Monthly Archives: November 2012

The US Economy Grows (GDP) at Good Rate, Is It Enough?

The Commerce Department announced Thursday that the Nation’s Gross Domestic Product (GDP) increased at an annual rate of 2.7%, for the third quarter. Is it time to celebrate that the economic recovery has arrived?

GDP tracks the size of our economy by calculating the total dollar value of all goods and services produced over a specific time period in comparison with the previous quarter. For 2012 GDP slumped to 2% in the first quarter, and 1.3% for the second, so the announcement of 2.7% for the third quarter is good news.

Is this a great indication you might ask? Well any increase is good, however this would only add up to 2.1% for 2012. Looking back at the most recent recessions, from a presidential term perspective, provides some challenging information.

  • Economic recovery under Ronald Reagan, GDP averaged 4.4% from 1995 – 2000, assuming you take out his first two years in office, where there was negative GDP, as it took some time for his policies to take affect.
  • Bill Clinton took office in weak economic times, but not nearly as bad as Reagan. Under Clinton, GDP averaged a decent rate of 3.1% from 1994 – 2000. This assumes you don’t take into consideration his 1st year in office, when there was negative GDP.
  • Under President Barack Obama it has averaged 2.1% if you don’t include his first year with negative GDP. How does this compare to those other Administration’s first few years in office? In Reagan’s first 3 good years GDP averaged 5.3%, and for Clinton it averaged 3.4% for his first 3 good years in office.

In conclusion: The economy is growing at a much slower rate that it needs to in order for it to lift unemployment, prevent more middle-class people from sliding into poverty, and to help those stuck there. Fiscal Cliff, Federal Debt, unemployment, and global economic crisis will continue to weigh down progress.

Can You Buy Life Insurance and Forget It?

Most people buy life insurance and seldom review it later. Here are 7 compelling reasons why a life insurance review is a great idea.

  1. Price:  If you own term insurance, you may want to check to see if you can buy a new policy for a lower overall cost.
  2. Length: If you purchased a level premium term life insurance policy, it may expire before you are willing to go without the coverage. Let’s say you purchased a 15 level premium term policy 10 years ago, and you still will need the protection when it expires or the premium increases substantially in 5 years. You might want to buy a new policy now, with a longer term than 5 years–one the matches the time period of your need. Also a new one will cost more in 5 years because you will be older and your insurability may change. If your insurablity changes because you develop some kind of health problem, you may be rated up or declined.
  3. Benefits:  Some policies have riders that cover their dependents, or they may offer some disability insurance–to mention a couple. However many people forget they have riders and you might be eligible for some cash benefits.
  4. Need:  If you have taken on more debt or your family size has increased, you might need more coverage. Conversely, if you have saved more money, eliminated debt and have fewer dependents, you might need less. Talk to a financial planner or insurance professional for a needs analysis. A good rule of thumb for the family’s breadwinner is 10 times income. Do you have that much now?  If not, it is a good idea to review your needs.
  5. Company. Are you sure your present life insurance company is financially strong? Most are, but as a consequence of the global economy your company might not be as strong today. A good agent can check that out for you, or you can research it online through AM Best, Duff and Phelps, Moody’s and others.
  6. Universal Life:  If you have one of these life insurance policies, it has a cash value that earns interest. With interest rates at the lowest in decades your policy may be under-performing. If this is the case, it may lapse or require a substantial increase in premium to keep it from lapsing. It is a good idea to examine it now, and to explore your alternatives before it is too late.
  7. Beneficiaries:  Your life insurance policy pays a benefit to the beneficiaries indicated in your policy. There are primary, secondary and tertiary beneficiaries; meaning primary’s get the money if they are still alive or, if they are deceased, the money goes to the secondary, and so on. Beneficiary arrangements can be quite complicated, and they may not be up-to-date as to how you want your death benefit to flow. Also, if you have written or changed your will or trust, it is usually good to change beneficiary arrangements to be consistent with all of your plans.

In summary, there are a lot of other reasons, just as important as these. It is always wise to review your coverage every year to two.

Budgeting For Extra Charitable Donations

Here is a cool idea: consider adding a new category to your monthly budget for ‘special giving.’ While doing some budget planning with the program we use–YNAB, or You Need a Budget–I noticed that for some months throughout the year we gave to various causes. This was in addition to our regular giving.

This got me thinking. Wouldn’t it be really good if for every month we made a special donation to groups or people that we saw in need. Doing our regular 10% tithe each week, month and year sometimes seems mundane, from the standpoint that it is just a regular habit. Don’t get me wrong, I actually get excited to do it, because I feel it is an honor and privilege to be able to give, and I know it will go towards the kingdom and bless many people. But on the other hand, I don’t always get to see who it blesses, or to have a more direct effect on a single person or a special cause I like.

I asked my wife if she wanted to carve out an extra amount each month for special giving, either to organizations, or people that we want to help. She said yes–she was all for it. We are starting out with a pretty small amount that we can afford. We have only been doing this for a couple of months. It has helped with my electronic budgeting too, because now we have a place already in our program to track it. I’m kind of a nerd, and I like the numbers to match up. This helped us give to a group feeding the poor last month, and to make a special offering to help families that can’t afford Christmas for their children this month.

The YNAB software program is really easy-to-use, and I can add extra categories, or subcategories to accommodate this change to our budget. YNAB can be used on PC, Apple, iPhone or Android devices.

I’m not mentioning this to bring attention to myself, because I think that is a really bad thing to do, but to give you an idea to try. Giving this way is fun and freeing. It frees me from some money worries–strange how generosity does that. Givers usually are blessed more in return in the long run than they ever give, but that shouldn’t be the motivation; it is a cool thing that seems to happen.

Do you think this is a good idea? Also, if you already do something like this, or if you try it, let me know how it goes.

Tithe, Matthew 23:23-25

This week’s money and stewardship devotional from the four Gospels* is about tithe in Jesus words from Matthew 23:23-25.

“Woe to you, teachers of the law and Pharisees, you hypocrites! You give a tenth of your spices—mint, dill and cumin. But you have neglected the more important matters of the law—justice, mercy and faithfulness. You should have practiced the latter, without neglecting the former. You blind guides! You strain out a gnat but swallow a camel. “Woe to you, teachers of the law and Pharisees, you hypocrites! You clean the outside of the cup and dish, but inside they are full of greed and self-indulgence.”

There a lot of Old Testament Bible verses about tithing (giving a 10th), but not very many in the New Testament. A lot of people wonder why Jesus didn’t talk much about tithe. Jesus talked most often about the kingdom, and he mentioned money more than he did heaven and hell, but why didn’t he teach more about tithes and offerings? Perhaps the answer to this question is in those verses.

