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Finding Financial Freedom

Finding Financial Freedom. Wait patiently. Interdependent Truth. Work Gloriously Wait Patiently Live Simply Give Generously Celebrate Community. Wait Patiently. Impatience is very costly. Wait Patiently. Impatience is very costly When patience runs out somebody is going to get hurt.

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Finding Financial Freedom

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  1. Finding Financial Freedom Wait patiently

  2. Interdependent Truth • Work Gloriously • Wait Patiently • Live Simply • Give Generously • Celebrate Community

  3. Wait Patiently • Impatience is very costly

  4. Wait Patiently • Impatience is very costly • When patience runs out somebody is going to get hurt...

  5. Proverbs 22:7 “The rich rule over the poor and the borrower becomes the lender’s slave.”

  6. Romans 13:8 “Let no debt remain outstanding, except the continuing debt to love one another.”

  7. Case Study • After working out the numbers you figure that you can buy a car for about R2200/month. (Excluding maintenance, insurance, running costs etc.)

  8. That means that you could finance: • A car for R100 000

  9. That means that you could finance: • A car for R100 000 • @ 11%

  10. That means that you could finance: • A car for R100 000 • @ 11% • Over 60 months (5 years)

  11. That means that you could finance: • A car for R100 000 • @ 11% • Over 60 months (5 years) • Monthly payment of R2174

  12. That means that you could finance: • A car for R100 000 • @ 11% • Over 60 months (5 years) • Monthly payment of R2174 • You pay R30 455 in interest.

  13. OR - You could finance: • A car for R50 000 • @ 11% • Over ??? months (v 5 years) • Same monthly payment of R2174 • You pay ??? in interest.

  14. The comparison

  15. Because you have learnt to save... • You then save your R2174 for the remaining 37 months @ 5% = R87 136.

  16. Because you have learnt to save... • You then save your R2174 for the remaining 37 months @ 5% = R87 136. • (Actual savings could be even higher if you had placed this money in your bond, should you have one.)

  17. Let’s assume at least 50% depreciation in tradable value over the 5 years. • R100 000 option: After 60 months you have a car to trade in @ R50 000

  18. Let’s assume at least 50% depreciation in tradable value over the 5 years. • R100 000 option: After 60 months you have a car to trade in @ R50 000 • R50 000 option: After 60 months you have a car to trade in @ R25 000 and R87 136 saved for a total of R112 136

  19. Let’s assume at least 50% depreciation in tradable value over the 5 years. • R100 000 option: After 60 months you have a car to trade in @ R50 000 • R50 000 option: After 60 months you have a car to trade in @ R25 000 and R87 136 saved for a total of R112 136 • For the exact same monthly expense you have a 124% improvement!

  20. For the boffins... • Where interest rates go up the advantage will become even greater.

  21. For the boffins... • Where interest rates go up the advantage will become even greater. • While maintenance may be more, this is somewhat offset by lower insurance.

  22. For the boffins... • Where interest rates go up the advantage will become even greater. • While maintenance may be more, this is somewhat offset by lower insurance. • If the 5 year depreciation is more than 50%, which is not unlikely, the percentage improvement of “option B” would be even greater.

  23. It is not a Trick • It is nothing less than a lifestyle choice shaped by your values!

  24. It is not a Trick • It is nothing less than a lifestyle choice shaped by your values! • You learn to be your own banker, using money from your savings to finance future needs.

  25. Biblical counsel is not just “spiritual”, it is financially smart.

  26. Biblical counsel is not just “spiritual”, it is financially smart. • It is either extravagance or impatience that gets too many of us into a spiral of debt.

  27. Biblical counsel is not just “spiritual”, it is financially prudent. • It is either extravagance or impatience that gets too many of us into a spiral of debt. • If you do not develop the discipline of saving, you can never avoid the inevitability of debt.

  28. Different Kinds of Debt • Consumer debt

  29. Different Kinds of Debt • Consumer debt • Debt on depreciating assets

  30. Different Kinds of Debt • Consumer debt • Debt on depreciating assets • Debt on appreciating assets

  31. Escaping Debt • If you are in a hole, stop digging!

  32. Escaping Debt • If you are in a hole, stop digging! • Develop a repayment plan, starting with your most expensive debt.

  33. Escaping Debt • If you are in a hole, stop digging! • Develop a repayment plan, starting with your most expensive debt. • Make yourself accountable to someone you trust.

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