemented a “controlled demolition” of the real estate bubble with “three red lines” that aim to reduce real estate debt, eliminate reckless borrowing, and prevent a major market correction. The question is whether or not it is too little, too late.
Joseph C. Sternberg at the WSJ reports: “An aging and potentially shrinking population finds itself fantastically over reliant on property-linked borrowing to fuel current economic growth, and on the underlying property as a store of savings from which to finance the middle class’s needs in its impending retirement.” He explains that “redirection of the economy’s savings into property ‘investment’ saps productivity growth over time because real estate is a less productive asset than a factory or a research-and-development lab.” The government wants to “curb their property market as part of a program to break the feedback loop between rising property prices, falling productivity, lagging economic growth and social instability.” He continues to elaborate and wonders how many other nations could experience a similar crisis.
Evergrande, the First Domino to Fall?
Evergrande borrowed heavily to finance aggressive pursuits. Then, the demand for new apartments declined, and regulations were imposed. The handwriting was on the wall, and the company warned investors of cash flow issues and the possibility of default. Not surprisingly, the stock has plummeted.
The impact remains unclear, but there are varying predictions:
My Take on It
I don’t know what is going to happen to the company or how the Chinese economy will fare. I do know that we can learn some important lessons from it.
Evergrande reveals the danger of borrowing in a climate of unrestricted real-estate speculation. In Business by the Book, Larry Burkett wrote: “Borrowing is not prohibited scripturally, but neither is it encouraged. It is always present in a negative context and with many warnings about its misuse.”
He gave three scriptural principles Christian businesses should heed:
The debt lesson: Evergrande broke all three scriptural principles. It is doubtful that lenders or investors will be able to avoid great losses.
The integrity lesson: A number of Chinese companies have falsely stated their financial strength in recent reports to investors. We should never invest where the truth is not upheld by management or in nations where there is a long history of corruption.
The greed lesson: Many American investors have rushed to be a part of the massive growth potential of Chinese-based companies. Yes, their market potential dwarfs all others, but looking at higher returns often blinds us to the real risks related to the investment. Have we somehow overlooked the fact that these companies are based in a Communist nation? History demonstrates that companies have greater long-term success where capitalism, free markets, and a culture of transparency are the norm.
Obviously, I would not recommend investing in companies that are potentially controlled by the Communist Party, no matter how promising the returns may look.
I hope this is helpful. Thanks for your question. If you need guidance on addressing debt woes of your own, please consider contacting Christian Credit Counselors. They are a trusted source of help.
This article was originally published on The Christian Post on October 15, 2021.
Dear Chuck,
I have been a saver for years. I was recently accused of hoarding money. What constitutes hoarding?
Super Saver
Dear Super Saver,
I am so glad to know that you save because so many do not. A year ago, Fool.com surveyed 2,000 Americans and found the following:
God wants us to save so that we have the resources to care for our family and those He puts in our paths. He also wants us to be free to serve Him as needed. Saving does not represent a lack of faith but reflects the heart of a faithful steward. Joseph instructed Pharoah to save for the coming famine, and the Proverbs point us to the wisdom of the tiny ant.
Saving vs. Hoarding
To know if you are in fact hoarding involves three simple questions:
Are you saving more than you are giving?
Do you acknowledge God as your provider?
Would your peace and security be threatened if you were to lose all of your savings?
People hoard money because of insecurity or pride. They may suffer from:
Give First, Save Second
The Lord is a giver and wants us to be conformed into His image as givers. Giving is our first and highest priority with money.
When we save a higher percentage of the money He provides than we are willing to give, we are in danger of hoarding. If you give and save in equal proportion, that is acceptable, but it is even better to give more than you save to avoid the danger of becoming dependent on your savings account and not the Lord.
