Category Archives: Careers & Entreprenuership

Jesus Loves Business, But…

This week’s money and stewardship devotional from the four Gospels* is from Luke. In Luke 19:45-46. We see Jesus rebuking people selling in church, yet in Luke 19:12-27, Jesus tells a parable that seems to have blessed the combination of responsible investing, hard work and stewardship- all elements of business ownership.

I think Jesus loves capitalistic, entrepreneurs; business owners. They work hard, show their faith and trust in action through tough risk. They use and expand their God-given talents. Business fails more often than it succeeds, and God uses failure to teach and grow us more than success. Business owners create jobs, provide health and other benefits, enabling people to work hard to provide for their families. Entrepreneurs give back to society through charitable donations, business is financially healthy for communities, and they often invest in other businesses that have the same benefits.  The Pope recently commented some about the negative sides of  big business; exploiting the poor and ruining the environment. This is true at times, however business and capitalism isn’t immoral – it always comes down to the motivations of its leaders. Sounds like to me, they need the influence of Jesus and from other Christian business owners.

I’ve even heard some people in the faith community say they prefer a more socialistic system, that provides for the poor better. However, capitalistic democracies like the U.S. provide more for the world’s poor, than any other system. Is it any wonder, people from other countries are pouring into our country through our southern border? Where else do you see this except in war-torn areas? Corruption and immorality of its leaders will always exist in any type of economic or political system, but in socialistic systems there is always more poverty. Checked democracy and capitalism, although far from perfect, is just the most efficient system of freedom and distribution of goods and wealth.

So back to the Bible verse noted at the beginning, Luke 19:46-47: When Jesus entered the temple courts, he began to drive out those who were selling. 46 “It is written,” he said to them, “‘My house will be a house of prayer’; but you have made it ‘a den of robbers.'” Was Jesus condemning business people selling stuff; putting down capitalism or entrepreneurship? Was Jesus saying that business was unholy? I don’t think Jesus was saying these things at all. Jesus was disgusted that a place of worship was being used as a means to make a profit. He hated that faith was being used, either for worshipers or leaders as a way to line either of their pockets. The main focus of church should be the trinity, and not our financial profitability.

So how do we reconcile Luke 19:46-47 and Luke 19:12-27? One on hand Jesus is quite harsh on those whose main faith motivation is for financial gain. Yet in the earlier verses in Luke, he praises good business stewards. In the technology sector, we hear about “China Walls.”  Chinese paper walls are thin; sound and light travels through them. Each room is connected, yet separated by thin walls. For Christians, our China walls should be the checking of our heart’s motivations. Our faith should influence how we operate in business, and business is good for faith as well. However the litmus test is to ask ourselves; “from where do our motivations come?” We should err on the side of caution.

Business owners are under great pressure. In many business sectors, profit margins are low, costs of supplies and human resources are high, and business is extremely competitive. Bill Gates, the CEO of Microsoft, said that intellectual property has the shelf life of a banana; and all business owners know that they have to keep changing and work hard to maintain competitiveness. At the end of the day, business owners need  a growing faith to survive, so their work lives need to become more closely aligned with faith, yet to be extremely alert to the motivations of their hearts (Jeremiah 17:9).

*A chronological examination of any verse that involves money and stewardship, from the four Gospels, with this approach: Jesus is shepherding us in our finances, for our good, to help us help others and for the Kingdom. Jesus leads us with grace through this difficult area of life, and empowers us with the Holy Spirit to do amazing things. This is the fifty-seventh post in this series.

Accelerate Product Ideas to Fruition: Quirky.com

quirkyWhile I was watching the Tonight Show the other evening, Jay Leno had a guest on from Quirky.com, a new, really cool social invention Website to help bring ideas for inventions to fruition. They highlighted some great products that people recently invented.

There are all sorts of ways to make additional money, and this one really caught my attention. You may dream about getting out of debt, buying a new car, affording a different lifestyle or giving to charity. Ultimately you might like to be self-employed or financially independent. One of the things people dream about the most is starting a new business with that new great idea they have.

Have you ever had a great idea for a better mouse trap, only to later see someone actually create it and make money selling it? My wife and I think of good, bad and strange ideas all of the time. I think most people do. However, the difficulty is being able to take it from the idea stage all the way through to the end, where you have a successful, profitable business. Therefore most ideas that you or I have never go anywhere, since it is too hard, or you lack the motivation or resources.

The reason you don’t develop your ideas is that you probably lack the money to develop it, investigate patents, then produce the item, and lastly sell it. Most people run out of money in the early stages of startup, and they don’t know how to go about raising capital.  If all things go well, then there are the challenges of marketing, Websites, accounting, staffing, administration, payroll, facilities and on and on. This can all be very stressful, and relationships and marriage can be strained.

