Presenting A Life-Changing Seminar on Money Management

1. Presenting A Life-Changing Seminar on Money Management By G. Edward Reid, Stewardship Director

2. Planning Your Life for Success:Helping donors build a successful life and a lifetime of philanthropy G. Edward Reid, Presenter

3. Part VI Controlling Your Financial Future Part 1 Planning Your Personal Finances Retirement and Estate Planning Part V Investing Your Financial Resources Obtaining Investing Planning Saving Managing Risk Part IV Insuring Your Resources Part II Managing Your Personal Finances Borrowing Spending Part III Making Your Purchasing Decisions

4. How Education Relates to IncomeAs of the mid-1990s, estimated lifetime earnings were: $608,810 Non-high school graduate High school graduate Some college College graduate (bachelor’s degree) Professional degree $820,870 $992,890 $1,420,850 $3,012,530

5. Service Industries Expected to Have the Greatest Employment Potential • Computer technology. • Health care. • Business services. • Social services. • Sales and Retailing. • Hospitality and food services. • Management and human resources. • Education. • Financial services.

6. The way you manage your money has a great deal to do with: • Your personal happiness. • Your stress level. • The quality of your family life. • The stability of your marriage. • And success in your career.

7. It would NOT take a genius to figure out that the devil would like to see everyone of these areas of your life messed up. And in many cases he has been quite successful at this!

8. Determine your investment needs and stage • in life. • Laying the foundation – runs into the 40s. • Accumulating assets – your forties and 50s. • Preserving assets – your 60s and into 70s. • Distributing assets – age 75 and beyond. • Learning years - birth to 30 • Earning years - 30 to 60 • Returning years - 60 till laid to rest

9. Phases in a Life of Faithful Stewardship Dimensions of Stewardship Maturity • Annual Giving • Regular giving • Special offerings and projects • Budget development and communication • Stewardship education for all ages • Financial policies Basic Expression of Faithfulness: Your commitment of prayers, presence, gifts and service.

10. Phases in a Life of Faithful Stewardship • Major Giving • Land purchase • New facilities • Renovation • Debt reduction • Mission opportunities • Cash for Endowment Growing Expression of Faithfulness: Rearranging your priorities to give. Dimensions of Stewardship Maturity • Annual Giving • Regular giving • Special offerings and projects • Budget development and communication • Stewardship education for all ages • Financial policies Basic Expression of Faithfulness: Your commitment of prayers, presence, gifts and service.

11. Phases in a Life of Faithful Stewardship • Estate or • Planned Giving • Bequests • Planned Gifts Ultimate Expression of a Life of Faithfulness: Your commitment to a legacy, a testimony that will endure. • Major Giving • Land purchase • New facilities • Renovation • Debt reduction • Mission opportunities • Cash for Endowment Growing Expression of Faithfulness: Rearranging your priorities to give. Dimensions of Stewardship Maturity Basic Expression of Faithfulness: Your commitment of prayers, presence, gifts and service. • Annual Giving • Regular giving • Special offerings and projects • Budget development and communication • Stewardship education for all ages • Financial policies

12. You must either live within your income or your creditors will eat you alive! “He who rides a tiger cannot dismount.” From a financial perspective, that tiger is debt. Debt and its resulting bankruptcy have drastically changed the American financial picture.

13. There was once a lady from Niger • Who smiled as she rode on a Tiger • They returned from the ride with the lady inside • And the smile on the face of the Tiger.

14. Personal or family bankruptcy rate at an all-time high In 2002 – 30,700 personal bankruptcies in the U.S. - every week! 1.6 million families went under – threw in the towel

15. 3 main reasons why people have money problems and likely in the following order in frequency:

16. 1. Ignorance – many people/couples are financially illiterate. They were simply never taught the Biblical principles of money management. There is hope for these people!!! But you don’t learn this at the Seminary.

17. 2.Greed and Selfishness– they live beyond their means. They are not willing to live in, drive, or wear what they can really afford. Many of these people also feel they are just too poor to tithe. Consequently, they live their lives without God’s promised wisdom and blessing. (Prov. 3:5-9)

18. An Unfortunate Tragedy • -a serious illness without adequate insurance • -being abandoned by a spendthrift marriage partner • -a natural disaster • -a major financialloss not of your own doing

19. Enough about the problems! What canYOUdo to experience financial freedom?

20. 7 Points to Success: • Get organized – develop a budget – have a plan • Spend less than you earn – determine to live within your means • Save a little every pay period – start with only $50 (not just your retirement) • Avoid debt like AIDS. Interest is one expense you can live without.

