# Bring It On: Money

God and Money

Family Money

Credit and Debt

## My husband and I manage to put a combined \$10,000 away each year in our 401(k)s. I heard you speak once about a special curve in savings and something to do with a formula and 72. Would you please explain that again for us? We're about 20 years from retirement. At our current level of savings, will we have enough?

At your current level of savings, if you get that thing working for you, you're going to have a whole lot. I congratulate you that you're taking as much as \$10,000 and putting it away.

It's going to grow tremendously. This is what's called the Law of Use. Jesus talked about if you use what you've got, you'll have more. What is this? What you do is add a percentage, and the technical word is "compound." If you compound your holdings, those savings or whatever, at a particular rate, you can tell how fast it will grow.

At compound, it will double according to the Rule of 72. It's really simple. You say, 'What interest rate am I getting on my savings?' Well, let's assume that you're getting 10 percent and that you can manage your portfolio. That means it will double in 7.2 years. Then, if you keep it up, it will double again and again and again.

It was said if you had the 30 pieces of silver that was given to Judas Iscariot, and he had compounded that at 4 from all the time since he lived till now, there'd be enough to give every man, woman, and child on the face of the earth \$300,000. I mean, it gets to be enormous.

Now, this is what's called the exponential curve. It's a curve that kind of goes up and then it gets to a break point, and then it goes straight up. After about ten years, you have a pretty good return. But by 20 years, you got a takeoff point, and you take it down to 50 years, and it staggers your mind. The idea is that every year you need to increase it. Now you're putting in \$10,000 every year. You're investing it, hopefully, in the market. If you get good stocks that pay dividends, seven percent, that will double every 10 years. But you've got 20 years. If you can get it at 10, it means it will double, double, and double in the 20 years that you've got left. Whatever you've got in there now, say you have \$200,000, in seven years it will double to \$400,000. Then seven more years it will double to \$800,000. And if you will leave it in seven more years, it will become \$1.6 million. That's the way it works. It's simply astounding, the exponential curve.

So get this thing working for you, and don't take your money out at any point of time. Let it grow, let it work, and let the law of God work.

## Pat, my husband and I are in our 20s. We've accumulated \$15,000 in credit card debt. It didn't seem so bad because the monthly minimums were low. Now, as the amounts are growing, it's getting harder to manage. We've checked into debt negotiation, but the counselors tell us as long as we can meet the minimums on paper, they can't help us. We need a strategy to get out of our debt. Would you have a suggestion?

I want to tell you some numbers. They're frightening, but this is the deal. You have \$15,000 in credit card debt. You make the minimum payment. Assuming your credit card is running at 19.99 percent APR-it may be a little less than that, but all right-for 53 years, you're going to have to pay those minimums. You will pay interest, which is \$46,400. So you will triple the amount that's your debt in interest. With the principal in interest, together, you'll pay \$61,000. It will take you 53 years to write that off at the minimum. Don't even think about minimums.

What do you do? It's very simple: You've got to have a budget, and you've got to have more money coming in than going out. That means that some of the things you think are necessary you've got to get rid of. Maybe you bought a new car. Get rid of it. Do something cheaper. Maybe you think you've got to have a big house and you can't afford it. Sell it and get something less. Cut back on those things like going to Starbucks for a \$3.50 cup of coffee and all this that you think is so important.

Count down everything that you're spending, and at the end of every month, pay down those credit cards. If you've got several of them, pick out one, the one that's got the biggest interest, and pay it down fast. Do the minimum on the other; pay that one down; get it out of the way. Then start knocking them down.

You can take care of \$15,000 in a couple of years if you try hard. I'm sure the two of you are working. You've got money, and you just have to sort of tighten your belt and have a budget. Don't spend more than you take in. And while you're doing it, give unto the Lord's work. You've got to do that.

## Pat, I have young children and would like to help them learn how to be good investors. I'm hoping they won't make the same mistakes that I did with credit and get into debt. How would you suggest teaching kids to handle money and develop an investment plan?

If I were you, I would set aside a certain amount of money for the children, and what I would do with them is to say, 'You're going to be earning money mowing lawns, sweeping the house, doing whatever you do with your allowance. You're going to take 50 percent of that, and you're going to put it in a box, and you are going to invest it.' Your children, if they could just put down \$5 each month for 55 years, and they can compound it every month, if they compound it 12 percent, they'll have \$362,000. And that's just \$5 a month.