What if you could craft an idea and leave a lot of that stuff to someone else. What if you can do it all online for $10 per idea, and when the product is sold, you are sent the royalty checks?  That is exactly what the new social website Quirky.com is designed to do, and it is doing it quite well. You can easily submit your ideas by answering a series of questions and uploading drawings or other things that explain your product. Within 30 days your idea will be either taken to product development (every Friday new ones are chosen), or archived for future consideration. You can also decide to remove it from Quirky.com and develop it on your own or re-post it for consideration again.

Since Quirky is another online community, you can see and vote on other people’s ideas. It is really cool to see all of the new ones that people submit. I noticed a great idea about an electric paper towel dispenser. I voted for it and commented about it in their online community. You can also see products that have been developed and how much revenue has been generated.

Check out Quirky.com for useful gift ideas to buy, to upload your invention, to vote on things.  Quirky has marketing arrangements with many major chains including Target, Bed Bath and Beyond, and HSN Home Shopping Network, and they sell their products on Quirky too. The only downsides to consider is the loss of control of the Intellectual Property and your royalties would probably be less than the eventual profits if an idea became a big hit. Those are the risks; however, most ideas never are pursued or invested in, and your forget about them later. For a minimal cost, you can float your idea out there, and perhaps Quirky will run with it to make it a success, thereby helping you become a success in the process.

 

How to Pick a College Major

Are you a young person planning to go to college? Or maybe you are an adult and want to go in a totally different direction in your career. Or maybe you just want to stay in the same industry but specialize in a particular area of study. Whichever group you are in, you need to go back to school or just continue on in your studies–but if you don’t plan, you might be headed in the wrong direction. Luke 14:28-32 kind of speaks about planning before setting a course.

A recent newspaper article indicated that those that graduate from college with the highest debt are those coming out of arts schools, yet their job prospects might not be so great. That WSJ article lists 3,500 colleges and their graduation rates and median amounts borrowed. Like any college or university, they will tell you about the most successful students and how well their careers are going. Attending college orientations and visits with our children, we had these wonderful top of the class students obtaining great fulfilling jobs paraded before us. They wanted you to think that if you attend their school you would be successful too. One school in particular we visited had a great arts school, and we heard about famous grads that were working for Disney–everyone was impressed and excited, but the odds were low for most students landing a similar job.

It seems as if most schools do a very poor job at helping students pick a career that not only fits their interests, but has great job prospects as well. In addition, little guidance is given when it comes to borrowing. More schools are talking about debt now, which is good, but too often they don’t give a lot of information, because if they do, they fear admissions will drop if students know the real story.

How do you make the most of your college experience to prepare you for a future career?  First of all it is good to have goals and knowledge. The main goals of education should be to prepare you for your next phase of life in your career, and as solid well rounded people that a liberal arts education promises.

How do you choose a good career?  I believe it is a combination of knowing yourself, knowing the job market, and following God. If you set your sights on making a lot of money without considering your own natural abilities and interests, then you might end up being very unhappy. Some people believe that as long as they have a lot of money to do the fun things, they will be happy, but for some that doesn’t work out. On the other hand, if you totally pursue your heart without consideration of the practical side of things, like the ability to earn an income your new degree will provide, then you will either starve or end up living with your parents, and maybe with a ton of debt that you can hardly ever re-pay. Lastly, if you don’t do it without any consideration for the call on your life that God may have for you, you might miss out on all sorts of wonderful things that are in store for you. A case in point is majoring in social work. This career can be one of the most wonderful areas of work, and if that is someone’s calling and interest, go for it, but be mindful that the income potential is modest, so plan to minimize debt and plan for the lifestyle that career will provide. The same might be said for teaching and other careers with many openings, but it is just good to plan appropriately.

It is easy for me to have this perspective now that I am in my 50’s, but it was difficult when I was 20 and was just ‘finding my way.’ It is better to take inventory when you are just starting out in life since switching gears later is hard if you have a family and lingering college debt. Start with knowing yourself a little better. Take an inventory of the things you like to do or have enjoyed doing so far.  What are you naturally good at? What makes you happy at work?  What are the undeveloped talents and abilities that you have? You may have difficulty seeing them yourself. I know I do. What has helped me is taking various aptitude tests, often offered through high school or college counselors, or personal, career or college coaches. Secondly, ask other people. For example, co-workers and friends told me I had teaching and writing abilities and natural administration skills, that I was good with technology and other things that I never really thought of. Having other people’s perspective is so valuable because we can’t often see things about ourselves. Proverbs 15:22 comes to mind, so early on don’t be afraid to ask for counsel and seek advice. Sometimes I find this hard to do, since I have to swallow my pride–publicly admit that I don’t have many things figured out–but I am finding out as I age how valuable this is.