If you look in the OT, you will find many verses about tithes and offerings; however, they aren’t listed in the most enduring 10 Commandments. Wouldn’t you think that if tithing was that important, it would be included in this top 10 list?  Let’s take a look at the Commandments. You could say that the first commandment is about money: “you shall have no other gods before me,” since we often make money a god. The second commandment: “You shall not make for yourself a carved image, or any likeness of anything that is in heaven above, or that is in the earth beneath, or that is in the water under the earth,” could be related to money and possessions, since we often bow down to the things we own, or careers, or our investment portfolios. The eighth commandment against stealing is again about money and possessions–God commanding us not to take what isn’t ours, and some have said that being unjust in business dealings and not helping the poor are also examples of stealing. Malachi 3:8-9 compares withholding our tithe as stealing from God. The tenth commandment “You shall not covet your neighbor’s house… or anything that is your neighbor’s” forbids us from desperately wanting what our neighbors have.

Interesting isn’t it, that of the 10 Commandments, 40% of them can be related to money and possesions. Interesting too if you include the 4th commandment against working to earn wages on the Sabbath; then 50% relate to this subject. Of the 313 words that make up the 10 Commandments, 30% of them talk about keeping the Sabbath holy. The Sabbath is that one day of the week that we rest, don’t work to earn wages, and instead worship the Lord.

Jesus didn’t mention tithe more for possibly 3 reasons. 1)  it wasn’t important anymore, and he wanted his followers to give whatever amount they feel compelled to give.  2) it was mentioned enough throughout scripture, and he didn’t think it was important to mention it more than in Matthew 23:23.  3) he didn’t want us to  become legalistic about it and revert to the ways of the hypocrites he preached against. My vote is on #3.

I think in Matthew 23:23-25 Jesus makes it clear that we are not to neglect giving our tithe, but we are also to practice the more important matters of the law–“justice, mercy and faithfulness.” Jesus also wants us to do away with “greed and self-indulgence,” to help others, and to avoid stealing from God when we go to worship him on the Sabbath, including with our tithes and offerings.

In conclusion, tithing is not a commandment; it is not something to be legalistic about while our hearts remain sick, but it is a principle Christians practice. This is an enduring act of faith and worship, and it is nothing new. It is a conclusion reached by most theologians and the many fathers of the faith, since the inception of Christianity.

*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 nineteenth post in this series.

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.

Should I Buy an Ereader? and The Benefits of Waiting

I love to read, so a few weeks ago I had a burning desire to purchase an Ereader. I had a lot of reasons for purchasing one, and came up with a great list of my rationale:

  1. Ease of getting a book and reading it without the delay of going to the bookstore or library
  2. Ability to look up words in the dictionary with a simple touch, or references on the web
  3. Inventory quotes that I can later use for blog articles I am working on, and for a book someday
  4. Portability, since I could have all the books I am currently reading, which is about 4 right now, and easily take them anywhere
  5. Read about book recommendations, and then quickly add them to my wish list on the device
  6. Less distractions, since when I am reading on the laptop, I get distracted checking email, Facebook, and Twitter

These reasons gave me excellent justification for the purchase. I had a few hundred extra dollars from a writing project, and a little gift money. I prayed about it, since in the end it is God’s money, and it would be his Ereader. Since I provide financial counsel to hundreds of people, I have to follow my own advice and “ask the master what to do with the master’s money.”

I thought about it a lot, prayed a little, and compared products. I felt it was okay to purchase, with my initial allowance of $150. However, that quickly expanded when I saw all of the products being offered. I could easily buy just a good Ereader, like the new Kindle Paperlight. All Kindle Ereader dedicated products have all the great tools for reading, weeks of battery life, and the great Amazon library and services. Then I started to wonder about the Kindle Fire products. They allow you to do much more (in color) in terms of Internet and email, since they are really mini tablet computers. These can be purchased from $150 – $200, so I could stretch the budget a little.

If I was going to buy a mini-tablet, this expanded my choice of products. The Kindle Fire’s were somewhat limited in their application to computing, so I looked at the ones from Samsung and Google. Google Nexus 7 is newer than the Samsung 7-inch mini-tablet, has a faster operating system and runs the latest Android Jellybean system. The 8 GB was $199, and the 16 GB was $249. More memory was important, since the Nexus doesn’t have expansion slots (unlike Samsung’s). Now my budget stretched to $249, about $100 more than I started with.

However, I felt compelled to wait, and not to purchase. During this pause some interesting things happened. The Apple iPad Mini was introduced. iPads are amazing machines, but their price starts at $329 and goes all the way to $659, depending on memory capacity, WI-FI, and Cellular capability. Then there was talk that the other manufactures were lowering prices, expanding base memory, and offering new devices. More reasons to wait and think about it some more.

During the wait, I was given a few books to read. One was a free from a publisher, to review a theological tome on possessions. None of these were in digital format. A had a few books I wanted to read digitally, and I was able to download them from my local library and read them on my laptop. I downloaded the Kindle app and it works great. I also downloaded the newsreader and customized it for the periodicals I wanted to scan.

My burning desire to purchase an Ereader diminished. Although I would still like to have one, I am enjoying reading the various formats of books, magazines and newspapers, and the money is still in savings. I can still do everything I need to do quite nicely for personal computing, entertainment, blogging and writing.

Waiting taught me a few things. It is good just to wait and to refrain from purchasing things. It felt good to be in control. I used the devices I already have, and now I don’t have another one to maintain or another battery to charge. Having a cell phone, laptop, and internet TV, I can do everything I need to do. I would like to have a smart-phone PDA, and either a tablet or a mini-tablet, and in a couple of years I will need a new laptop. However, with all the new things Microsoft is trying to do with Windows 8 to blur the lines and capability with smart phone’s app driven world and touch screen capability, I think the wait will be good. With my next technology purchases, I am considering going all Apple for the simplicity, ease of use, and fewer technological messes than Windows based systems always seem to have. The benefits of waiting mean I will get better technology in the future since products are constantly improving, or I can buy a good used device while protecting my savings in the meantime.

If you are considering a purchase, do your research, and take your time to wait. In the end you will probably make a better decision about what you really want, while protecting your savings in case some emergency pops up.

Greed, Matthew 21:12-13

This week’s money and stewardship devotional from the Four Gospels* is from Matthew 21:12-13, regarding Jesus’ reaction to business being done in the temple.

12 Jesus entered the temple courts and drove out all who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves. 13 “It is written,” he said to them, “‘My house will be called a house of prayer,’ but you are making it ‘a den of robbers.’”

There are few reported instances recorded in the Bible where Jesus became angry–and since this one involves money, we should probably take keen notice.  Surely this is the most memorable one, when Jesus overturned tables and drove merchants out of the temple courts.