Saving turns into hoarding if you do not trust God to provide. If you are anxious about money, perhaps you are not remembering the words of Jesus: “Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? And which of you by being anxious can add a single hour to his span of life?” (Matthew 6:26-27 ESV)
Hoarding is driven by insecurity that leads to idolatry—trusting a bank account more than God. Everything is then held tightly, and generous sharing with others does not occur. This is contrary to Biblical financial stewardship. We are to manage what He provides by preparing for the future while giving generously.
Save, But Trust Him
God wants us to depend on Him. He asks us to work, give, spend wisely, save, and invest because it is good for us. The key is doing so with the right motive. Pray, and ask the Lord to lead you in each of these areas so that hoarding is never an issue.
“… do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God. And the peace of God, which surpasses all understanding, will guard your hearts and your minds in Christ Jesus.” (Philippians 4:6-7 ESV)
“Some trust in chariots and some in horses, but we trust in the name of the Lord our God.” (Psalm 20:7 ESV)
“God is our refuge and strength, a very present help in trouble… ‘Be still, and know that I am God. I will be exalted among the nations, I will be exalted in the earth!’” (Psalm 46:1, 10 ESV)
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” (Matt. 6:19-21 ESV)
“…for I have learned in whatever situation I am to be content. I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need. I can do all things through him who strengthens me.” (Philippians 4:11b-13 ESV)
I hope you will truly trust God and learn what the Bible says about money. You can miss opportunities to grow money by simply accumulating and stashing it away in a savings account. Interest rates are low right now, so consider ways to manage it wisely.
Crown.org has articles, radio spots, podcasts, and online courses to help you gain a proper perspective on finances. I recommend you set specific short-term and long-term financial goals with a defined purpose for giving and saving that brings glory to God, blesses your family, and helps others.
This article was originally published on The Christian Post on October 8, 2021.
Dear Chuck,
Since my money is obviously buying less and less, how do I wisely invest in an inflationary economy?
Fearful Senior
Dear Fearful Senior,
While I am not an economist, I am an investor. I believe you have expressed a very relevant concern for all of us, not just seniors.
We have experienced years of low inflation. The last time I remember a period like this was in the late 70’s to early 80’s. But inflation is definitely on the rise and is creating uncertainty in the minds of many consumers and investors. In fact, a recent article by my friend, Jerry Bowyer, describes 2021 as “the year of inflation.”
A Broad Concern
Although Federal Reserve Chairman Jerome Powell believes that inflation is only temporary and will be short lived, Forbes.com gives 3 reasons why they believe an inflation surge will continue:
Consumer sentiment fell a sharp 13.4% from July to August according to the University of Michigan, Surveys of Consumers. Losses were widespread across all demographic groups, regions, and economic outlooks. Consumers’ opinion of current economic conditions dropped 7.1%, and the index of expectations dropped 17.6%. Reactions were due to the Delta variant, slower wage growth, smaller declines in unemployment, and… higher inflation.
In August, MarketWatch’s Jeffrey Bartash reported: “The rate of inflation in the U.S. rose again in July and drove the increase over the past year to a 30-year high.” The website referenced the advice of several professionals.
Ramit Sethi: “Investing is the single most effective way to get rich. Inflation can be bad for individuals when you just keep your money sitting in a bank account and do nothing else with it.”
Tiffany Lam-Balfour: “If you’re invested for the longer-term in a well-diversified portfolio, you’ve likely already got inflation protection built in. Staying invested and not holding too much cash are two sound ways to fight against inflation.”
Follow God’s Advice
The key to investing in an inflationary economy is diversification. It is the means by which wins can cover losses. Mixing different assets and investments is a way to limit your exposure to risk and provide a hedge against volatility. Solomon wrote about it in Ecclesiastes:
With diversification, short-term gains may be limited, but long-term gains can be higher. Plan to invest some time to research and monitor your portfolio. Find ways to limit high fees and commissions by looking for value that you can buy and hold.
Stocks can be a good investment during inflation, but you must do your research. Look for well-managed companies with a healthy cash flow. Some people hedge inflation with investments in rental property. This requires knowledge and careful timing to lock in a low-rate mortgage where property values are expected to rise. Make sure you study the benefits and risks. Remember, investing is not gambling or guessing!