Some career professionals will tell students to get a 4-year major in STEM degrees: science, technology, engineering and math. The following areas seem to be hot these days (sources: Forbes, Yahoo Finance, NY Times, US News and World Report):

  • Medical: medicine, nursing, pharmacology, pharmacy, bio-medical engineering, treatment therapy
  • Science and Math: Biochemistry, computer science, applied mathematics, mathematics, physics and statistics
  • Engineering: software, bio-medical, civil, environmental, petroleum, chemical, transportation, electrical and construction
  • Information Technology: programmer, network specialist, and various others
  • Business: Finance, accounting, business services, human resources, and management consulting
  • Less than 4-year degree: some IT, medical aid workers, airplane repair and maintenance

For some people, careers are not always a straight arrow path. I am reminded of the Sheryl Crow song title, Every day is a winding road.  You might start off your career in  one direction, and through the fun adventure of life, eventually end up doing something altogether different from what you planned or expected. During the journey you meet people that will be important to you in guiding your career. You may have different jobs that teach you new skills, and you might learn about abilities you do or don’t have. I think that is why many people go back to school at all ages to get advanced degrees, study for entirely new careers, or just expand their knowledge of where they are. You are never too old to learn or try something new.

If you do go to school, try to minimize debt as much as possible. Not only will the debt burden be easier to shed, but also having less or no debt allows you to be more flexible in pursuing various careers and interests later. To learn about more ways to pay for college, read my previous article: 14 Ways to Fund College.

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Work Tax Deductions, Job Search Deductions and Job Search Help

You are eligible get a tax deduction for some unreimbursed expenses from work, and for those that had expenses looking for work or relocating. While on the latter subject, first I wanted to provide some ideas for those looking for work.

If you are unemployed or underemployed and are looking for work, there is help for you and your job search, and help through tax deductions for some of the expense of looking.

Today many churches and housing agencies have job search workshops and some have even hired experts to counsel people about all of the myriad of issues you need to know if you are looking for work. Vineyard Columbus (OH) has done just that. Some government agencies and social groups also provide the same. There are groups for executives, non executives and those over age 50 providing skills, support and encouragement that you may need for what often is a long-term process. Scioto Ridge is an excellent group in Columbus Ohio that helps many people.

Meeting one-on-one with experts and attending workshops is extremely important to getting hired. You will learn how to write a good resume, network, use LinkedIn and other social media, and interview well. Do not assume you know how to do all of these things, especially if you have been out of work for a while; do not go at this lonely and aggravating process alone. Some banks are even hiring firms to consult out of work people struggling to make mortgage payments, such as 5/3 Bank headquartered in Cincinnati Ohio hiring Next Job Inc.

Now that it is tax time, be acutely aware of the tax deductions that you might be eligible for. The list includes: courses to improve you skills and employment agency fees (see IRS Pub 970), mileage and parking for interviews, preparing and mailing resumes, and relocation expenses (see IRS Pub 521).

Do you incur expenses for your job from time to time, but don’t ask to get reimbursed? Perhaps you picked up some inexpensive office supplies, or donated to a project out of your pocket.  Often teachers buy their own class room supplies. If you are not reimbursed by your employer for these expenses, they could qualify for a miscellaneous deduction, as long as they were  required to do your job as an employee and were “ordinary and necessary” to your business or trade.

How to Deal With Perceived Employment Age Discrimination

Is your age in the 50’s or 60’s, and you are looking for a new full-time or part-time job? Do you think you are unlikely to get hired because you are too old? Do you feel age discrimination is really big, and is a barrier when you go to an interview? Job applicants must learn how to deal with this before the interview, or their chances of getting hired will be very low. Bill Canonico, an employment specialist at CanoniCo and at Vineyard Columbus, recently shared with me some excellent advice he gives many people that are in their upper 40’s and older.

Many people come to him terrified that they won’t get hired because they believe their age is a barrier.  They are convinced that hiring managers will always select a younger person with less experience. Some older job applicants have a chip on their shoulders, thinking the younger person can be paid less, learn faster, work with more energy, and be more tech-savvy.

This negative attitude is displayed to the interviewer, but the interviewees doesn’t have any idea they are doing it. This alone may be the unintended barrier to getting hired.

Older workers have decades of experience dealing with many situations in life and in the work environment. Often they are calmer in dealing with difficulty and are more appreciative of the new job they get. Older workers are much more common today, and some employers recognize and appreciate the skills, experiences and maturity they bring to the workplace.  Often they aren’t as distracted as younger workers by smart phones and Internet and worrying about the politics and stress of moving up. They are just happy to do a good job.

Shockingly, even though 15% of all working age people are unemployed, many employers have difficulty finding two things: a good work ethic and appropriate skills.

Work Ethic: Showing up to work on-time, working hard, good attendance and attitude, and high level of work quality are actually rare in the workplace, employers tell us.

Skills:  Employers are having difficulty finding potential employees with the needed skills they desperately want. Read this recent article in the Wall Street Journal for some interesting facts.