I think its important to note that in this verse and elsewhere Jesus never condemns business. Jesus seems to have an ambivalent attitude towards it, but he does seem to spend time in the market place during his ministry. Here Jesus objects to the use of the temple, the place where one goes to focus on God, to make financial transactions: changing money and selling animals to be used for sacrifice.

Money changers exchanged foreign currency into locally used money. Monies were needed in the temple for temple tax and other things such as offerings. We are not sure if the money changers or the temple priests charged a fee for the transaction, but I assume there was always a ‘spread’ between what they exchanged it for, and what they got for it when they moved money between countries.

Doves where being sold to be used as sacrifices in the temple, for the pilgrims visiting Jerusalem as well as for residents. The coming Passover was an important holiday, and business was probably good for the money changers and dove sellers.

Jesus was referring to the temple as being Holy, but man was corrupting it. Imagine going to church, and instead of just walking into the church’s foyer to hang your coat, get a bulletin and then enter the sanctuary to get ready for service, you encounter people selling a lot of things, like a crowded marketplace; people bartering, goods beings exchanged, and cash registers k-chinging.

The Sabbath in the temple or in the church is to be a time of worship, teaching, prayer, communion, reflection, repentance, learning and experiencing God without these transactions. Financial dealings can be one of the most distracting things; thinking about profit and loss changes our motivation. I am not sure if everyone entered through this financial process, but I imagine it was probably chaotic, resembling a ticket line–congregants entering, getting their money out, exchanging and selling. I think Jesus objected to three things: 1.) focus on money and not God, which you couldn’t avoid as you made your way through the courts  2.) a barrier of needing to have wealth to enter worship, maybe not required, but since it was embarrassing for those that lacked funds, it probably prevented some from attending  3.) the temple being used to make money off of God.

Again, few instances are recorded of Jesus getting angry; he was probably mad about these three things. How does this translate to today? Interesting question, few churches are integrated today; most people attend a church with other people in their social economic class. Even if our church has people that are above or below us, do we know them, are we in community with them? The doors are just not that open or welcome to the poor in some upper class churches.

When we go to church, God wants to encounter us, and we should want to encounter God. Our state of mind probably should be a little different from what we would have when going to the shopping mall or to a restaurant to meet people. Business connections should not be on our mind. Selling something to the church or to fellow church members shouldn’t be our motivation. Dressing to be noticed or driving the coolest car to impress probably shouldn’t be on our minds either.

Jesus doesn’t care about that junk; he wanted to go to the temple with his followers and disciples to have a good worship one last time before being killed. It is not surprising that he got angry as he entered his father’s house. Jesus couldn’t worship in a temple of corruption, so he cleansed it–turning the tables over and scattering the merchants away.

Much the same way, Jesus wants us to have pure hearts in church and in our dealings with friends and neighbors in community. Jesus came for all sins, including those of greed. Greed in scripture is described as a really dark sin that cuts deep into our hearts, and it is one of the things Jesus wants to clean from our hearts in order to set us on a different course.

*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 eighteenth post in this series.

Tax Planning: In Uncertain “Fiscal Cliff” Times & Year End

With the completion of the presidential elections there has been much discussion focused on the so-called “fiscal cliff”. Many economic forecasts have stated that President Obama and Congress need to reach some agreement to avoid the fiscal cliff if the nation is to avoid another recession.  As you probably know, the Bush tax cuts are set to expire at the end of 2012 and there are many other tax changes set to take place in 2013, such as the implementation of the taxes from the Obamacare health care plan. Given the disagreements between the President and Congress, it is difficult to predict what will happen to all of the tax cuts that are set to expire at year-end and what the outcome will be.  Year-end tax planning is always a challenge, but many long-time tax practitioners have noted that this could be the most challenging environment they have faced.

Whatever the outcome of the any agreements between Congress and the President, it is likely that at least some taxes will be increasing and it is almost certain that dividend and capital gains tax rates will not be going down in 2013.  Maximum long-term capital gains rates are set to increase, generally, from the current rate of 15% to 20%. Dividends will be taxed at ordinary income rates instead of the current capital gains rate of 15% in most cases.  The top marginal rate will increase from 35% to the “pre Bush rate” of 39.6% and the rates for other income brackets would increase as well. Regardless of the outcome of any agreements reached between the President and Congress regarding the expiring Bush tax rates, taxes on investment income will rise next year because of the funding provisions in the President’s health care plan by at least 3.8 percent on taxpayers with higher investment income . Beginning in 2013, an additional Medicare hospital insurance tax will apply to wages or self-employment of married individuals with earnings exceeding $250,000 or single individuals with earnings greater than $200.000.  There will also be a new 3.8% net investment income tax for individuals exceeding these same income thresholds.  If Congress and the President do not make changes, the combined effect could result in an average tax hike of approximately $3,500 per household for up to 90% of Americans, and in a much higher rate for upper-income taxpayers.

It is reasonably likely that rates will be going up for investors, small business owners, and high income individuals. Traditional tax planning strategies to defer revenue and taxes may not be applicable this year.  Taxpayers should consider an approach that involves addressing many of the possible changes directly while also making use of all options for deductions, credits, and other tax-advantaged opportunities to lower their taxable income. Planning for these changes should begin now, since it may involve significant modifications in your tax strategy.

Since most advisors are confident that capital gains rates and rates on investment income will be higher next year, taxpayers may want to consider some of the following strategies concerning the potential for higher rates in 2013:

If your portfolio includes significant long-term capital gains, you should take advantage of the lower rates in 2012.  For upper-income taxpayers who will be facing rates of 20% (barring any changes) on capital gains and the additional 3.8% health care tax on investment income, their top rate will rise to 23.8% versus the current capital gains rate of 15%.  It may pay to take advantage of the lower rates in 2012 by selling investments with potentially big profits.

While advisors often recommend that taxpayers offset their capital gains by selling investments with capital losses, it may be beneficial to hold off incurring losses to offset against potential gains in the following year that will be taxed at higher rates.

Consider various strategies to accelerate ordinary income into 2012. If you have flexibility on when you can receive payments of income before year end, consider that the income may be subject to lower taxes this year than in 2013. Again, this is counter to tax strategies that are often employed to defer taxable income. Similarly, taxpayers would normally look to increase deductions before year end; it could be beneficial to defer expenses such as charitable deductions until the following year when tax rates will likely be higher.

Another option may be to convert a traditional IRA to a Roth IRA this year, if a conversion otherwise makes sense.

You may want to move dividend paying equity investments into tax deferred or federally non-taxable investments such as municipal bonds.