You can make money by wisely investing during an inflationary period. Sam Swenson at The Motley Fool sees it as an opportunity to reexamine your portfolio and make necessary adjustments. Bottom line: Prepare now so you can avoid the continual erosion of your purchasing power.
I have included below a few of the websites that can be helpful to you as you manage your investment decisions. Thank you for writing. I hope this will reduce your fears and help you be prepared for the days ahead.
Helpful Resources from a Christian perspective:
Others: Business Insider, Forbes, and The Motley Fool
My latest book, Seven Gray Swans: Trends that Threaten Our Financial Future, is an essential read for those wanting to keep an eye on the economic threats we face in our nation. Many of these trends seem to be accelerating now. The e-book is available at Amazon.com.
This article was originally published on The Christian Post on October 1, 2021.
Dear Chuck,
Should I buy a used car now? I’ve been told to just buy new, but I don’t want a car payment.
Needing Transportation
Dear Needing Transportation,
My perspective is that neither is a good option right now. I suggest you try to hold off until market conditions change. Some context will help.
A Unique Time for Vehicles
Prices in used-car listings are up significantly over the same time last year—some as high as 30%. Remember, most often used-car prices drop! I have never seen a time in my life that used-car prices went up!
It’s a great time to sell a used car, but the reality is that you will have to pay more to replace it. Dealers are buying used cars, but they will pressure you to finance a new one. That’s why I advise you to step back and wait.
In June, Bloomberg reported that higher prices for used cars contributed to the rise in U.S. inflation. Used cars and trucks were up 10% in April and 7.3% in May and were responsible for one third of the rise in consumer prices. The reason is due to a lack of supply.
Several factors are involved. When Covid-19 hit our nation, people fled cities to work remotely. Without the convenience of public transportation, they needed to buy vehicles. Also, rental companies sold their inventories when travel dropped. Once restrictions were lifted and travel resumed, they purchased used vehicles to meet the demand. But, the primary reason affecting the prices and limited supply is a semiconductor chip shortage.
We used to lead the world in making chips. Now? We produce zero. According to a Wall Street Journal report, 92% of the world’s most sophisticated chips are made in Taiwan. America has a serious chip problem that not only affects the used car market, but it is also a national and economic security risk.
According to Techxplore.com, the tension between the U.S. and China contributed to the shortage. Chinese tech giant, Huawei, began stockpiling semiconductors before sanctions due to espionage allegations prevented selling to them. Other companies followed their lead, further reducing supplies. This summer, the Senate voted through $52 billion in subsidies for chip plants. But, it typically takes two-and-a-half years to build one. MarketWatch predicts that vehicle inventory due to the chip shortage will not recover until 2023.
Tim Healy of TheTruthAboutCars.com said, “If someone came to me right now and said they wanted to buy a car, I’d advise them to wait…And if my hypothetical acquaintance insisted on buying used, I’d tell them they’re crazy (unless, of course, they couldn’t wait to get a car).”
How to Buy a Car
Hopefully, the market conditions are temporary. When it comes time to buy, consider my guidelines:
It is possible you can buy a good used car from an individual or family member who is not concerned about getting top dollar. Just remember to buy a car you can truly afford. Doing otherwise is one of the main mistakes that lead to debt.
While waiting, save your money, be grateful for what you have, and do your research. Ask the Lord for patience, wisdom, and discernment so that when the time comes, you can make the right purchase. Be smart so you can buy smart.
“An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge.” (Proverbs 18:15 ESV)
Also while you wait, if you need help getting your credit in order, Christian Credit Counselors is a trusted resource that seeks to free individuals and families from credit card debt.
This article was originally published on The Christian Post on September 17, 2021.
Dear Chuck,
I don’t agree with the political views of my company. They voice their views; yet, I think I would be fired if I voiced mine. I want to keep my job, yet I want to distance myself from their positions. Any advice?