If you work it so that they're putting in half, and then the summer they get more so they put in some, and then maybe if you could add another \$500 or \$1,000 to it, put it into one of those accounts. I guess the Roth IRA would be the best way of doing it. You don't get a deduction for putting the money in, but it builds up tax-free inside of that Roth.

I think I would start them as early as you could. I'd start them at year one. And any gift to them, let them spend half and use half for saving. You will be amazed how much money it is.

## Pat, is it ever a good idea to buy on credit? My wife says an emphatic 'no.' I'm not so sure. Isn't it important to develop a credit history in case of an emergency?

It doesn't make any difference, your so-called 'credit history'. If your broke, you're broke, and they're going to look at how much income you've got, how much is going out, what your obligations are, how big a mortgage. They don't care a hoot about your so-called credit history. That is fictional. The big thing is, have money. If you have money, and you are not in debt, you're better off. I don't object to using a credit card on a 28-day deal where you pay it off so it's a convenience, so you essentially have a loan courtesy of one of those credit card companies for 28 days. But you pay it off, and so it's just a convenience. But other than that, building up stuff on credit is a bad mistake, at least consumables. We're not talking about mortgages or investment in business. We're talking about consumables. Not a good idea at all to live at the bank. Don't do it.

## My husband and I never seem to agree when it comes to money. He feels its none of my business how or where he spends his money and I want our two adult children to pay rent. He says Im just greedy. What should I do?

I wish husbands and wives would get together on certain things. If you look at the biblical model, it says the husband is the head of the household. I think, in this case, hes earning the money. So the wife should say, "All right, Im not going to interfere with you as to how you take care of the money because thats your responsibility. Im going to leave it in your hands."

But, at the same time, I think a husband whos got any sense will discuss financial matters with his wife, and wives will discuss financial matters with their husbands. Many wives just go blissfully along and husbands make the money and make all the decisions. Then if the husband happens to pass on, the wife is left without a clue as to what to do and she is the prey of these vultures that come along.

I think half of those divorces, half of the problems in marriages have to do with money. And so finances are very, very important. You should work out a modus operandi. I think the husband should certainly listen to his wifes advice if youve got two grown children. Yes, they ought to pay part of the bill, but again, its the husband in this case whos earning the money.

## Is it a sin to pray for money? If I really need it desperately, is it okay to pray that God will prosper me, and not feel bad about it?

You'd better believe it! It's more than okay to pray for money; it is often vital that we pray for our financial needs to be met, that our loved ones prosper, and that God's work in the world will be financed sufficiently. The real question is, what are you going to do with what God provides?

In some cultures, basic items can be obtained through bartering or trading services. While that isn't out of the question for us, most people in Western culture use money to pay for basic needs such as food, clothing, shelter, and transportation. Is God interested in providing these things? Yes, He is! Does He always do so by providing more money? Not necessarily. Sometimes He chooses to change us rather than to simply change our financial circumstances. In other situations, God provides the money and we become stewards, managers, of His resources. We will, of course, give an account one day regarding what we have done with what God has given to us.

Certainly, God isn't some big slot machine in the sky, where you pull a lever or punch in the right data and out comes a jackpot. Nor is He a Santa Claus who provides all the toys on His children's wish lists.

But God does give to His children. Jesus said, "Whatsoever ye shall ask the Father in my name, he will give it to you. Hitherto, have ye asked nothing in my name: ask, and ye shall receive, that your joy may be fu1l." Isn't that amazing? God wants us to ask! And God wants to give to us!

Some years ago, my income was so low that I was living very close to the financial edge. Nevertheless, I believed..that I should give a significant amount to the Lord's work, so I did. Several weeks later as I was driving my car, God spoke to me, and said, 'ask Me for something."

I said, "Lord, I think I have everything I need right now." He said again, ask Me for something."

"Okay, Lord. Please provide me with one thousand dollars." I wasn't sure why I mentioned that figure, but it popped into my mind, so I spoke it in my prayer.

Within days, I had received an extra thousand dollars out of the blue. Shortly after that, Dede and I discovered that our daughter needed some orthodontic work done immediately. The cost? One thousand dollars! God had provided for the need even before we knew that we needed it. He asked me to ask for it, and He was ready and willing to supply the amount needed.

Your heavenly Father wants you to know that He is there, that He cares, that He is Jehovah Jireh, the Lord, your provider. Ask and you shall receive.

