BYU Management Society Taiwan Taipei Chapter

1. BYU Management SocietyTaiwan Taipei Chapter The Whys, Whats, and Howsof Personal Finance May 2, 2014 Bryan Sudweeks, Ph.D., CFA From the BYU Marriott School of Management website on Personal Finance at http://personalfinance.byu.net

2. AbstractThe Why, What and How of Personal finance • The purpose of the education and the gospel is to change lives for the good. The challenge is how do we do that? Elder Boyd K. Packer said • “True doctrine, understood, changes attitudes and behavior. The study of the doctrines of the gospel will improve behavior quicker than a study of behavior will improve behavior (Boyd K. Packer, “Little Children,” Ensign, Nov. 1986, 16). • Understanding doctrines, principles, and applications, the “why”, “what” and “how” of Personal Finance, can help us help us and others as we all work to be better followers of Jesus Christ through managing our finances.

3. Objectives • A. What is our perspective on personal finance? • B. Why should learn personal finance? • C. What should we learn about personal finance? • D. How do we apply those principles in our lives? • E. What is our responsibility as to personal finance?

4. A. What is our Perspective? • Our perspective is that Personal Finance (or the management of our finances) is simply living the gospel of Jesus Christ • It is putting Christ first in our lives • “But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you” (Matt. 6:33).

5. B. Why Learn Personal Finance? • The “why” questions are the important questions in life • These are the questions of the heart • Why should we learn personal finance? • These are the doctrines, the critical things in life • Its purpose is to:

6. Why (continued) • 1. To bring us to Christ • Whatever the problem may be in a person’s life—failure to pay tithing, breaking the Word of Wisdom, casual church attendance, [or I add - poor financial habits, the]—real issue is faith in Jesus Christ. If we can help people obtain the gift of faith in Christ, good works will follow. The end purpose of any law of God is to bring us to Christ. And how well will the law work? It depends on what we think of the Author of the law (Elder C. Max Caldwell, “What Think Ye of Christ?,” Ensign, Feb 1984).

7. Why (continued) • 2. To help us learn and accomplish our divine missions for which were sent here to earth • I bear testimony of the fact that if you keep the commandments, He nourishes you, strengthens you, and provides you means for accomplishing all things necessary to faithfully finish your divine mission here on earth. May the Lord bless you in your decisions at this important time in your lives (Elder Gene R. Cook, “Trust in the Lord”, Ensign, Mar. 1986).

8. Why (continued) • 3. To help us return with our families back to Heavenly Father’s presence • It helps us keep our priorities in order • President Harold B. Lee said, “The most important work you will do will be within the walls of your own home” (Teachings of Presidents of the Church: Harold B. Lee [2000], 134). • President David O. McKay stated: “No other success can compensate for failure in the home” (quoted from J. E. McCulloch, Home: The Savior of Civilization (1924), 42; in Conference Report, Apr. 1935, 116).

9. Why (continued) • 4. To help us become wiser stewards over our resources and blessings • Our resources are a stewardship, not our possessions. I am confident that we will literally be called upon to make an accounting before God concerning how we have used them to bless lives and build the kingdom (Elder Joe J. Christensen, “Greed, Selfishness, and Overindulgence,” Ensign, May 1999).

10. C. What Should We Learn? • Elder Richard G. Scott commented: • Joseph Smith’s inspired statement, “I teach them correct principles, and they govern themselves,” still applies. The Lord uses that pattern with us. You will find correct principles in the teachings of the Savior, His prophets, and the scriptures—especially the Book of Mormon. . . Your consistent adherence to principle overcomes the alluring yet false life-styles that surround you. Your faithful compliance to correct principles will generate criticism and ridicule from others, yet the results are so eternally worthwhile that they warrant your every sacrifice (Richard G. Scott, “The Power of Correct Principles,” Ensign, May 1993, 32).

11. What (continued) • What are those principles that we must adhere to, whose results are so eternally worthwhile that they warrant our every sacrifice? • Let me propose a few “correct principles,” that are the foundation upon which this perspective is based • I call these my “Principles of Personal Finance”

12. What (continued) 1. Ownership: Everything we have is the Lord’s • The Psalmist wrote: • The earth is the Lord’s, and the fullness thereof; the world, and they that dwell therein (Psalms 24:1). • The Lord is the creator of the earth (Mosiah 2:21), the creator of men and all things (D&C 93:10), the supplier of our breath (2 Nephi 9:26), the giver of our knowledge (Moses 7:32), the provider of our life (Mosiah 2:22), and the giver all we have and are (Mosiah 2:21). 12

13. What (continued) 2. Stewardship: We are stewards over all that the Lord has, is, or will share with us • The Lord said: • Thou shalt be diligent in preserving what thou hast, that thou mayest be a wise steward; for it is the free gift of the Lord thy God, and thou art his steward (D&C 136:27). 13

14. What (continued) 3. Agency: The gift of “choice” is man’s most precious inheritance • President David O. McKay wrote: • Next to the bestowal of life itself, the right to direct that life is God’s greatest gift to man.… Freedom of choice is more to be treasured than any possession earth can give (Conference Report, Apr. 1950, p. 32; italics added). 14