Bill tells me there are three types of employers: The first group doesn’t care about age, but about work ethic, skills, experience and the ability to listen and learn. The second group may care some, and will be on the lookout for vitality, good attitude, and a younger mindset. The last group does care about age, and they are going to discriminate–and there really isn’t much you can do about it. Bill says that you have a 2/3 chance of age not really coming into play, if you approach it with the right attitude…

Attitude: The older job searchers need to convey the attitudes and ethics mentioned above. They might want to talk with a specialist like Bill about how to conduct an interview, how to dress, hair style and a few other cues, to make sure they convey the right image the employer is looking for.

Resume: Bill reviews resumes every day and all day. Most of the resumes he sees are not well put together and, because of that, most people never even get to interview for the job they want. Hiring managers and recruiters go through hundreds of resumes for each open position. The first thing they do is to look for a reason to not consider you. They are trying to quickly take a stack of several hundred resumes and reduce it to about 10.

If the resume’s form isn’t simple and easy to read, which means they have to work to figure out your skills and experiences or are distracted by resumes that are over-designed, you are out. Next, they are scanning to see if your skills and experience match what they are looking for. If they can’t find what they are looking for easily, your resume is eliminated, because they don’t have the time to try to figure it out. Next, if they come across misspelled words or poor grammar, then into the garbage it goes.

Now that the list is down to a smaller number, they are looking for problems, such as employment gaps (not as big a deal given the long recession), reasons for leaving, or too many positions in a short period of time. If your resume doesn’t deal with that professionally, then more than likely you are out of the running. If you made it this far, they are now trying to find the best skills and experience. The hiring manager will pay special attention to things that you did ‘above-and-beyond’: awards, and special projects and training: things that set you apart. A professional like Bill can help you present the best you, even if you have a few blemishes.

Lastly, Bill reminds me that Christians have something extra going for them: faith and God’s favor. Individuals putting their full faith in God can have confidence that God is going to provide for them. Sometimes it is a mental and spiritual battle to maintain or regain that ‘place.’ Secondly, they have God’s favor. God has chosen us and he loves us immensely; he will give you favor in your job search and interview, often giving you an advantage in the job marketplace others don’t have. If you need God’s help, just ask, if you need Bill’s, contact him.

Affirming Businesses

Does the Christian church at large engage those who own businesses at all or enough? As I considered which presidential candidate would be the most pro-business, it got me thinking about how people and the church lean toward business. Let me say at the outset that I am not taking political sides in this article.

During the presidential campaigns business got a bad rap. In a society that has been relying more on entitlements, the wealthy (including many who are business owners) have sometimes been maligned. The anti-business rhetoric came from both sides as our economy suffered in part from Wall Street abuses. Some of the criticism was right on, but only a very small minority is to be blamed. Governor Romney was raked across the coals for what he did while at Bain Capital, but much of that criticism was not founded in facts. This and more has contributed to an anti-business sentiment at times, and this is wrong and bad. Business, especially big business and “big oil,” is often the scapegoat for whatever ails societies when we are look for something to blame. It is a natural human reaction to want to blame someone when something bad happens.

Businesses, though, should be lifted up and supported in the church, government and society at large, because they have formed part of the backbone of most cultures for thousands of years. Businesses supply goods that people need worldwide. Businesses employ people, providing good jobs that people feel good about doing, and they provide funds so that people can care for themselves, for others and for their families. Businesses help fund health care and retirement plans. They provide resources to finance other businesses, and funds for people to buy and build homes. Businesses are creative outlets for people to use their God-given gifts and talents. Businesses are communities of collaborative people, friends that become families. Modern culture couldn’t exist without businesses. They help people build wealth that can be used to help people in need and to help preserve culture.

Culture is that wonderful and colorful thing created by man and God that makes up our great societies that we are blessed to enjoy. Businesses are part of the entire culture that includes art, entertainment, sports, ethnicities and more. Businesses are good–something to be celebrated, lifted up, supported, enjoyed and encouraged. Businesses are God given and they are good.

Starting, owning and running businesses takes a lot of blood, sweat, and tears–requiring people to risk security, wealth, homes and lifestyles. It is hard work to keep employees and customers happy while battling ever-present competition. Global competition is fierce, requiring more new levels of expertise than ever before. Technology, benefits, taxes, accounting and cash flow management are extremely complex, making it difficult to relax for even a moment. We all depend on businesses, and more than ever they need our political, economic, emotional and spiritual support.

Jesus and Financial Abusers Matthew 9:9-13

This week’s money and stewardship devotional from the Four Gospels* is about Jesus ministering to people who are financially abusive.

As Jesus went on from there, he saw a man named Matthew sitting at the tax collector’s booth. 9 “Follow me,” he told him, and Matthew got up and followed him.  10 While Jesus was having dinner at Matthew’s house, many tax collectors and sinners came and ate with him and his disciples. 11 When the Pharisees saw this, they asked his disciples, “Why does your teacher eat with tax collectors and sinners?” 12 On hearing this, Jesus said, “It is not the healthy who need a doctor, but the sick. 13 But go and learn what this means: ‘I desire mercy, not sacrifice. For I have not come to call the righteous, but sinners.'”