Silent Dissenter
Dear Silent Dissenter,
Many are wrestling with this same issue. I have friends working with iconic companies, such as Delta Airlines, Coca Cola, and large Silicon Valley firms, where they feel equally conflicted. The companies do not represent their values or their political views, but they feel powerless to speak out.
More and more, we are seeing examples of corporate activism and people losing their jobs if they step out of line with their company’s political leanings. For example, Saturday, September 4th, John Gibson, CEO of Tripwire Interactive, tweeted support for the strict Texas abortion law that passed last week. It resulted in his “stepping down from the company.”
A Corporate Shift Left
The Heritage Foundation hosted a conversation with Andy Olivastro, a leader with significant experience in very large corporations. He said, “I think there was an assumption for a long period of time that the boardrooms of corporate America were largely aligned with what might be traditionally conservative or Republican issues. And whether that was once true or not, it is no longer the case.”
A Time to Speak and a Time to Keep Silent
Solomon said in Ecclesiastes that there is a time and a season for everything, including when to say something and when not to say anything. It is good that you are wrestling with this to make certain you are following the Lord’s conviction and are not having an emotional reaction fraught with unintended consequences. Here are a few thoughts to help you shape your decision.
A Case for Remaining Silent
Often, we simply want to be heard and become anxious when we do not speak out against an issue. But remaining silent may be exactly what the Lord desires so that you are in a better position to make a difference long term with the company. For instance, Joseph had a tremendous influence on Pharaoh, by submitting to the Lord’s timing. Daniel had a tremendous influence on Nebuchadnezzar, by submitting to the Lord’s timing. As a result of waiting, their influence over evil rulers saved many lives. Additionally, Jesus waited for the Lord’s timing before making His deity fully known.
A Case for Speaking Out
Esther was urged by Mordecai to use her voice and influence to defend the Jews against a deadly decree. But she did not think the timing was right. This exchange, recorded in Esther 4, is a powerful reminder of our need to seek God’s will and not our own.
Esther 4:12-14 says, When Esther’s words were reported to Mordecai, he sent back this answer: “Do not think that because you are in the king’s house you alone of all the Jews will escape. For if you remain silent at this time, relief and deliverance for the Jews will arise from another place, but you and your father’s family will perish. And who knows but that you have come to your royal position for such a time as this?”
Convinced, Esther sought the Lord and made a plan.
Esther 4:15-16 says, Then Esther sent this reply to Mordecai: “Go, gather together all the Jews who are in Susa, and fast for me. Do not eat or drink for three days, night or day. I and my attendants will fast as you do. When this is done, I will go to the king, even though it is against the law. And if I perish, I perish.”
Esther’s decision to speak out put her life on the line. She accepted the consequences if her plan did not go as hoped.
Salt and Light
Christianity has always been at odds with culture—not just corporate culture but the entire unredeemed world. Yet, believers are called to serve as salt and light in the darkness that surrounds us. We must never compromise Truth or God’s call on our lives, but we must be wise and discerning. How can you have the greatest influence? Should you speak out, or should you guard your job and privately support causes that will impact the kingdom and the culture?
In his book Why You Think the Way You Do, author Glenn Sunshine says: “In political life, we must keep the importance of the image of God shared by people of all nationalities front and center in our thinking. But we must be careful. Christ’s kingdom is not of this world, and it will never be ushered in through political power. Instead, we must live lives consistent with our faith, and thus by our concern and our action on behalf of others we will earn the right to be heard.”
Pray for your co-workers and superiors, and ask God for favor, “…always being prepared to make a defense to anyone who asks you for a reason for the hope that is in you; yet do it with gentleness and respect, having a good conscience, so that, when you are slandered, those who revile your good behavior in Christ may be put to shame.” (1 Peter 3:15-16 ESV)
A final thought is to be sure your finances are ordered in such a way that you are not inhibited by fear or worry when it is time to be bold. We should never let financial needs cause us to shrink back from being fearless ambassadors for God’s kingdom.