One caution: James reminds us, "Ye have not, because ye ask not. Ye ask, and receive not, because ye ask amiss, that ye may consume it upon your lusts." To ask for God's blessings only to satisfy our selfish lusts is to invite condemnation. But to ask your heavenly Father to provide for you, and through you for others, is to be blessed indeed.

## This year it took me over two weeks to do my taxes. It took me forever, and I still owe money to the government. Has filing for taxes always been this difficult, and is there anything you would suggest our government do to make paying taxes more equitable and less painful.

There’s an outcry in the country. There’s something, I don’t want to overstate it, but I think there’s 17,000 pages in the tax code. And there was one congressman who happened to be a CPA and a lawyer, and he said he couldn’t do his own taxes. Now, when it gets that bad, something’s wrong. I used to do mine. I can’t do my taxes anymore. And I just scrawled these little things out and send them in, and they got what they got. But now you have a CPA firm, an accounting firm, that has all those forms and they’ve got a computer program, and they punch a button and out comes all these forms. But it’s time we stop this. The cost is in the hundreds of billions of dollars. There are several proposals on the table. One would be a flat tax, where you’d take the taxes down to, say, 17, 18, 19 percent flat tax, do away with most deductions an exempt people with and income less than, say, 10- or 12,000 dollars. They just don’t pay tax at all. The other is a consumption tax, which is being pushed, a so-called VAT. I’m not in favor of that, but there’s been some persuasive cases made for it. But again, that would be flat type of thing where you wouldn’t worry about all these problems. But this thing has just become a nightmare of special interests. Just think of that. There’s about two or three times more pages than there is the Holy Bible in the tax code, and nobody can understand it, really. It’s that bad. So, yes, something can be done. But let your congressman know. Now’s the time, because the President’s onboard for tax simplification.

## I have been married for 32 years, and my husband takes care of me and does all the finances. But I’m scared, because if anything happened to him, I wouldn’t have the slightest idea what to do. My name appears on all of our checking and savings accounts, and if he dies, do I automatically get access to everything or will it go to probate court?

If you have accounts joint, tenet the right of survivorship, you generally would just take it over. But I tell you, you need to get into this yourself. Women just shouldn’t live in this blissful ignorance and everything is going to work, because it doesn’t. And husbands do die and things happen. And one of the worst things is, you wake up finding that your husband has been cheating on his taxes and you’ve signed the tax form innocently, “Well, I trust old John.” Well, old John has defrauded the government, and that becomes your bill and you can do hard time for signing those things. So check what’s there and get some advice, and get a few books on accounting or a few books on taxes. There’s some simple things out there. But, please, with knowledge comes power, and you need knowledge.

## I’ve heard of many people having to return to work after retirement, because they can’t afford to pay their health insurance premiums. Does that mean premiums go up after you hit a certain age? What’s the best way to prepare for the cost of health care after retirement?

There are various plans. Many companies have a program where you can pick up a rider when you leave and carry it through, and they shouldn’t really raise the premiums on you. But, for example, at CBN, we have policies that cover our employees. But the truth is that we’re really self-insured. I mean, the insurance company is just merely processing the paper. And at the end of the year, they say, “Oh, well, you had 15 pregnancies and five car accidents; therefore, we’re going to raise the rates for everybody, because you’re going to have to pay for it.” So that means they jack the price up, and the employer has to do that. So it depends on the experience of the insurance company in relation to the entity. But I wouldn’t think that your premiums would go up, up, up and up. I’m sure that you could negotiate somewhere along the way some kind of a health program. My wife has learned of a medical practice that has a flat fee. I mean, you pay, like, \$65 a month or something, and you get full services. Now that doesn’t necessarily take care of hospital stays, but it can be negotiated. Lots and lots of things can be negotiated, so shop around. Do the best you can. And if you happen to be working, try to work out something before you leave work, that you can continue with your health plan from your employer and see if they can’t hold the rates on it.

## I’ve been looking for a job now for several months. I’ve been getting unemployment and, I’m learning how to live on those checks and spending less time trying to find a job. Is it wrong to collect unemployment payments from the government?

Those unemployment payments are set up to help transition people just like you who are out of work to get to another place so that you’re not destitute. But whatever you do, unemployment is only for a limited period of time. You can’t stay on it for life. It isn’t a lifetime pension. And you don’t want to get in the habit of not working. Do everything you can to get yourself employed. And if you can’t get employed with somebody else, start a business on your own. Start some kind of a job that you can do something for pay. Because, otherwise, you’ll go down the drains. You’ll become like a vegetable. You don’t want to live that way.