21. 7 Points to Success: • Be a diligent worker. (Prov. 22:29) • Be faithful to God. He’s given us so many promises (Deut. 28:1-14) Your family cannot afford to live without God’s blessing. • Remember that this earth is not your home. Our management here determines our eternal destiny. (See Matt. 25)

24. The Tyranny of Debt 1. What is debt? (Prov. 22:7) 2. Bankruptcy--a Christian alternative? (Deut. 15:1) 3. Surety (Prov. 6:1-5) 4. Personal surety (6T 448; AH 393)

26. The 5 C’s of Credit Management 1. Character – Your attitude toward debt 2. Capacity – Your ability to repay debt 3. Capital – Asset or Net Worth 4. Collateral – Assets that can be pledged 5. Conditions – The current economy and your job security

27. Debt Elimination Basic premise: establish the tithe (See Prov. 3; Deut. 28; Mal. 3; Matt. 6; Matt 25) Step 1 -declare a moratorium on additional debt Step 2 -make a covenant with God Step 3 -list your debts from largest to smallest

29. Additional Assistance 1.Establish a budget 2. Set goals for your family 3. Destroy credit cards if-- 4. Purchase depreciating items with cash 5. Begin economy measures 6. Have a sale--inventory your possessions and sell off what you don’t absolutely need

31. Four levels of financial fitness: The first level: Getting debt free - This is the only proper foundation. - Develop your spending plan. - Use credit and credit cards properly. - Pay off your house.

32. “Keep this truth in mind: No investment is as secure as a repaid debt. Putting your desire to invest ahead of repaying your debt obligations is usually a sign of immaturity, not financial sophistication.” Pryor, p. 36

33. The secondlevel: Saving for future needs. - Develop an emergency savings fund. - Develop an accumulation fund for future purchases or expenditures (taxes). - Develop a plan for your children’s education.

34. The third level of financial fitness: - Investing your surplus - Learn about the various types of investments -lending investments -ownership investments Spend time learning about mutual funds - Understand the tax consequences

35. There are only two basic choices with investing: • 1. The investments where you become a lender–savings accounts, CDs, corp. bonds, government bonds, state and local bonds, annuities – you get a fixed return. • 2. The investments where you become an owner– stocks, mutual funds, real estate, precious metals, farmland– you make money if the value goes up or the company is successful.

36. The fourth level of financial fitness: -Diversifying for safety. -Understand investing, know what you want to accomplish; set goals. -Spread out the risk.

37. Time is rapidly passing into eternity. Let us not keep back from God that which is His own.Let us not refuse him that which, though it cannot be given with merit, cannot be denied without ruin.He asks for a whole heart; give it to Him; it is His, both by creation and by redemption. He asks for your intellect; give it to Him; it is His. He asks for your money; give it to Him; it is His. “Ye are not your own, for ye are bought with a price.” 1Corinthians 6:19, 20. AA 566

38. The love of money, the desire for wealth, is the golden chain that binds them [people] to Satan. SC 44

39. No scheme of business or plan of life can be sound or complete that embraces only the brief years of this present life and makes no provision for the unending future. Ed 145

40. No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon. Matt. 6:24

41. FinancialPlanning and Its Benefits Personal financial planning is the process of managing your money to achieve personal economic satisfaction. There are several advantages of personal financial planning.

42. Financial Planning and Its Benefits • Increased effectiveness in obtaining, using, and protecting your financial resources. • Increased control of your financial affairs. • Improved personal relationships. • A sense of freedom from financial worries obtained by looking to the future.

43. The Financial Planning Process • Determine your current financial situation. • Develop financial goals. • Identify alternative courses of action. • Evaluate alternatives. • Create and implement a financial action plan. • Reevaluate and revise your plan

44. Financial Planning Information Sources • Printed materials. • Financial institutions. • School courses and educational seminars. • Computer software, World Wide Web, and on-line information sources. • Financial specialists.

45. Developing a Flexible Financial Plan A financial plan is a formalized report that.. -Summarizes your current financial situation. -Analyzes your financial needs. -Recommends future financial activities. Your financial plan can be created by you, done with assistance from a financial planner, or made using a money management software package.

46. Implementing Your Financial Plan Develop good financial habits. -Use a well conceived spending plan to help you stay within your income, while allowing you to save and invest for the future. - Have appropriate insurance protection to prevent financial disasters. - Become informed about tax and investment alternatives. Achieving your financial objectives requires… - A willingness to learn. - Appropriate information sources.

47. 3 Major Money Management Activities 1. Store and maintain personal financial records and documents. 2. Create personal financial statements of income and outflow (balance sheet and cash flow). 3. Create and implement a plan for spending (budgeting) and saving.

48. 6 Reasons to Keep Financial Records 1. To help in making spending decisions. 2. To plan future spending. 3. To pay bills on time. 4. To see changes in net worth. 5. To make good investment decisions. 6. To prepare your income tax forms.

49. What to Keep in Your Home File • Items you refer to often: • Personal and employment records. • Tax records. • Financial services records. • Money management records • Credit records. • Consumer records. • Consumer purchase records. • Insurance records. • Investment records. • Housing and car records. • Estate planning and retirement records

50. What to Keep in a Safe Deposit Box • Safe deposit box:For records/items that would be hard to replace. • Birth, marriage and death certificates. • Citizenship and military papers. • Adoption and custody papers. • Serial numbers and photos of valuables. • CDs and account numbers. • Mortgage papers and titles. • List of insurance policy numbers. • Stock and bond certificates. • Coins and collectibles. • Copy of will.