In my recent book, Seven Gray Swans, I write about economic trends that are happening before our very eyes but that tend to be ignored. We need to be prepared for challenging days ahead by understanding what to expect and how to prepare.
This article was originally published on The Christian Post on September 10, 2021.
Dear Chuck,
I have been steadily paying down debt, and the end is within site. I’m due a sum of money for the sale of some real estate and wonder if I should pay off the remaining debt or save it. Seems like a good time to be debt free. What would you do?
Almost Debt Free
Dear Almost Debt Free,
I can think of only a few reasons why you would not go ahead and become debt free if you are able. Of course, I don’t have your full financial picture, so I will try to give you a few things to consider as you come to your own conclusion.
Shifting Sands
There is a lot of uncertainty in the world right now. Covid-19 has created stress in many areas of our lives. A Pew Research Center survey reports that half of non-retired adults say the economic impact of Covid-19 will make it harder to achieve their long-term goals. There are medical and financial pressures along with rising mental health issues. Add to that inflation, the instability in Afghanistan, forest fires, flooding, the possibility of a stock market and real estate bubble…. Need I go on?
A major benefit to being debt free is that you will be in a much stronger position to weather the economic storms we may face. If your overall picture is good, then pay off all the debt. But, there is more to consider first.
A Safety Net
It is great to be debt free, but uncertain times also require that you have savings available for emergencies. You want to avoid ending up in the same position six months from now. Therefore, I suggest you give a portion, fund an emergency account, and then apply the rest to debt.
Have you ever done the limbo? The object is to get under a bar without touching it. Budgeting is very similar. Your income represents the bar. Your spending must fall below the bar every month, or you lose.
In limbo, you must take carefully-measured steps to keep as far away from the bar as you can. The gap between your body and the bar is what I call “financial margin,” which we all need. This is the space that grants peace and financial protection in the unexpected storms of life.
It is possible to increase your monthly margin quickly by adjusting your lifestyle. Consider the benefits of choosing to live on far less than you make. Manage the common budget busters—food, entertainment, and transportation—to further reduce expenses.
Other Tips
Paying down the highest interest-bearing note first will save you money in the long run. Paying down multiple small notes can provide a psychological advantage. Repay any late mortgage or rent, utilities, HOA fees, taxes, and car payments so there is no threat to losing your home or car.
Do you owe family members any money? Do not ignore this responsibility. Be honest, and treat them as you would want to be treated so that relationships are not harmed.
Be Intentional
Even if you do pay off all your debt, it is important to manage your finances well as you go forward. Just because you become debt free does not guarantee that you will stay that way unless you manage what you have well. Here are my three tips:
Thank you for the question. I don’t think you can go wrong if you pay off the debt and commit to following the steps above.
For more guidance, especially if your debt is related to credit cards, please consider contacting Christian Credit Counselors. They are a trusted source of help.
This article was originally published on The Christian Post on September 3, 2021.
Dear Chuck,
My husband started short-term disability in order to address addiction issues. He is the sole provider for our family. Recently, he moved $100,000 from his 401k to cover our debt and bills while he seeks to get well. Do you think paying off all debt is wise (except for our mortgage), or do you have a better suggestion?
Supporting My Addict
Dear Supporting My Addict,
I am so sorry for your difficult circumstances; yet, I am grateful you have some options to help you while your husband recovers. Lord willing, he will shake his addiction and begin to rebuild your financial reserves.
It would help to know your age and overall financial picture; regardless, I will provide some information and advice that I believe will help you navigate this.
Addiction in America
Unfortunately, your painful circumstances are not unique. The National Survey on Drug Use and Health (NSDUH) reported that 19.7 million American adults (ages 12 and up) battled a substance use disorder in 2017. The American Psychological Association reports a rise in abuse because of the stress Covid-19 has brought upon many. Statistics can be found here. The 2019 National Survey on Drug Use and Health reports findings here. Tobacco, alcohol, drug abuse, mental illness, and treatment statistics are presented within the PDF. These problems not only have the capacity to ruin lives, but they can also ruin entire families. There are a number of support groups for families going through this trial. Celebrate Recovery is one I have heard many good things about.