## I was talking to a friend about bankruptcy, and I told her it wasn’t the Christian thing to do. However, she said that in the Bible there was something called the ‘Year of Jubilee’ where everyone is supposed to forgive all debts. What is the ‘Year of Jubilee?’ Does that mean bankruptcy is blessed by God?

Every 50 years there was a release of debts. “Proclaim liberty throughout the land.” It’s on the Liberty Bell in Philadelphia. That was the whole year of releasing debts. Because if interest continues to build up and debt continues to build up, before long, some few people will have it all and the others will have nothing. And so it was kind of like you go back like a Monopoly game; you go back to square one and start all over again. And I think that was an appropriate thing to do. And so bankruptcy indeed has a biblical base, that people are freed from debt, the crushing burden of debt, so they can get a fresh start. This was biblical. And it wasn’t just every 50 years. There was a jubilee, as I recall, in the seventh year, and then it was seven times seven. But it’s a forgiveness of debt. There’s nothing wrong with it.

## Should today’s teens be able to count on some type of Social Security when they retire? And what can we do if the President’s proposals do not get passed?

I had pointed the other day to the pyramid. If you look at it the way Social Security used to be, there was a great big base out here. And I’ve heard all kinds of numbers. 50 workers, 30 workers, 70 workers. You take your pick. But for every retiree, there was this big base of employment, and they were supporting people. And what happened was, if somebody retired in those days, death came much earlier, so people died at 60, 61, 62. So if somebody retired at 65, that pool was even smaller. Now what’s going to happen is that in another 20 years or so, that pyramid is going to reverse. And so, essentially, you’re going to have about two workers for every retiree. And in order to support these retirees, the taxes on those workers is going to have to be increased, them and their employers, to something in the neighborhood of 23 percent. We have a pay-as-you-go system right now. The pay-as-you-go system is going to go into deficit in the year 2018. So that’s just a few years down the road from now. And beyond that, today’s youngsters are going to be at the mercy of the government. The President’s proposing, and I have proposed myself, since 1988 or so, private accounts where people build up their own accounts. It’s their own money, and it’s invested in the great, tremendous economic growth of the United States of America in bonds, in stocks in the private sector. The money belongs to you. It’s not dependent on the whims of some congressman. So I think the President’s plan really needs to go through, and he needs to hang tough. If they water it down, it’ll ruin the program.

## As a Christian businessman, what advice would you give us young aspiring men and women who are just entering the job market? How should we present ourselves and what are employers looking for?

More than anything else, they’re looking for integrity. They want somebody that’s honest, so tell them the truth. Competence is very important, but there are a number of things which you should present. But, number one, integrity comes at the head of the list. And beyond that is innovation. I just think that we need the sparkle of innovation. And beyond that is competence. You’ve got to know what you’re doing. That’s why we’re training people at Regent to have skills in various trades. You need to be competent. And you put together competence, integrity, and innovation, you’ve got a combination that will take you far.

## I’m just curious if you have any practical advice about starting a savings retirement program. If I keep my money in the bank, is it insured against loss? Or what are you thoughts about that?

I wouldn’t worry about insurance, because you’re going to wind up losing more with inflation. How do you start a savings program? I think the best way is to open an IRA. You can do it with at least a couple of thousand dollars a year. It’s tax sheltered, until such time as you begin withdrawing. You’re not supposed to withdraw without penalty, until you get to be 59. But you can, nevertheless, build that up to enormous amounts, and you can have a self-directed IRA, where you can have mutual funds, bond funds, individual stocks. You can do anything you want to. You can get an account. I like Fidelity, because it has so many of them, but there are many others, as well. But that’s how I’d start, and I’d take advantage of that compounding tax free as quick as you can.

## I’ve come to understand that the United States economy is relatively fragile. It seems that one news report can cause great fluctuation in our financial system. Would backing our economy with a gold standard give it more stability?

There’s not enough gold to go around. Gold is like a straightjacket, and we’ve long since gone to much more flexible standards of currency. There just isn’t any way that you can trade physical gold. And, as it is now, there are at least a trillion dollars worth of transactions that take place every single day, maybe more than that in the currency market. But every single day like that, money goes just like this. And if you’re waiting for something to give you gold coins to settle up, it just doesn’t work. Gold is like an archaic relic. And so I think you’re just going to have to rely on what’s there. And if I were you, I’d load up on the tangible assets and not just paper.