15. What (continued) 4. Accountability: We are accountable for every choice we make • The Lord stated: • For it is required of the Lord, at the hand of every steward, to render an account of his stewardship, both in time and in eternity (D&C 72:3). 15

16. What (continued) • On the questions of what is really ours, Elder Neal A. Maxwell stated: • The submission of one’s will is really the only uniquely personal thing we have to place on God’s altar. The many other things we “give,” brothers and sisters, are actually the things He has already given or loaned to us. However, when you and I finally submit ourselves, by letting our individual wills be swallowed up in God’s will, then we are really giving something to Him! It is the only possession which is truly ours to give!(italics added, “Swallowed Up in the Will of the Father,” Ensign, Nov. 1995, 22). 16

17. D. How do we Apply These Priniciples? • The final step is the “how’s” of personal finance. • What are the things we have been counseled to do • Let me just share a few of them from Church leaders and the scriptures

18. How (continued) • 1. Communicate • “Management of family finances should be full and equal, and mutual between a husband and a wife. Control of the money by one spouse as a source of power and authority causes inequality in a marriage and is inappropriate. Conversely, if a marriage partner voluntarily removes himself or herself from family financial management, that is an abdication of necessary responsibility” (Elder Marvin J. Ashton, One for the Money, Intellectual Reserve, 2006, p. 3). 18

19. How (continued) • 2. Pay the Lord First • Tithing is the law upon which financial blessings are predicated. Pay a full tithing and be generous with offerings, and the windows of heaven will be opened (Mal. 3:10). “And when we obtain any blessing from God, it is by obedience to that law upon which it is predicated” (D&C 130:21).

20. How (continued) • 3. Manage Your Money and Use a Budget • President Kimball counseled: • “Every family should have a budget. Why, we would not think of going one day without a budget in this Church or our businesses. We have to know approximately what we may receive, and we certainly must know what we are going to spend. And one of the successes of the Church would have to be that the Brethren watch these things very carefully, and we do not spend that which we do not have” (Spencer W. Kimball, April Conference, 1975, pp. 166-167).

21. How (continued) • 4. Pay Off Consumer Debt • President Ezra Taft Benson shared: • “The Lord desires his Saints to be free and independent in the critical days ahead. But no man is truly free who is in financial bondage” (Ezra Taft Benson, “Prepare Ye,” Ensign, Jan. 1974, p. 69).

22. How (continued) • 5. Prepare for Emergencies and Build a Reserve • A good financial plan should start with a cushion for rough times. Most financial planners recommend 3 to 6 months’ worth of living expenses be set aside in a savings account. • Emergency funds are for very specific purposes—lost job, hospital or medical bills, major home or car repairs, or other unexpected events. In addition to monetary preparation, build up appropriate food storage and other emergency essentials.

23. How (continued) • 6. Save for Long-term Goals • Begin saving now for long-term goals. It is appropriate to borrow as necessary for education and home, but be cautious. A mortgage is the likely largest financial obligation you will take on, and it will be a burden on your shoulders until the day it is paid. President Hinckley’s advice is to “get a modest home and pay off the mortgage” (Ensign, May 1998). Save for retirement and understand your available options.

24. How (continued) • 7. Protect Yourself and Family Through Adequate Insurance • Elder Marvin J. Ashton counseled: • “Appropriately involve yourself in an insurance program. It is most important to have sufficient medical, automobile, and homeowner’s insurance and an adequate life insurance program. Costs associated with illness, accident, and death may be so large that uninsured families can be financially burdened for many years” (Marvin J. Ashton, “Guide to Family Finance,” Liahona, Apr. 2000, 42).

25. How (continued) • 8. Teach your children and family • Teach family members why we want to be financially responsible. • Teach them the principles of financial management. • Involve them in creating their own budgets and in the family budgets as well. • Teach the principles of hard work, frugality, and saving. • Stress the importance of obtaining as much education as possible

26. E. What is our Responsibility: as to Personal Finance? • How do to you learn to be wise financially? • There are many sources of good information • It just takes time to sort them out • Let me add two other sources to your list: • 1. The LDS Provident Living Website • www.providentliving.org, then Family Finances • 2. The BYU Marriott School of Management’s Personal Finance website • http://personalfinance.byu.net 26

27. LDS Provident Living Website

28. Provident Living: Finances (continued)

29. The MSM Personal Finance Website

30. www.Personalfinance.byu.edu

31. www.Personalfinance.byu.edu

32. Personal Finance is simply living the gospel of Jesus Christ. Though times may be tough, a prophet said: I testify to you that our promised blessings are beyond measure. Though the storm clouds may gather, though the rains may pour down upon us, our knowledge of the gospel and our love of our Heavenly Father and of our Savior will comfort and sustain us and bring joy to our hearts as we walk uprightly and keep the commandments. There will be nothing in this world that can defeat us. My beloved brothers and sisters, fear not. Be of good cheer. The future is as bright as your faith (italics added, Thomas S. Monson, “Be of Good Cheer,” Ensign, May 2009, 92). Summary 32