Managing Through It
Your husband obviously wants to make sure you are taken care of during this time. Thankfully, he had money set aside in a 401(k). It is generally advised to take out the bare minimum needed because of the penalty and taxes involved. If you are under 5912, you will have to pay a 10% penalty plus taxes on that income. If you were approved for a hardship withdrawal, you may still face taxes and penalties. Do your research so you will not be caught off guard. Keep records of all transactions. There are other options for withdrawing funds, and those can be found here.
Should you pay off all debt? It can reduce stress and improve your credit score. Make sure you can keep up with your mortgage and have the ability to cover repairs and maintenance. The same goes for a car. An emergency fund can prevent the need to borrow in the future. Pay off debt that has high interest and is costing you in penalties. Live frugally during this time so you can reinvest the money borrowed from the 401(k).
While encouraging your husband during this time, it is important to consider the following:
If you are overwhelmed with the burden of financial difficulties, check out our Budget Coaching program. It can match you with one of our certified coaches to analyze your situation and develop a personalized spending plan and debt-elimination strategy. If other families reading this do not have the financial cushion your husband and you have and are experiencing problems managing debt, check out Christian Credit Counselors.
Praying for your husband to recover and for you and the family as you manage your finances and circumstances well. Stay strong. May God sustain you in and through your pain.
This article was originally published on The Christian Post on August 27, 2021.
Dear Chuck,
Although I don’t really believe in it, I am thinking of adding Bitcoin to my retirement funds. What do you think about it?
To Buy Bitcoin or Not to Buy Bitcoin?
Dear To Buy Bitcoin or Not to Buy Bitcoin,
First, my disclaimer: I am not an investment adviser and can only give my opinion or counsel, as any friend might do, based upon the Biblical principles I try to follow.
We, as believers, have a responsibility to steward our surplus wisely. Investing is one way that we can give more to God’s work, supplement our income in retirement, and leave a legacy of provision for our family.
How Much Volatility Can You Tolerate?
At this point in time, the volatility of Bitcoin should rule out the faint of heart or the older, conservative investors near or in retirement.
Some Say Go For It
It can be purchased in a Bitcoin IRA, a self-directed investment account. Check the pros/cons of this approach. What percentage should be held in a portfolio? I tend to agree with this perspective: Below 1% is “too small to matter much,” and above 5% substantially increases risk, so “1 to 5% is a sweet spot,” says Matt Hougan, chief investment officer of Bitwise Asset Management. Two reasons some support investing in cryptocurrencies for retirement include their history of high returns and the potential tax advantages.
Others Say Avoid It
Tuesday, Neel Kashkari, Minneapolis Federal Reserve President, said, “Cryptocurrency is 95% fraud, hype, noise, and confusion.” Speaking at the Pacific Northwest Economic Regional Annual Summit, the central banker accused Bitcoin of futility and sees no case for it in terms of market capitalization. He says it largely feeds into fraud.
No investment is risk-free. The long-term value of digital currencies will depend on how widely accepted they become. Cryptocurrencies have demonstrated great volatility, and future government regulation is not yet known.
Biblical Guidelines for Any Investment Decision
Be informed of risk.
Do your research. Seek the advice of trustworthy, well-informed people.
Be sure to diversify.
Diversification provides protection.
Be very wise.
Investing is not guessing.
Avoid unbiblical reasons to invest.