The tax collectors in Jesus day were known to have been particularly bad people. They had few true friends because they tried to gather information about people and their wealth so that they could extract as much money for themselves and the Roman government as possible. People would turn in other people to gain an advantage, and they would tax people as much as possible. The collectors were often Jewish and treated their fellowmen harshly; they made their living by charging an extra amount. They collaborated with the Roman authorities to abuse their brethren for their own benefits. Their lifestyle and occupation was one of deliberate constant sin, I guess, compared to the rest of us who sin on occasion but not by practice to make a living.

In our day and age, financially abusive people would be those that charge high interest rates on loans, such as credit card companies and pay-day lenders. They would also be scammers who take advantage of people, especially the poor and the elderly. Ponzi schemers like Bernard Madhoff would also be in this category. I would also include politicians and lobbyist who collaborate to line their pockets to the disadvantage of their constituents. Considering the recession that we are going through, one could also include the investment bankers and rating agencies who conspired to create and sell poorly designed mortgage-backed securities. Could we also include those businesses that moved factories offshore (or politicians and unions who passed legislation encouraging it), shutting down millions of factories, leaving fewer high-paying manufacturing jobs?

Jesus knew that the flow and influence of money affects the entire society and its people, and it is especially the poor who ultimately suffer from abuse, since they are at the bottom of the financial food chain. If you think about it, the economic system is one of the main influences and sources of power, in addition to government, business, military and educational institutions. Maybe that is why Jesus particularly focused on this group of people not only to associate with but also to minister to, and he called one of them to be a disciple–Matthew.

How much of an influence does faith have on those who run banks and work for them, investment firms, the United States Treasury, politicians and lobbyists, insurance companies, and rating agencies? Are high morals and ethics a top goal, or is the bottom line always profits? On one hand, the financial systems do work pretty well; if they were totally corrupt, things would be a whole lot worse than they are today. On the other hand, the gap between the rich and poor is the widest now that it has been in 40 years. When economic systems are fair and just, there is more opportunity for all to do well. Jesus greatly cares for the poor: Luke 4:18 “The Spirit of the Lord is on me, because he has anointed me to proclaim good news to the poor.” So it seems as if Jesus made efforts to minister to the spiritually “sick.” as he called them. He wasn’t just trying to save the group he was ministering to–in verse 13 he challenged them to think of helping the poor not as a sacrifice, but as a a merciful, generous response to his mercy for them.

In this we can see that we are called to raise up leaders in economics, business and politics of high moral standards. We are to pray for the institutions that affect us all greatly. Christians working in these institutions, especially financial ones are to conduct themselves with high ethics, and be a witness in the workplace and on committees and boards. These things are needed more now than ever. You and I are key to economic recovery.

*A chronological examination of any verse that involves money and stewardship, attempting to see the new light that Jesus shines on money in his selfless, grace filled, Holy Spirit empowered, and Kingdom oriented positions. This is the tenth post in this series.

Credit and Gift Card Positives, Negatives and Innovation

The banking industry has never been known as innovators or centers of creativity. That’s why an article in the Wall Street Journal caught my attention today: Ice-Cream Bank’s Rocky Road. I’ll get to the article in a moment, but my gripe with credit cards and gift cards is that although they provide a definite convenience, their negatives outweigh their positives for many Americans.

Credit cards and debit cards are definitely handy. No one wants to carry thousands of dollars around when making large purchases. and the cards are necessary for making flight, hotel and car rental arrangements. Cards also provide reward points (maybe a small percentage of the purchase) that can be used for gifts, cash, and travel.

Then there are the negatives: retailers are charged 1.5% – 3% on purchases, automatically resulting in inflating the cost of goods we buy. The credit card industry makes a lot of money on these fees. They also like it when people don’t pay off their balances each month, because they charge up to 30% interest on unpaid balances. The credit card issuers are really nice when they offer you a card, tempting you with points and no interest for the first year, and maybe an offer to waive the annual fee. However, if you run into hard times and miss a payment, many of them increase your interest rate to their highest rate (nearly 30%), making it even harder for you to catch up.

Research shows that people that use plastic instead of cash to buy goods feel less pain psychologically and spend more per purchase.

In summary, you use credit cards for convenience.The retailers charge more for the goods to cover the cost. You spend more money, and you may end up paying high interest rates. In return, all you get is convenience and points. Now some people have awesome discipline and don’t spend more, so they really profit from the points. I wouldn’t recommend this to most people, but if you are really disciplined, the points can cover your vacation costs every year, potentially saving a few thousand dollars from your budget.