Many taxpayers are accelerating gifts under the current $5 million ceiling on lifetime giving. Not only is there a good chance that estate tax rates will rise (the scheduled Sunset provision is for rates to revert to 55%) but the exclusion amount for estates and gifts will revert to $1 million.

Some other acceleration strategies include exercising stock options, taking bonuses, foregoing 1031 elections, and electing out of installment sales.

The alternative minimum tax (AMT) will apply to 2012 income for many more Americans if not indexed for inflation. At the end of 2011, the AMT exemption was $74,450 for married taxpayers and $48,450 for singles. In 2012, the AMT exemption is $45,000 for joint filers and $33,750 for single filers. In making their estimated payments, taxpayers will need to consider that for 2012 they could be exposed to a higher AMT tax if Congress does not revise the exemption amount.  Additional care will need to be taken to help avoid potential AMT taxes.

Business owners will want to look at accelerating taxable income, but they will also need to evaluate the fact that the Section 179 deduction can be significantly reduced in 2013.  Under Section 179 of the tax code, small businesses can deduct the total cost of some qualifying property in the year it is placed in service, within certain limits, rather than depreciating it over time. The limit on the cost of property (including real property) that can be expensed is now $139,000, but it will drop to $25,000 if no changes are made. The total value of the equipment purchased cannot be higher than $560,000. In 2010 and 2011, businesses were allowed to expense as much as $500,000 in equipment and property on one year’s tax return. Additionally, bonus depreciation which was 100% in 2010 and 50% in 2012 is set to expire in 2013.

Business owners need to evaluate the potential for immediate write-offs and 50% bonus depreciation for capital purchases made in 2012 versus being stuck with the longer term depreciation MACRS depreciation schedules for purchases made in 2013. It may pay to make planned purchases of equipment in the current year. On the other hand, faced with higher tax rates, businesses may not want to elect Section 179 or bonus depreciation treatment to preserve more deductions for future years when the rates are scheduled to be higher at least for individual owners operating as Schedule C or as pass-through entities.

Like so much in life, we can only plan ahead, confidently, based on what we know to be fact.  Today, we know that tax laws will change back to “pre-Bush tax cuts” on January 1, 2013.  Of course, Congress and the President can intervene, before year end, or even afterwards (and make new rules retroactive.)  This unprecedented level of uncertainty makes good decision making difficult. Consequently, seek tax advice about your specific circumstances.  If you have large, pending transactions, the timing of which you can control easily, then this is a good year to engage your advisors soon in order to harvest sizable benefits.

*Kevin Koval, CPA, ABV, CFP and Roger C. Nagel, CPA, CMA of Nagel, CPAs. They can be reached at 505-898-2558 or email They are located at 2240 Grande Blvd SE Suite 103, Rio Rancho, NM 87124.

Time to Check Your Car’s Battery

Fall always seems to be the best time for me check my car’s battery. You might want to also, if you don’t want to get stuck somewhere without a good battery. This is especially true for folks driving through not-so-safe neighborhoods now that it is getting dark much earlier, or up north in our cold Winters. Most auto parts stores will check it for free. For about a week our 1998 Windstar Van’s battery was showing signs of weakness.

Finally yesterday, the battery went out- it just didn’t quite have enough juice to start it without a jump start. After my wife checked Quicken, we  determined that we bought the previous battery from Auto Zone 5 years ago. We quickly ruled out that we did not have any warranty left after that long, on a 60 month battery. While I called for prices of batteries from Auto Zone, O’Reilly’s and Advanced Auto Parts- chain part stores in our area, she went through the inventory of coupons. The only one she found actually came in the mail the same day, $20 off purchases of $100 or more at Advanced Auto Parts.

Since the Van is 14 years old, and over 150,000 miles on it, I just wanted the lowest cost battery. Calling Auto Zone, O’Reilly and Advanced the base battery was rated for 60 months but had a 2 year warranty. O’Reilly and Auto Zone tied at 99.99, and Advanced was $101.99. For a couple of bucks, I bought battery terminal grease and terminal fabric washers- both to help minimize corrosion you sometimes get since the batteries have highly corrosive sulfuric acid. After taxes, those extras and the $20 off coupon, my bill came to $90.34. That cost included a $12 credit for giving my battery to Advanced to recycle.

Had I not traded in the battery, what they call the battery’s ‘core,’ then the cost would have been $12 more. They call it the core, since the core part of the battery that is recycled is the battery’s lead core. The plastic and liquid chemicals are probably recycled too, but the lead has commercial value. You can get $10 – $15 for most batteries,  so if you have any old batteries laying around the garage from cars, lawn mowers, boats, RV’s or other equipment you can sell them for cash. Advanced Auto Parts will only give you a $5 gift card for old ones, but the local Interstate Battery store gave me $12 last Spring for an old big Marine battery I had for a sump pump back-up system- shop around.

I was a little surprised by the battery’s cost. Gone are the days I remember when you could purchase a battery for $35 – $75 for most cars, now almost all decent batteries cost near or over $100. Low-cost or cheap batteries are a thing of the past.

The manager of the Advanced Auto Parts, Brent was very polite, and installed it for free in the company’s parking lot. He tested the old and new battery to make sure one was bad and the new one was good, since they sometimes come from the factory bad. I didn’t have to get my hands dirty, or fumble around popping in a new battery in the dark.

While you are checking your battery, you might want to also check the windshield washer fluid and wipers.

Financial Thanksgiving

The attitude of being thankful is one of the foundational feelings we can have for helping us do well financially. When we are thankful for the things we have, we are content and are not in the “I’ll just be happy if I have…” mindset. Contentment and satisfaction are internal feelings; they can’t be obtained from external sources other than God.

When I want something that is beyond my basic needs, I am telling myself that I will be more happy and satisfied when I have obtained it. We all know that after we have purchased something we desperately wanted, in a short while we will want something else again. It seems as if the cycle never ends. Emotions really come into play in this game, much more than logic (except of course when I want new tools 🙂 ). Marketing firms know just how to craft ads to make us feel incomplete, and to suggest filling that gap with their products. We are emotional beings, and our emotions can often fool us.

If I had been a more thankful person, I would have avoided purchasing many things I have over the years, and I would have borrowed a whole lot less money. In the end I would have had more money in savings and investments, and I probably would have given more money away too- bringing more joy to others, to God, and to myself. When I own fewer things, I love having more time on hand, since everything comes with a maintenance schedule. Thanksgiving might be the best American holiday, for it is a great reminder for us to be thankful for all the things we have. Being thankful and content with what we have makes us happier people, something we all want. It is really sad that the day after Thanksgiving is the largest shopping day of the year. In addition, it can be one of the worst times to buy things, since I reported earlier that prices go up on many items during the Holidays.