“But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction.” (1 Timothy 6:9 ESV)
“For I was envious of the arrogant when I saw the prosperity of the wicked.” (Psalm 73:3 ESV)
“As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy.” (1 Timothy 6:17 ESV)
“Desire without knowledge is not good, and whoever makes haste with his feet misses his way.” (Proverbs 19:2 ESV)
“There is a grievous evil that I have seen under the sun: riches were kept by their owner to his hurt, and those riches were lost in a bad venture. And he is father of a son, but he has nothing in his hand.” (Ecclesiastes 5:13-14 ESV)
Put your faith in the Lord, not your retirement plan. Unless you guard your heart, money and investments can become idols.
(Proverbs 3:5-6 ESV)
I recently asked a very savvy investor if he thought he should invest in Bitcoin as a hedge against inflation. His reply surprised me. He said, “I can find no redemptive purpose for investing in Bitcoin other than wanting to get in on the wild speculation that is happening with it. I am more concerned about hedging against Judgement Day!”
Have a Plan
Heed Paul’s instructions to the rich: “They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life.” (1 Timothy 6:17-19 ESV)
Have a plan for the potential use of your investment gains. Set written goals, revisit them regularly, and adjust them as needed. Write your plan into your will before the money becomes available. Develop, now, the habit of giving so you understand the eternal benefits that God promised. Then, invest wisely with the hopes that His provision will be stewarded to bless many, whether that includes Bitcoin or not.
In my recent book, Seven Gray Swans: Trends that Threaten Our Financial Future, I discuss digital currencies and other economic threats that we should keep in full view as we navigate a volatile economic environment. I think you will benefit from reading it.
This article was originally published on The Christian Post on August 20, 2021.
Dear Chuck,
I’ve recently wondered if it’s possible to be too generous. My wife thinks we need to be more generous with our own families as part of what we give to the church and parachurches.
Giving Too Much?
Dear Giving Too Much,
This is a delicate subject, and I commend you for reaching the point where the question needed to be asked. The vast majority of people need to be encouraged to be more generous and seldom reach the issue that you have raised.
Like many issues in Scripture, there is a balance. We are commanded to give generously but not at the expense of caring for our family’s needs.
Are We the Rich Young Ruler?
Jesus clearly commanded the rich young ruler to sell all of his possessions, give the money to the poor, and then come and follow Him. But, the Apostle Paul later wrote that the sincere follower of Christ should decide in his/her heart what to give and to do so cheerfully.
“Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” (2 Corinthians 9:7)
It is my position that unless you are similar to the rich young ruler whose identity and security was in his wealth, you should not sell all of your possessions and give them to the poor. Rather, you should follow Paul’s advice to give in proportion to what you have received and to do so liberally and cheerfully.
It is necessary for individuals to seek wisdom and for couples to act wisely and be united in their giving decisions.
Taking Care of Our Families
“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8 ESV)
Our children observe and learn from our behavior. When we set the example for giving, we demonstrate the Lord’s generosity to us. Strive to consistently live to give. A friend told my wife years ago that it is always better to err on the end of generosity than to withhold good in all ways, even within our families.
We recently had a used van that reached 200,000 miles; yet, it still had a good market value since it was in top condition. We sold it to our son and his wife after their first child was born because they needed one. He actually preferred to buy it versus having it given to them without a price. So, the sales price was $500. We also signed an affidavit that this was a gift and therefore not subject to market value sales tax.
We should make no excuses for not helping family members unless they do not know how to handle money wisely or they abuse it on selfish whims, addictions, or sinful living. Jesus reprimanded the Pharisees who neglected their parents and wrongly justified it. “For God commanded, ‘Honor your father and your mother,’ and, ‘Whoever reviles father or mother must surely die.’ But you say, ‘If anyone tells his father or his mother, “What you would have gained from me is given to God,” he need not honor his father.’ So for the sake of your tradition you have made void the word of God.” (Matthew 15:4-6)
Giving to Family Members
While keeping basic guidelines in mind, look at the pros and cons.
Pros
Cons
Stewards are not necessarily overseers or deacons, but the Scriptural guidelines below are worthy of striving to attain. If giving interferes with the ability to manage your home and extend hospitality, you need to examine if you are giving too much.