## My husband’s father died in December, and my husband is the executor. He left us \$50,000 and one-third of his estate. The rest is to be split between the other two children. His siblings don’t think it’s fair, and my husband is considering going against the will to split everything evenly. Was it wrong for their father to favor one child over another? Would my husband be making a mistake if he went against the will?

I’m not sure he’s got the privilege of going against the will. What’s given is given, and I don’t know as executor he has the legal privilege of disregarding the father’s wishes. There’s nothing wrong with this. They used to have what they call “primogeniture,” where the firstborn son, essentially, got the estate, the title, and got most of everything. I don’t see anything wrong with a father deciding he wants the major portion of his estate to go to somebody. He might know something about these siblings that your husband doesn’t know, and he may think one will waste the money or one would make a better use of it. I really don’t believe that he has the legal right as executor to go against what the will says. The will is his document of authority. He has placed as executor, and his job as executor is to carry it out -- period.

## I am in business, and I’m planning to go public with a company I privately own with my wife, who’s also a Christian. Will the entrance of new shareholders who will be mostly unbelievers amount to unequal yoking in business with unbelievers? Can I safely join my vision with those of possible non-Christians?

In the old days, going public was the road to riches. You’d go out in the public market, and now you’d have stock. The stock would go up, and the founder would have a lot of money. It would just give you a lot of opportunity. Now, I want to tell you, getting involved in a public company is a nightmare. Sarbanes-Oxley is horrible. The CEO of a public company got to swear under penalty of criminal indictment that everything and all of your financials are accurate. I mean, it’s a tough, tough thing. Plus, many of the big brokerage firms don’t even give coverage to somebody that has less than \$200 million a year in revenue. So if you’re a small company, you’re going to languish and it will really be tough. And I tell you, I would say today, if you can possibly avoid going public, don’t do it. And it’s not so much about bringing in unequally yoked. If you have control, if you have enough super-majority stock so you control the board, then it doesn’t really matter what these other guys do. But if you have a minority position and you have other people who have majority control, then, yes, they will take your business away from you as well. So in today’s world, it’s kind of like don’t do it. Ten or 15 years ago, it was the road to riches. Today, it’s the road to a nightmare.

## What do you think of having an interest-only loan as a second mortgage? I’d have ten years to pay off the principle. This way, I can pay off all of my other debt and then start paying the principle. Is this a good idea?

It does in some measure depend on what your financial status is, and I don’t’ know all the circumstances. I mean, if you’re loaded up with credit card debt and you’re paying 28 or 30 percent on overdue loans, it might not hurt to put something like that on a mortgage, because at least you get to deduct the interest. But I tell you, ladies and gentlemen, these interest-only loans, or these ARMs, these adjustable-rate mortgages, they’re going to come back to bite people. And more and more of the mortgages that are being issued now are adjustable rate. And once interest rates start popping up, and they will, as long as we keep throwing money out the window in our government and into foreign countries in our spending—the value of the dollar is going down, and the debts are going to rise in interest rates. So what are you going to do if all of a sudden interest rates pop from three-and-a-half percent on a ARM up to six or seven percent? What’s going to happen? I mean, there are going to be just a raft of foreclosures. So I would be very, very careful with these, quote, “interest rate only.” I mean, it sounds so nice. But you’re not paying anything down, and it gets to be a debt trap. The Bible says, “Owe no man anything except to love one another.” Get out debt as fast as you can. The borrower is the servant of the lender, however you get it. You can use debt in business and so forth, but just be careful of it. But I think interest-rate only, it’s a seductive type of financing.

## I’m a 78-year-old widow, and I’m concerned about my children. What obligations, if any, will my kids have in regard to indebtedness I might leave at my death? For example, what happens to my mortgage payments, credit card balances and car payments?

Well, your children won’t owe anything, but your estate will, because these are debts that you have, and they go into your estate. So when the balance is figured out of how many assets you’ve got and how many liabilities, the net remaining will go to your children. But at the same time, from your estate. Unless they signed on your mortgage, they’re not obligated for your mortgage or for any credit cards you’ve got. But whatever money you leave, and if on the other hand you don’t leave any assets, then it’s tough luck for the creditors. It’s just the way it goes. But I’m sure as a Christian you want to make sure all your assets are in order. I think it’s appropriate to have our assets in order, just as a testimony to our faith in the Lord. So if you have debts and obligations, it doesn’t hurt to take care of them.