The most quoted Bible verse of all times is probably the 23rd Psalm, which starts: “The Lord is my shepherd: I shall not want” (NKJV) and “The Lord is my shepherd, I lack nothing” (NIV). Most versions have worded it similarly to these two–either I shouldn’t want beyond my basic needs, or what the Lord provides is totally satisfactory and in him I don’t lack anything I need to feel content. Both ways of looking at it speak volumes to me in the way I need to think about material things and possessions.

My Pastor, Rich Nathan, wrote about Thanksgiving recently in his monthly congregational e-mail:

Like Advent, Christmas, Lent and Easter, Thanksgiving offers an important rhythm in our year to practice something essential to human happiness – in Thanksgiving’s case, gratitude!

Thanksgiving: Our Response to God’s Extravagant Grace

The author, Os Guinness, quotes a famous artist who said, “The worst moment in the world for an atheist is when she is genuinely thankful, but has nobody to thank.” When your heart bursts with gratitude at the birth of one of your children or grandchildren, or you look at a gorgeous sunset, or you hold your spouse and you are so happy that you cry tears of joy, or you have a prayer miraculously answered – how horrible it would be to be filled with gratitude and have no one to whom to say “thank you.” Christians have someone to say “thank you” to – Jesus Christ.

It is often said that for Christians salvation is all grace and obedience is all gratitude. My love for you, Jesus, is my grateful response to your love for me. I love you, Jesus. You have been so good to me. My tithe is my way for me to say thanks to you. Whenever you write a check and put it in the offering basket, whenever you serve in inconvenience, whenever you make the hard choice of showing kindness to someone who has treated you shabbily, you are saying, “Thank you, Jesus.”

Michelangelo once did a pencil drawing of the Pieta for a friend. With the dead body of Jesus supported by angels at her feet, Mary doesn’t cradle her son as in Michelangelo’s other renderings. In the pencil drawing of the Pieta, Mary raises her hands and her eyes are lifted towards heaven. On the vertical beam of the cross, Michelangelo inscribed a line from Dante’s Paradise, which is the focus of the drawing. The line is this: No one thinks of how much blood it cost.

It is very rare that we kneel with our eyes turned upward to heaven and say:

I haven’t said thank you recently for how much blood it cost for me to know you. I haven’t said thank you recently for how much blood it cost for your church to exist. I haven’t said thank you recently for how much blood it cost to forgive my many sins and to show me grace despite my frequent disobedience.

Gratitude – a recognition that we have nothing that we haven’t received – will keep us as a large church from becoming full of ourselves. It is gratitude that will get our eyes off of our accomplishments and onto Christ’s accomplishments. St. Augustine once said that the Christian life was supposed to be a Hallelujah from head to toe- the praise of God saturating our lives.

Thanksgiving: The Neglected Key to Joy

One of the biggest happiness boosters (this was discovered through a grant from the National Institute of Health) is through practicing gratitude. How do you practice gratitude?

One of the exercises that psychologists gave to people was a gratitude journal; taking time every day to write in a gratitude journal things for which they were thankful. What psychologists found was that if people took time to conscientiously count their blessings every day, life satisfaction markedly increased in just six weeks.

Martin Seligman, the Father of Positive Psychology, has tested similar practices at the University of Pennsylvania and in huge experiments that he’s conducted over the Internet. Seligman believes that the single most effective way to turbo-charge our joy is to make what he calls a “gratitude visit.” This means writing out a testimonial thanking a teacher, or a pastor, or a grandparent, or anyone to whom you owe a debt of gratitude. Then visit that person and read your letter of appreciation to him or her. Seligman said that the remarkable thing was that people were measurably happier a month after they paid a gratitude visit to the person to whom a debt of gratitude was owed. Saying thanks produces ongoing joy.

Seligman also recommends what he calls “three blessings,” taking time each day to write down three things that went well that day (in other words, counting your blessings), taking time to journal what’s going well and intentionally savoring good moments by journaling them. Why not consider creating a gratitude journal, paying a gratitude visit, or savoring good things in your life by journaling them?

Thanksgiving: The Need to Practice Becoming a Thankful Person

Thankfulness is something we have to practice. It is like learning how to play the piano. Just as anyone who wishes to play piano well has to practice scales over and over again, thanksgiving must be practiced continually. One thing our family does is to go around the table at Thanksgiving and share at least one thing for which we are grateful. Saying “thank you” does not come naturally to us self-centered people, who believe that all good things are ours by way of entitlement; who are naturally greedy; or who are forgetful. You know you have practiced the scales of thankfulness long enough when you can play the really difficult melody of “thankfulness in all situations” (Philippians 4.11-12). You have become a skilled giver of thanks when, instead of grumbling and complaining, instead of sinking into self-pity and depression, you are able to give thanks in all circumstances!

Annuity Guarantees and Trusting Insurance Companies

Hartford Financial is seeking ways to lower its exposure on some annuity contracts it sold. Stories like this make people wonder if they can trust insurance companies and believe the annuity guarantees. I believe most insurance companies are very trustworthy and the income guarantees are good, but consumers need to be careful.

Insurance is the bedrock of people’s financial plans; it helps to avoid financial disaster in car accidents, home damage or theft. Insurance companies are there if a family’s breadwinner dies or becomes disabled. These companies have done a great job of insuring business property and employee’s health. Policies help prevent financial disaster if businesses are interrupted because of fire, or the death of owners or key employees. With all of the bad press insurance companies get, in general they do a commendable job of pooling and transferring risk. However, when a few insurance companies do things that are disadvantageous to consumers, we should take notice and learn from it. Case in point–Hartford Financial, which I will discuss more later in this article.

When I sold insurance products for 12 years back in the 80’s and early 90’s, it was extremely difficult to combat competition. Why, you might ask, wasn’t I good at selling?  I never made million-dollar round table, the ultimate sign of success in the insurance business. However, we somehow managed to support a family of 4 in a nice neighborhood for a dozen years on straight commission. We were never late on mortgage payments, tithed 10%, and took some nice vacations.  We always employed a needs-based approach to selling insurance, annuities and mutual funds. Early in the morning I’d arrive to study for the professional designations I later earned: ChFC- Chartered Financial Consultant, and CLU- Chartered Life Underwriter, and I’d come home late at night after appointments. My knowledge and skills helped me have few complaints, and I was able to retain more than 90% of my clients.

Competition was fierce. I’d try to sell products to people who were shown something better from another company. It was very difficult to convince clients that my product was better even when mine paid an interest rate that was lower, had a higher premium, or did not have as fancy design features as others did. I told prospective clients that, yes, my product didn’t ‘look’ as good, but it was good and my company would be around. They didn’t understand when I explained that the other company was taking on more risk when it made bigger promises. As I look back, the companies I represented are still around, and many of the ones making big promises back then have folded, have been sold, or are now going through what Hartford Financial is. Hartford is now attempting to relieve itself from the risk it has from the annuity guarantees it can’t support any more in some of its annuities.

