Tag Archives: economic

Go forth and…. multiply?

Starting a new family is tough these days – financially. When considering the purchase of a home, we should apply these criteria as for undertaking any debt loan. First of all, does it make economic sense to incur a home loan? To determine this, there   are two rules to follow:

Women's Buying Power

The cost to borrow (after-tax interest) must be less than the economic benefit received (interest, yield, and/or growth in value). Rule two: there should be a guaranteed way of repayment.

Secondly, if you’re married, are both spouses free from any anxiety regarding this home loan? The principle indicates that there must be unity between the spouses. Can the home loan be undertaken with peace of mind? If you experience a lack of peace when you picture yourself taking on this home loan, do not enter into the debt.

Thirdly, ask yourself, what personal goals and values am I meeting with this home loan that can be met in no other way?

These criteria are practical, pragmatic, and biblical and should be applied unemotionally to every debt loan opportunity. The counsel to young couples who   are considering the purchase of a home or those intending to purchase a new home, is never to become so attached to the home   that they could not give it up if the debt could not be paid. Jobs are not nearly   as secure today as they were in the past. Inflation will certainly go up,   and fixed low interest rates may very well be a thing of the past.

The psychological burden of home mortgage debt is more severe than most people think,   especially if a woman whose centre of influence and security is in her home is involved. Studies have shown that having mortgage debt is a stressful factor and   that degree of stress relates to the amount of the mortgage.

The question of whether or not to pay off the mortgage, if that is an option, is really an economic, psychological decision. Economically, it may not make sense to pay off a low interest rate mortgage, even if one has the funds to do so. However,   psychologically, it may be, by far, the best course. Again, I would remind you   that finances are nothing more than a resource to accomplish other goals and objectives – they are never an end in themselves. Therefore, even if it does not make economic sense to pay off a mortgage, there may be higher priority goals and objectives that need to be met. Money then becomes merely the resource to meet those goals. The decision does not have to be always an economic one. That counsel is, of course, good for all decisions.

But we’re not just talking about having children, raising kids. How about multiplying your finances? There is an interesting phenomenon in money management that makes it seem as though money is growing on trees. It’s called  interest compounding.

Compounding is when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the   principal is called compounding (i.e. the interest is compounded). The principal amount, for example, may have its interest compounded every month: in this case, $100 initial principal and 1% interest per month would have a balance   of $101 at the end of the first month, $102.01 at the end of the second month, and so on.

It’s interesting to realize that this principle has its source found in His Word. Dishonest money dwindles away, but he who gathers money little by little makes it grow. Did   you catch the basic concept there? Gather money little by little, and thereby make it grow. By the way, did you know that if you invest any amount into a deposit at 6% interest, your principal amount will double in 12 years? In other words, your $20,000 will double to $40,000 in 12 years. Your $100,000 will double to $200,00 in 12 years.

That’s   precisely what compounding does. Whether you start with $100 or $1000 or $10,000 or more, the results over time invested at a reasonable rate can be phenomenal. The factors in compounding are time, amount and interest rate. But the most important key to compounding is being debt free. That’s because compounding will work against you the moment you take a loan.

As managers, we’re charged to manage His resources as efficiently and effectively as possible. The story of the talents which we read earlier, indicates that investing money wisely – and reaping the benefits financially – is a practice He encourages.

And that makes the magic of compounding a concept that’s crucial for us to understand… put to work, and it can help produce a positive cash flow.

A positive cash flow margin is also absolutely essential if you are to accomplish either long-term or short-term financial goals. Without a cash flow margin, you cannot accumulate in order to meet long-term goals. In addition, each of the four other short-term goals – tax reduction, increased giving, debt reduction, and increased living expense – can only be met by having a positive cash flow.

In order to reduce taxes, either additional expenditures must be made for such things   as increased giving, IRA’s, tax sheltered investments, and the like, or income must be reduced. Either increased deductible expenses or reduced income will result in tax reduction. However, both require that there be a positive cash flow to begin the process.

Without a positive cash flow, increased giving is not an option. Once there is a positive   cash flow, however, and it is used to increase giving, that decision results in   decreased taxes because charitable contributions are deductible. There are many people who plan all of their tax reduction through giving. However, they had to have a cash flow margin to begin the process.