Gift cards, on the other hand, are a nice way to buy gifts for people. Some people buy them at grocery stores and get reduced gasoline costs; Kroger and Giant Eagle are common grocery and gas bundlers in our area. Some people do this when making large purchases at other retailers. The negative side of gift cards is that they can sometimes get lost in the mail, we may forget or lose them once we receive them, or they may lose value if not used within a specific time.

Now back to the story about an Ice-Cream Bank. Seems there’s this boutique ice-cream parlor in Pittsburg that pays 5.5% interest per month on its cards. The interest can be redeemed for items they sell, such as ice-cream and coffee. The banking regulators are in turmoil trying to shut down this parlor offering bank-like products, but so far they haven’t figured out how to shut down the niche the proprietor found in banking and securities regulations.

I like innovation, and I admire Ethan Clay (the owner) for his creativity and courage to come out with an interesting idea to attract and reward customers. This got me thinking: Why don’t the credit card and banking industries, as well as major retailers, come up with ideas not only to add convenience and points, but also to encourage saving money on purchases and perhaps provide discounts on purchases if you use their cards? Wouldn’t it be cool if a credit card company rewarded people who finally paid off their balances, by depositing money into a special savings account (redeemable only in the future) for each month that the balance is reduced? Maybe they could even increase that amount for every month that this is maintained and the balance is finally repaid. They probably cook up ideas like this all the time, but they are not approved when they get to the executive team for fear of lost revenue, since they make more money on interest and fees. But like Ethan Clay’s small Whale Bone Cafe, small companies can try new ideas. Maybe a smaller credit card issuer will read this story in today’s Wall Street Journal and provide a card that has positive innovations to help people more.

 

Bad Credit the New Scarlet Letter?

In Nathaniel Hawthorne’s classic novel set in the 1850’s the Scarlet Letter, Hester Pyrnne struggled to regain dignity following an adulterous affair. In antiquity, lepers were scorned because people believed they were dirty and being punished by God. In 2012 60% of jobs filled are screened for bad credit ratings. Individuals you may know of good integrity and skills are looked over because they lost their job or faced uninsured health bills, and fell behind on their mortgage or credit card payments.

According to the Wall Street Journal, “For Job-Seekers, a New Push to Keep Financial Skeletons Buried,” it is only illegal in 7 states to run credit reports on prospective employees. 19 additional states are considering similar laws, and on the federal level a bill outlawing this practice is in committee. I’ve met hundreds of good people in the past few years who are struggling financially, some because of bad decisions, others because of unfortunate circumstances. A large majority of them are good honest people and would make excellent employees, yet because of hiring policies in positions that even when credit would not be related to performance or security risk, they are blocked from landing the position they qualify for.

Financial difficulty in society today seems to have more shame and guilt than other struggles that people face. My pastor commented once that in 25 years of pastoring a mega-church, literally hundreds of people have confessed their sexual struggles, but he could only count on one hand the number of people who felt comfortable enough to share their financial problems. It is strange that is a society that admires risk takers, financial strugglers are later day scarlet letters to some people, and in our own self perception.

I am going to write my congressman about moving the bill out of committee.

Indiana and the Right to Work Laws

The Indiana legislature is battling over putting the Right to Work referendum on the ballot.

Right-to-work laws exist ins 22 states, which prohibit agreements between labor unions and employers that make membership, and union dues a condition of employment.

What this means to worker’s personal finances in the short run is having to pay mandatory dues, so a workers income could slightly increase. Labor unions argue that workers who benefit from them, shouldn’t be exempt from having to pay for them. They might also argue in the long run, that with less dues, they will have less funding to fight for workers. Some union dues payers are not always happy because their dues may be used to back issues or candidates for which they don’t support.

There are plenty of more arguments on both sides, and many states are watching the goings on in Indiana, to see how they might deal with the issue in their own state. Interesting information can be found at The New York TimesPal-item.com and on Wikipedia.

12 Biblical Ways to Receive Income?

A few days ago I was talking to a friend who was out of work, and considering several great opportunities. This reminded me that there are really many ways to earn an income today, and many financial experts believe in the years to come more people will have several income streams at the same time. Having several sources of income help to not have all of our income eggs in one basket, and makes life more interesting.

In addition a friend asked me since bond investments represent debt, and the Bible seemed him to forbid charging interest when money was loaned to others, was it okay to own bonds, or any investments representing debt, which could include bank savings accounts and certificates of deposit.