Don’t get me wrong, I like annuities, for the right person for the right reasons. They offer nice tax deferment, and some guarantees on income and death that mutual funds cannot. The charges can be expensive, but you get what you pay for if you value those things. On the other hand, you have to wonder if you can trust the insurance companies offering those guaranteed benefits, since purchasing an annuity is a long-term venture.

Times haven’t changed. About 10 years ago the universal life industry blew up, and many people ended up with worthless contracts or were forced to pay very high increased premiums. Some of the very companies I was trying to compete against experienced these problems. Today Hartford Financial is trying to get out of having to live up to the promises they made to customers. They sold annuities with really good guarantees, but now they are faced with the fact that they don’t have enough assets to remain as financially solid if they don’t come up with a way to lower their risk. Read the article in the Wall Street Journal. They are applying to regulators to be able to offer clients cash if they trade in their income guarantees.

It has been said that you never shop for the lowest-cost parachutes and surgery, so you shouldn’t shop for the lowest-cost insurance. When you buy a product of any type from an insurance company, you have to ask yourself if you can trust the company. Do the rating agencies like AM Best, Duff and Phelps, Moody’s, Fitch, and Standard & Poor’s rate them well for financial stability? When looking for insurance, price is surely important, but trust is also an important factor. Will the insurance company be able deliver on promises, including keeping the client’s cost down for the long haul? I ask myself if they are trying to attract me with the best features and lowest cost. Those are the ones I stay away from.  They can usually do that only if they are taking more than average risk, or if they are doing it at a disadvantage to existing policy owners.

When Hartford was selling these very competitive insurance and annuity contracts, they had a great story, great ratings, and well trained, great wholesalers. Often they led the industry on sales, partly because their contract designs were very aggressive, and at times their internal charges were very competitive. We can learn from this. If we are considering an insurance product, we have to ask how are they rated and whether they have a history of always treating both new and old customers well. Are they offering the best and most competitive contract features in the market, or are they too good to be true? These considerations should give you some clues about which companies you can trust.

Is God Generous? Matthew 20:1-16

This week’s money and stewardship devotional from the Four Gospels* is about Jesus talking about God’s generosity and fairness from Matthew 19:28-30, 20:1-16.

1 “For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. 2 He agreed to pay them a denarius for the day and sent them into his vineyard. 3 About nine in the morning he went out and saw others standing in the marketplace doing nothing. 4 He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ 5 So they went. He went out again about noon and about three in the afternoon and did the same thing. 6 About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’ 7 ‘Because no one has hired us,’ they answered. He said to them, ‘You also go and work in my vineyard.’ 8 When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’ 9 The workers who were hired about five in the afternoon came and each received a denarius. 10 So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. 11 When they received it, they began to grumble against the landowner. 12 ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’ 13 But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’ 16 So the last will be first, and the first will be last.”

Do you ever wonder if God is fair? This is a question we often ask ourselves when going through difficulty, or when we see other people enjoying things that we don’t have. This always leads us into the trap of comparison. From comparison we move into self pity, judgmentalism and envy. To be honest I don’t know if God is fair in our eyes. From our viewpoint we see fairness in all the blessings that God bestows upon his children, in this time. We see fairness from our post-fall, pre-eternity perspectives; however, God is eternal, and He thinks in terms of forever. So from the start we have a flawed viewpoint. Some people struggle with having enough money, or with not having as much as someone else they might be comparing themselves to. Money seems to be the equalizer or the great device we use to measure how successful our life is. God sees greatness a lot differently than we do. I think that is why Jesus used money in this parable.

While I am struggling with the concept of God’s fairness, grace keeps popping into my mind, as does justice.  Strangely in God’s Kingdom both exist quite comfortably. On one hand, God is just. He judges us and finds that we fall short; because of sin we are damned. On the other hand, because of Jesus’ propitiation He paid for our sin, and we are saved. We must only turn towards Jesus. This beautifully illustrates that God is more than fair, while being just at the same time.

In the parable one worker feels that he is being mistreated because he has worked harder than his co-worker, yet both were paid the same wages. Hard workers, people that show up to work early, or people that come to faith early in life, sometimes live with the old fairness-doctrine in their minds. Since Jesus exchanged sin with grace, maybe we ought to trade in our “self justification and works equals more” mentality with one that embraces God’s grace, God’s new economy.

In God’s grace we see a generous God–one who doesn’t repay us equally for our bad choices. Out of God’s grace He gives us eternity, and in the present time He blesses us immeasurably. When we walk around with a fairness mentality, we fail to see the grace he extends to us and to those around us, and then we fall into judging others, and according to the 15th verse we are envious, wanting God to extend grace to us but not to others because we are better. In so many words Jesus says:  “Watch me! Actually, my grace is so great that I am going to reach deep and lavishly bless those whom you look down at. Oh, you religious people, those who look back at people at the back of the line, I’m going to reach way back beyond even them and set them way out in front of everyone else.” Furthermore, I think He is saying, let go of your measuring stick of wealth, let go of the things you hold onto, for I am not a stingy God but am generous: “you who have followed me… for my sake will receive a hundred times as much and will inherit eternal life.” Matthew 19:28,29

*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 seventeenth post in this series.

14 Ways to Save Gas

Gasoline prices have trickled down in the last few weeks. However, they are still about double what they were 4 years ago, making it important to get the most possible mileage out of each gallon of gas. Some of these tips come from “20 ways to save gas this summer” Popular Mechanics 7/2012 magazine. Here are are some of their top suggestions and a few of my own.