Obviously, if you want to reduce your debt principle payments, you must have the excess cash to do so. If you are “going in the hole” by overspending, then there is no way to get out of debt until you generate a positive cash flow. After debt retirement that extra amount can be used to reduce debt further, which in turn increases the cash flow.

The first key to riding any financial crisis is to be debt free. The only absolute way to become debt-free, in the first place, is to have a financial   plan prepared at the beginning of each year that does not allow for the use of debt, and that you will stick to through self-discipline.

The major problem most people face is how to get out of the debt that they are already   in. there are only two ways to get out of debt after making the decision to avoid the use of debt: Examine the assets you have to see which ones could be sold in order to reduce debt; and in the absence of assets to sell to eliminate debt, set up a repayment schedule and strictly adhere to it.

To learn more, you can  download the Financial Freedom Small Groups kit.

Is the future Economic prediction here and now?

David Wilkerson’s book reads like today’s headlines.  There is worldwide economic confusion just ahead. In my vision, this is the clearest thing I have seen. Many praying people now share this very same vision.

Not only is the American dollar headed for deep trouble, but so are all other world currencies. I see total economic confusion striking Europe first and then affecting Japan, the United States, Canada, and all other nations shortly thereafter.

It is not really a depression I see coming—but a recession of such magnitude that it will affect the lifestyle of nearly every wage earner in America and around the world. Countries that now control huge amounts of Western currency are going to be in very deep trouble also. Arab countries will especially be hurt.

Without a doubt, there are lean years ahead full of monetary confusion and despair. How soon is not clear, but it is not far away. The world’s greatest economists will be at a loss to explain the confusion, and an international crisis of fear will develop. A false economic boom will precede the recession—but it will be shortlived.

A Few Good Years to Prepare

In spite of all the danger signs around us of impending economic disaster, the next few years (from 1973) will be among the most prosperous in the history of mankind. They will be fat and flourishing years. In spite of tight money policies, people will continue to spend freely. Sales will continue to break records and people will spend more than ever in modern history. Credit debt will become nearly uncontrollable.

I see, very clearly, just a few years of tremendous affluence and continuing economic prosperity. Church budgets will increase, wages will increase—missionary giving will also increase.

Inflation, costs, and wages will spiral higher and higher. There will be a few minor adjustments in prices, but world economy will become white-hot.

When I received this vision in April of 1973, I also received clear instructions from the Holy Spirit to believe God for sufficient finances to clear all debts of our organization other than necessary mortgages. The message I received from God was very clear and to the point. It was simply this:

There is great economic confusion coming and lean years lay just ahead. There will be a few short, fat, and flourishing years to prepare for the lean years. Work and pray to clear off all debts and get ready for drastic cuts in budget. The money will not be flowing as it was in the past, and if you are free of debt, you’ll be able to maintain your programs even in the difficult years. Don’t panic—and don’t be afraid—just prepare for it and expect it!

Bankruptcies of Major corporations

I believe we are going to witness the bankruptcies of some of this nation’s major and most popular corporations. I see tremendous difficulty arising for credit corporations. There are going to be many people unable to pay off their heavy obligations to major credit card companies, causing near-chaos.

Thousands of small businesses will also be forced into bankruptcies. Three, and possibly four, of the major religious denominations will be forced to operate with a skeleton organization due to a lack of funds. More than a few churches are going to have to pull back. All but a few of the radio and television ministries will have to be abandoned.

Tight money will trigger a wave of uncertainty and fear. Those who have money will hold it in reserve.

The United States government is going to “overreact” to the confused economical developments.

I see a flurry of near-panic decision being made by various government agencies—but these hasty efforts to shore up the economy will backfire.

The President of the United States will make one, and possibly two, national radio and TV appearances to reassure the nation that all is well and that the best of economic times is just ahead. It will not work. People will distrust these statements, and their fears will lead to a revolution at the polls.

The auto industry is going to be hurt badly. Makers of recreational vehicles are going to get hit very hard. Appliance inventories will pile up, and sales will fall off drastically. Almost every economic indicator will be gloomy. It will be spotty at first—but will eventually affect nearly all industry.

Well, if true this does sounds like a lot of pain. But Jabez, Christians can turn their attention to God and cry out against the backdrop of pain. To learn more, we recommend you download the Jabez Personal Study Kit.