I thought that both this question and issue were inter-related, and make an interesting blog. At the conclusion I will try to answer the question, but first here is a quick review of some of the 12 ways to receive an income:

  1. Employment (W2) Provides an earned wage, or referred to as ‘people at work,’ is the most obvious way to earn an income. If you are an employee of a company, you are paid an hourly wage or salary. Your employer bears all the risk of running the enterprise, and earning enough money to make payroll. You contribute to the employers bottom line by your hard efforts. Your employer may also provide you with health, life and other benefits. In addition they pay their percentage of the necessary employer taxes for FICA (Social Security and Medicare), FUTA (Federal Unemployment Tax), and SUI (State Unemployment Tax), which amount to. Not to mention worker’s compensation insurance premiums.  The FICA tax rate for employees is 7.65% (OASDI 6.2%, Medicare 1.45). The taxable wage base for OASDI is $110,100 for 2012, which means your income above this figure is not taxed OASDI, except for Medicare. The Tax Relief extension temporarily reduced OASDI from 6.2% to 4.2%.
  2. Independent Contractor (1099) usually is when a company engages someone under contract to provide a service for them. 1099 workers are not provided with any other benefits.  For example an appliance retailer may pay independent trucking contractors to deliver and install appliances for a fee. 1099 workers are responsible for paying all of their own employment taxes, which are 15.3% (OASDI 12.4%, Medicare 2.9%). The Tax Relief extension temporarily reduced OASDI from 12.4% to 8.4%. Many new independent contractors are surprised to find that they have to pay 15.3% (temp 11.3) versus only 7.65% (temp 5.65) if they were an employee.
  3. Businesses produce and sell products or provides a service for a fee. This could involve farming, mining, manufacture or any type of service such as office cleaning that people are interested have. Businesses can be set up a number of ways, including sole proprietorship, partnership, regular C corporation, sub chapter S corporation and LLC or limited liability corporation.
  4. Sales can come from businesses that do not manufacture a product or provide a service, but they buy a product from those that do such as agriculture, gold, property, manufactured goods, and sell it to someone else at a higher price.
  5. Brokers are similar to sales, they may not take possession of the product to sell, but they connect the buyer and seller, and they receive a commission for doing so. Sometimes they sell contracts for the future delivery of the product (futures contract).
  6. Stock (equity) Investors buy interest in businesses that sells or makes things or provides a service, and earn part of the profit either through dividends or increase in value.
  7. Real Estate Income earners buy property and rent it out to individuals or business. Real estate investors receive tax deductions, and are responsible for maintenance and collection of rents.
  8. Bond (debt) Buyers essentially loan money to others who want it to buy something, or fund a business or government, and earn interest on the money until it is all returned.
  9. Royalties are income paid to creative people who get patents for things they invent, and songs or books they write to mention a few.
  10. Network Marketing can come in many forms, such as through MLM – multilevel marketing, website network marketing, and affiliate sales.
  11. Pension or Defined Benefit Retirement plans pay guaranteed income to long-term employees of companies or governments. The benefit is determined by income and years of service. Social Security retirement income could be in this category too.
  12. Benefits paid to disabled people or poor people are the last way that I could think of for ways to receive, but not earn, an income. The Bible verse that says those that are not willing to work should not eat is 2 Thessalonians 3:10, but that shouldn’t be our excuse for not temporarily helping others. The Bible has countless verses relating to helping the poor.

It is my understanding of the Bible that all are valid ways to receive income, with the  exception of debt (interest charged on loans), unless interest earned on money loaned to foreigners, most of the verses related earning and income to this can be found starting at Compass.

Does this mean that Christians shouldn’t own bonds, certificates of deposit or put money interest bearing savings accounts? The entire world’s economic system very heavily involves debt. Currency is leveraged to provide cash flow to fund governments, new and existing business, and provide housing, to mention a few. The investment community and churches invest in equities and bonds all of the time. Is owning bonds the same as loaning and earning interest as it seems to be forbidden in the Bible? One would think so, and although at one time, this leveraging of economies seemed like a great idea in boom times, it doesn’t look so good now. I’m not sure if I am right, but I will discuss this question with others in the weeks to come.

15 Great Ways to Increase Cash Flow

What are your financial goals for 2012? Maybe you want to go on vacation, fund your emergency savings so that unplanned expenses don’t set you back, repay debt so that you don’t feel the burden of living paycheck-to-paycheck, put more money into retirement and college savings, help your family more, give more to charity. But you are wondering how you are going to be able to accomplish goals if there doesn’t seem to ever be enough money to go around. Here is my quick down-and-dirty list of things that you may be able to do to increase cash flow into your home this year.