  1. Right turn only route: The other night on the way to a small group meeting, I took a different route to the meeting from the one I took back to our home, and my wife wondered why. The reason is that I like right turns better. No, I’m not OCD–well okay, I am some, but I am also impatient. I know I can make more right turns on red and spend less time at traffic lights. This increases fuel economy 3% according to the article.
  2. Avoid traffic: Sitting in traffic for long stretches of time consumes a lot of fuel, so take a less congested route if it isn’t too far out of the way. Many people have GPS navigation systems; they are very helpful to people who aren’t street savvy, since they can help you find alternate routes.
  3. Avoid high ethanol fuels: Although most gasoline has some ethanol today, avoid the high E fuels since they have less energy, causing reduced mileage–15% ethanol has 30% less energy.
  4. Inflate tires: Putting them at their proper level makes them wear better and produces better mileage. Low air increases rolling resistance, which is bad for gas mileage.
  5. Tuneups, oil changes and air filters: These simple maintenance items keep the car’s engine running more efficiently. Follow your owner’s manual and visually inspect the items too.
  6. Eco versus sports tires: Sporty tires are designed primarily for handling, so if you don’t mind a little less cornering ability at higher speeds, look for tires that are designed for high gas mileage
  7. Close the tailgate if you have a pickup: This seems to go against logic–you would think without the tailgate open, air would flow more freely over the back. However, research indicates that most trucks get better mileage with the tailgate up. The flow of air reacts differently coming off the big front area, and it creates strange air currents if the gate is left down, as air flows towards the back of the truck. Or maybe this is just propaganda the truck makers put out because they want you to see the manufacturer’s name advertised across the closed tailgate.
  8. Empty trunk: Store tools, golf bags and other rarely used items in your home. Why pay to haul them around if the items are seldom needed?
  9. Windows up/windows down:  At lower speeds during the warmer months, shut the AC off and open windows to save gas. However, at higher speeds, the open windows create drag. Crank the windows closed, and turn the AC on.
  10. Driving the farthest distance first: Hot engines get better gas mileage, so if you are running a lot of errands, head to the farthest one away first, then work your way home. If we are grocery shopping, we take blue ice and a big freezer bag (Costco sells a huge rugged one) to keep perishables fresh.
  11. Avoid short trips:  Package errands together so you aren’t planning so many short trips. This is better for your car too, since short distances leave water condensation in exhaust systems, leading to rust.
  12. Remove van seats. Carrying around an extra hundred pounds or more costs gas. If you have an older van, the seats are probably easy to remove. However, if the kids are grown and you seldom take passengers, store the seats in the garage or basement. Watch your back, they can be heavy and clumsy. Ask a neighbor to help you carry them. Most of the newer van’s seats retract into the floor and probably are not removable.
  13. Coast to traffic lights in gear: This uses less fuel than shifting into neutral. Don’t be overly annoying about doing this since it can induce road rage. But if it’s obvious that the light ahead is red–you can see cars are piled up and opposing traffic is in the intersection–chances are you can coast.
  14. Accelerate a little faster: This is the biggest shocker to me.  Popular mechanics proved in several tests that if you accelerate at double your car’s fastest time to 60, then you are most efficient. The wives of slow frugal drivers can rejoice!  If your car can hit 60 in 7 or 8 seconds, then take about 15 seconds to get up to speed. However, if getting on the highway, let-r-rip; put the cell phone down, floor the baby, and check your mirrors, and glance over your shoulder to make sure no one is in your blind spot. Now you have a good excuse to grab a stop watch and find a lonely stretch of road to check your car’s 0 – 60 time. Have fun!

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.

Perspectives on Wealth from a Missionary Doctor

I asked Dr. Tim Kubacki D.O. to share some of his perspectives about wealth, particularly as they relate to traditional American views. Tim and I served together at the Delaware (OH) Vineyard church plant back in the late 90’s, but now he lives in Africa as a missionary doctor. Tim is a very humble and gentle man and he never came off being wealth centered as he notes below. Tim started the Vineyard Columbus free health clinics in the 90’s.

First let me give you some background about Tim. He practiced emergency medicine in Central Ohio for 15 years, and from 2005 – 2012 was in Brazil in the Amazon basin, taking health care and the Good News to the most remote villages he could find (in the jungles for 3 years by motorbike and on the rivers for 3 years by boat). He has been in Angola since April 2012. He lives at a mile elevation and the climate is nice (especially compared to the climate on the equator during his 6 years in Brazil). It is mountainous desert, with a long dry season and a short wet season. The languages are Portuguese and various tribal languages. His days are variable. Sometimes he helps at several hospitals for long (almost 12-hour) shifts. The work is plentiful as the health care need is great there after 30 years of war and little infrastructure. The gospel need in the cities isn’t great, as there are plenty of churches (quite religious ones but lacking in love for God and for each other). In the rural areas, there are many tribal groups with no gospel presence at all, and it is these groups that Dr. Tim is targeting with his health care ministry. He has three small airplanes and two pilots, and he has begun to visit these groups to introduce modern medicine and Jesus. If you are interested in learning more about Tim, visit his blog.

Here is what Dr. Tim shared with me:

I think that my views on money have changed radically over the past ten years or so. Much has to do with the global perspective that I’ve developed as I lived in developing countries. I once had a doctor friend (making over $300,000/year) say in the course of a conversation, “One day if I become wealthy…” In the US, we are like this friend of mine, completely ignorant that even the poorest of us in the US are attempting to serve God and money (though we would all deny it) and Jesus said that it simply cannot be done. This has created in our churches a radical, comfortable, lukewarmness that allows us to attend services and be too busy (chasing what money can buy) to have concern for the rest of the world (Jesus’ new commandment), most of which both live apart from the Kingdom of God and suffer tremendously from sickness and poverty (so in need of the resources that we hoard).

Many of those seeking to walk with Jesus in the States don’t realize the bondage they are in as they try to serve Jesus and money. I can attest to this from personal experience. I had to get really tired running the US race and leave, only to finally recognize that I had been, indeed, trying to serve two masters. After entering the developing world (where life is necessarily radically simplified), I was able to look back and realize what bondage (“more, more, more…”) I had been in, and the damage that it had done to me. The “more, more, more” bondage was not only material, but spiritual, as well. The American dream has something to do with never being satisfied and this attitude is sadly seen also in our churches, however the radical lack of contentment in US Christians validates that our hearts aren’t right. I’ve learned that desire for the Kingdom of God minus distractions equals contentment. It’s really tough to maintain a Kingdom focus and experience contentment while chasing many distractions. And, of course, less money always yields less distractions, period.

I had a very real desire to have a Kingdom focus while living in the States (as do so many U.S. Christians), but because I was trying the impossible (serving two masters, money -and everything it buys- and Jesus), pulling it off was… impossible! I pursued money (and all that money buys – comfort, security, leisure, etc) and therefore could not serve Jesus, though this went largely unrecognized until I moved away and lived with far less.

I’ve learned first hand that more money and more things do not yield happiness, joy, peace, etc, in this earthly life. I’ve had a lot of money and I now have very little and I would always choose the latter. In fact, I so regret the years that I tried to serve two masters because I now see how that kept me from walking more closely with my Father and from more fully serving him and those He loves.

The Rich Entering the Kingdom of God, Matthew 19:16-24

This week’s money and stewardship devotional from the Four Gospels* is about Jesus talking to a rich man about entering the kingdom of God, from Matthew 19:16-24.