See Paul’s list of qualifications for elders in Titus 1:5-9 and 1 Timothy 3:1-13. Note: both hospitality and managing your household well are commended. Are you able to extend hospitality and manage your home well? Can you generously provide for your family in time of need?
There are times when we have to adjust what we give. Changes in income, family needs, and crises impact the analysis of dollars we can cheerfully give. We have friends who are attending to their parents’ needs, who are now in assisted living. That was not on their horizon 10-20 years ago. We know others who face the cost, needs, and challenges of children with mental health issues, drug rehab, and physical disabilities.
Should the Lord tarry, we have grandchildren who may face unprecedented needs in the future. “A good man leaves an inheritance to his children’s children, but the sinner’s wealth is laid up for the righteous.” (Proverbs 13:22)
Pray, and study God’s Word. Get wise counsel. Crown has a number of courses, such as MoneyLife and Flourishing in Generosity, that guide families on how to steward carefully what God provides. He will grant you peace to give generously, motivated by love, and to find the amount that brings joy to your heart.
This article originally published on The Christian Post on August 13, 2021.
Dear Chuck,
Digital currency will be all the rage soon. Won’t it just make inflation worse?
Digital Doubter
Dear Digital Doubter,
There are a lot of new developments regarding digital currencies. It is inevitable that they will be introduced by Central Banks and become a normative part of our lives. It is also a development that has far more downsides than simply concerns over inflation.
Just to be clear, a digital currency is a form of currency that is available only in digital or electronic form and not in physical form. Some refer to it as digital money, electronic money, electronic currency, or cyber cash. Some consider cryptocurrency as a subset of digital currency. That is a debatable point—more about it below.
Big Picture of Digital Currencies
China seeks to be the first major economy to introduce a centralized digital currency. It is speeding up its central bank digital currency (CBDC) trials in a move to issue a digital renminbi (their main physical currency). The country currently accounts for 44% of global digital payments. Digital renminbi would broaden surveillance by allowing the government to monitor all transactions.
In April, the UK announced the creation of a taskforce to explore a CBDC. The Federal Reserve has also been researching central bank digital currencies for some time. The Federal Reserve Bank of Boston is working with MIT on a digital currency.
The U.S. wants to develop “rails” to move money faster for unemployment benefits and stimulus checks. Treasury Secretary Janet Yellen says new rails would be cheaper and safer. A CBDC would enable central banks to maintain competition and operate the innovations along with cash and other forms of payment, while monitoring every transaction. Beyond concerns for out-of-control inflation, this raises privacy concerns as well.
Categories of Digital Currencies:
* Many experts think of it as a digital asset more than a digital currency.
Mid July, Jerome Powell, chairman of the Federal Reserve, appeared before the House Committee on Financial Services noting that stablecoins pegged to a traditional currency, like the dollar, need regulation to protect users. He was, however, undecided as to whether the benefits would outweigh the costs. “These (stablecoins) are economic activities that are very similar to bank deposits and money market funds and they need to be regulated in comparable ways.”
Notably, a government-controlled digital currency would render many stablecoins and cryptocurrencies obsolete. The Fed plans to publish a report on a U.S. digital currency in September. My view is that governments will be forced to attempt to regulate all forms of digital currencies in the future to maintain their desire to exercise global monetary policy.
The Pros and Cons:
Justin Honse wrote an insightful article listing the reasons CBDCs will be viewed positively and reasons why you and I should be concerned. The lists below are directly from his article, The Ugly Side of CBDC.
Benefits
Potential Downsides
In my recent book, Seven Gray Swans: Trends that Threaten Our Financial Future, I wrote about the risks of a cashless society and the “useful conveniences” created by technology that are actually potential losses to our economic, religious, and social freedoms. In my opinion, the development and adoption of CBDCs must be carefully watched as a gray swan event—an obvious danger that we tend to ignore.
This article originally published on The Christian Post on August 6, 2021