  1. Follow a budget and track spending, so that you know where your money goes and you have limits when you shop.
  2. Tear up credit cards and use cash. Research indicates that people that use plastic end up spending more money than those that don’t- it is a psychological thing.
  3. Refinance your home now that interest rates are lower than ever, and a lower rate could lower your payment. Be careful, take your time before pulling the trigger, read this post for more information.
  4. Consolidating debt into one payment is tempting, but only do it if you lower interest rates and you promise to not borrow any more mony until this is repaid. Statistics prove beyond a doubt that loan consolidators are soon in more debt, or they end up with a bad consolidation deal.
  5. Change tax withholding if you usually get a tax refund. Talk to your tax advisor about the right amount of exemptions for you to take that make sense for you. Your paycheck will go up, and you can use that money for important things. 
  6. Shop for lower insurance rates, this may save you $20 – $100 per month.
  7. Eliminating debt will free up mony that used to go to creditors now you can use it to save for future needs.
  8. Become a more frugal shopper by using coupons and other means. Your local library has dozens of books about how to save money. We like anything by Mary Hunt of Debt Proof Living.
  9. Cut back on your Cell phone data and time usage.
  10. Reduce cable to basic or eliminate all together until you are back to where you need to be.
  11. Lower your real estate taxes, start by calling your county auditor and talk with them about how you can go about adjusting the valuation of your home down for real estate tax assessment purposes.
  12. Downsize your home or automobile if you can, this will help you have lower payments, maintenance and utilities.
  13. Obtain a second part-time job.
  14. Do freelance or side work. This has been helpful to me, in the past I painted a friends barn and did other work, and now I do freelance writing.
  15. Sell stuff that you don’t need or want, hold a yard-sale, sell stuff on e-bay or craigslist, or sell old jewerly you may have around (but read my article on selling gold first)

Pray for miracles, they sometimes happen. Also, be sure to pray for strength, perseverance, wisdom and guidance along the way, you need His help and He is willing to help you.

You can have a successful year, it takes ingenuity, hard work and prayer.

Economic Cost of Angry Birds

Interesting and funny but unscientific article about the amount of time consumed playing just one game, Angry Birds.  This article cites a recent report that around the world people spend 200 million minutes on Angry Birds every day. This adds up to 866,666,667 hours per year, and in America to it might compute to 43.3 million working hours, that at $20 per hour might equate to $866 million dollars in lost wages per year.

Whether the conclusions reached in this article are correct or not, I’m not sure, but it got me thinking when people always tell me they don’t have time to better their health and finances, or I tell myself the same thing, sometimes it may be true.  For those who can find the time, they get second jobs to pay off debt, work out at the gym, study more about their profession, go back to school, study financial matters, take an evening class, read an instructional book, start a small business on the side, create a budget and balance the checking account. All of these activities can at the least enrich our lives, and at most set us on a dramatic course to better a better one. Each one of us has been created with an equal amount of time each day, yet it is up to us to decide how to use it. A Chinese proverb says that the best time to plant a tree is 20 years ago. Perhaps the best time we can change the course of our lives is to invest our time in something constructive now, and watch where that takes us.

Entrepreneurism Admired

I admire creative people who can think of an easier way to do something and create a business out it. Even though the economy is struggling, there is always opportunity to find a better way. Sometimes it is simply improving what already exists, such as a vacuum cleaner or fan. That is why I found this article about James Dyson very interesting: Bold Designs for Humble Items.

There hasn’t been much talk these days about small business, but maybe politicians should think about ways to help the entrepreneurs start businesses and succeed. They could increase incentives and funding, and could lower taxes for small businesses. Wouldn’t this in the long run set the stage for a strong recovery, restore our trade competitiveness, and create more jobs?

The research from a few years ago seems to indicate it: “Small firms (employing less than 500 employees): Represent 99.7 percent of all employer firms, employ about half of all private sector employees, pay nearly 45 percent of total U.S. private payroll, have generated 60 to 80 percent of net new jobs annually over the last decade, create more than half of non-farm private gross domestic product (GDP), hire 40 percent of high-tech workers (such as scientists, engineers, and computer workers), are 52 percent home-based and 2 percent franchises, made up 97.3 percent of all identified exporters and produced 28.9 percent of the known export value in FY 2006, produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.”

Source: U.S. Dept. of Commerce, Bureau of the Census and International Trade Administration; Advocacy-funded research by Kathryn Kobe, 2007 (sba.gov/advo/research/rs299tot.pdf) and CHI Research, 2003 (sba.gov/advo/research/rs225tot.pdf); Federal Procurement Data System; U.S. Dept. of Labor, Bureau of Labor Statistics”

Financial Observations in Moby Dick, circa 1851

Herman Melville is an amazing author. His knowledge of the Bible and just about every other topic is astounding, and I am enjoying reading his book.

Ishmael – “Again, I always go to sea as a sailor, because they make a point of paying me for my trouble, whereas they never pay passengers a single penny that I ever heard of. On the contrary, passengers themselves must pay. And there is all the difference in the world between paying and being paid. The act of paying is perhaps the most uncomfortable infliction that the two orchard thieves entailed upon us. But being paid,- -what will compare with it? The urbane activity with which a man receives money is really marvellous, considering that we so earnestly believe money to be the root of all earthly ills, and that on no account can a monied man enter heaven. Ah! how cheerfully we consign ourselves to perdition!”

Interestingly, Melville knits scripture into commentary about earning money: orchard thieves being Adam and Eve, perdition an old-fashioned name for hell. He is indeed right; working and being paid is a really good thing. Sometimes it is something we don’t appreciate as much as we should. A large part of financial planning is managing the gift of careers. What we do with earnings can be a source of good things and ills. Thank you, Herman!