16 Just then a man came up to Jesus and asked, “Teacher, what good thing must I do to get eternal life?” 17 “Why do you ask me about what is good?” Jesus replied. “There is only One who is good. If you want to enter life, keep the commandments.” 18 “Which ones?” he inquired. Jesus replied, “You shall not murder, you shall not commit adultery, you shall not steal, you shall not give false testimony, 19 honor your father and mother,  and love your neighbor as yourself.” 20 “All these I have kept,” the young man said. “What do I still lack?” 21 Jesus answered, “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.” 22 When the young man heard this, he went away sad, because he had great wealth. 23 Then Jesus said to his disciples, “Truly I tell you, it is hard for someone who is rich to enter the kingdom of heaven. 24 Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.”

Jesus talks a lot about the kingdom of heaven, but what is it? Is it the place we go when we die?  The kingdom described throughout scripture is the holy city that will descend upon the earth, after the earth and heavens have been recreated. Those saved by the blood of Christ will inhabit this city for eternity.

Just before this verse Jesus blessed some children who had come to him: “‘Truly I tell you, anyone who will not receive the kingdom of God like a little child will never enter it.’ 16 And he took the children in his arms, placed his hands on them and blessed them.” The rich man was in attendance when he watched this; his heart must have been pricked, and in his heart he yearned to be saved and to dwell in the eternal kingdom with God.

No one wants to go to hell and dwell in darkness forever, where all that is good is absent. Jesus was concerned about this man’s soul, and he wanted him to dwell with him forever in the kingdom. The man asked a straightforward question, and he got a straight answer. Jesus knew his heart, and he knew the rich man could not “serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” Matthew 6:24. The question the rich man asked was rather odd, don’t you think?  He asked Jesus what one thing must he do. The rich man wanted to know what one transaction he must do to seal him for eternity in the kingdom. This was a rather rude or maybe just an abrupt question to ask the man who holds the keys to heaven. He wanted a simple checklist to get him in, another transaction. It kind of cheapens the eternal deal. Thinking in modern day language, confronting Jesus, we might say “Hey, I am standing on the street watching you do amazing things–healing people and preaching wonderful messages. I’m a good guy. I’ve got a lot of resources. What one thing can I do to get in? I want to make sure I’m not missing anything on my holy behavior checklist. Send me an email Jesus, and I’ll make sure I’ll get’r done!”

“I’m living the good life here, treating people pretty well. I even go to church. I’ve got the 10 commandments memorized, and I’m not breaking any of them. I’ve got a lot of friends, nice home and car–thank you for blessing me with the American dream. Thank you Jesus; you and me, we are tight. I must be approved by you to have been blessed so abundantly. I just want to make sure that I’ve got the heaven ticket.”

Jesus knows that often more than anything, wealth stands in the way between heaven and hell. It could be we have a lot, or we yearn to be wealthy. However, when we follow Jesus, it may mean giving up careers, friends at the country club, and the image of success in society. It might not always mean that, but Jesus is trying to convict our hearts that maybe more than any one single thing, wealth (money and possessions) is the main other god in competition with him for our souls, and it has eternal significance.

Why settle? The material things we yearn for aren’t really that great at the end of the day. Why should we settle for cheap temporary things when we can have heaven for eternity?

*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 sixteenth post in this series.

How to Drop Expensive PMI from Mortgage


Private Mortgage Insurance (PMI) is expensive insurance that protects the lender, not you, if you foreclose, but you have to pay for it. It is required if you put less than 20% down when you purchase a new home unless you can prove that your total equity is equal to or exceeds 20% (22% FHA).

The insurance isn’t cheap. The borrower will have to pay .50% to 1.50% on the amount financed, but it is tax deductible if you make less than a certain amount. The premium will vary depending on the amount borrowed and the term; it also depends on whether the loan is FHA. So if you finance a $150,000 mortgage and your PMI costs 1%, then your monthly premium is $150 per month, or $1,800 per year.

If you rent for as long as possible and save to put down 20%, then you will not have to pay PMI, but even if you put less down, you don’t have to pay PMI forever. When you make mortgage payments, some of your payment goes to principal, and maybe your home will appreciate in value.

When your equity equals or tops 20%, then you can drop PMI. If you have a conventional mortgage, you need to get a certified appraisal. Go to BankRate to see the 9 steps to drop it. I understand that if the loan is FHA, the PMI automatically drops once you have 78% equity, but this only takes into consideration your loan terms and the payment you make, including extra amounts but not appreciation.

It is kind of a hassle to drop PMI, but the monthly savings are worth it.

October Unemployment Numbers Announced

Unemployment, New Jobs, and Jobless Claims Statistics:*

Negative: Unemployment INCREASED in October to 7.9% from 7.8% in September: September’s was the lowest rate since January 2009 and was good improvement over August’s 8.1%, so this shows things are really remaining about the same. However, keep in mind this ‘Official Unemployment’ rate only tracks those who are without jobs and have actively sought work within the past 4 weeks. Since this statistic does not track all people who are not working, some websites report that the ‘Real Unemployment’ rate is about 15% when all able-bodied people of working age are considered. For a historical perspective: The unemployment rate during the Great Recession peaked at 10.10% in October 2010. In 2012 it has varied in the range of 8.10% – 8.30%, so we are not seeing a lot of change this year. It could be worse when you consider that during the Great Depression it peaked at about 25% in 1933.

Positive: Monthly change in non-farm payrolls INCREASED: 171,000 new jobs were added in October, compared to 114,000 new jobs in September.

Positive: Initial Jobless Claims for Unemployment Insurance DECREASED: To 367,000 4 week rolling average, from 368,750. Looking back 12 weeks, the average was 364,500; 6 weeks ago it was 375,000, so we will need more weeks of decreases to reverse the year’s increasing trend. This number is much better than it was in 2009 when it peaked at over 650,000. In 2010 we saw a decrease from nearly 500,000 early in the year to the low 400,000′s. In 2011 the claims were in the low to mid 400,000′s, but since October of 2011 they have been below 400,000. The lowest we have seen this rate in 10 years is 282,000 in January of 2006, and the earlier part of the last decade we saw the average similar to what we are seeing now. During the Great Depression from 1929 – 1941 there was not the same level of unemployment insurance that we have today, although unions may have had some. It wasn’t until the Social Security act encouraged it in 1935. Today we have the Federal Unemployment Tax Act (FUTA) tax to fund state agencies.

*Unemployment statistics are an important indicator of how our economy is doing; more people employed points to stronger business growth and to fewer people receiving government entitlements. However, this is a little difficult to track, since the government doesn’t really publish a combined statistic that truly indicates what is happening. Most people who study this issue follow these three indicators: percentage of people unemployed, monthly change in non-farm payrolls, and jobless claims for unemployment insurance. The most discussed statistic is the unemployment rate; reading the explanation above illustrates how this number falls short.