Investing should be easy; just buy low and sell high, right? But most of us have trouble following that simple piece of advice. Why is it so hard? It has to do with fear, greed and something called the “Investment Psychology Cycle.” As the market cycles upward, it draws investors in, but they may pay too high a price. When the market cycles downward, fear sets in and investors may sell, often at a loss. Want a real world example? Between September 1, 2008 and February 28, 2009 the stock market lost over 40 percent of its value.* The drop […]

A Roth IRA is an individual retirement account that offers a valuable future benefit: tax-free income in retirement. Although there is no up-front tax deduction for Roth IRA contributions as there is with a traditional IRA, Roth distributions are tax-free in retirement… when you follow the rules. Imagine saving the maximum into a Roth IRA of $5500/year ($458/month) from age 25 to age 60, successfully saving $192,500. Now imagine that the account was invested and earned an average of 8 percent annually… that account would have grown to $1,023,563. Wow, that is $831,063 more than you invested, and it is […]

In a recent North American survey by Allianz Life, more than 3 of 5 people between the ages of 44 and 75 said they worry more about running out of assets than about dying. Funding a 30 year retirement will take financial planning prowess as you juggle the effects of longevity, inflation, healthcare costs, taxes, market volatility, and regular living expenditures. Your retirement could last longer than you think. Since 1950, life expectancies have increased by more than 10 years (kclirary.lonestar.edu). According to estimates, if you are 65 and married, there is a 50 percent chance that either you or […]

With college costs increasing at twice the rate of inflation each year, most American families now intentionally view a college savings plan as a fiscal necessity, not an option. Today’s low cost four-year college will be $60,000 or more and a private school education will be $160,000. If you compound today’s price by the 8 percent amount that tuition has increased annually in the last 25 years, by 2023 your first grader will be paying $100,000 per year for education at a public institution (The College Board, Trends 2010). The future holds more for college graduates A college education is […]

Investing. This topic generates more discussion and controversy than virtually any other in the financial arena. Almost everyone wants to know how to make the most money with the least risk. But for believers, the question should not be where to invest, or how to invest, but why to invest. Should Christians speculate with money, or does God direct us to give our entire surplus to the needy? Which investments are compatible with Christian principles, and which are a compromise? Does speculation in the stock or commodities market constitute gambling? What is the scriptural justification for investing? When to invest […]

The home purchase decision is probably one of the most significant financial decisions a person will ever make. We must consider carefully if home ownership is within God’s timetable and will for us. We must face the following realities before making this decision. Owning a home may be the American dream, and is a privilege and a blessing, but is not always a prudent financial choice. Many young married couples have an expectation to be in their own home with new furniture and appliances within the first year of marriage, when it took their parents 10 to 20 years to […]

Whenever I have the opportunity to speak to groups or individuals on the subject of finance, I share two key scriptures of financial warning so that I can bring safeguards to those who will hear. These two scriptures call us not to be naïve, and to avoid financial mistakes that can cripple. The first scripture is: “A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences” (Proverbs 22:3). In the Middle Ages, before people would build a castle or a community, they would first build the moat or wall to protect them. In […]