Saturday, December 22, 2012

The Gift of Giving

Last year I attempted to examine the real reason for the "commercialization" of Christmas.  Today I am going to consider the act of giving and why such a thing makes us happy.

If you plumb the depths of any action or profession, you will always find a great paradox (or several of them) that seems to contradict or nearly negate the value of the thing done.  A simple example: Those who work in medicine know that despite all their efforts for health, the end for each patient is death.

This is not to say that healthcare therefore is useless or should be eliminated, but it does put the total operation in a different perspective. This type of thinking is philosophical, of course, something we have way too little of, which is why our society continues to suffer so deeply on very many fronts.

Well, the financial planning field is no different.  So much of our time is dedicated to saving and security and future goals and wealth....things that the client believes will make them happy (or, at least, feel better).  But each year Christmas comes and offers a corrective to that.  Instead of saving, the person wants to spend.  However, it is not the spending that is satisfying, but rather the satisfaction of another person's needs that brings joy to our hearts.

If anyone ever needed a contrary proof to the proposition that "wealth makes you happy" all he need do is witness one Christmas where someone will spend with reckless abandon in the hope of showing true love to another.  Further, it is not the thing purchased that brings the happiness, but rather the sheer joy of giving.

Why is this?  Perhaps the closest we can come to an answer is to see that in giving we come as close as we will ever be to Him that gave us everything.  I am sure there are other attributes that more closely resemble the divine, but giving, that out-pouring of oneself for another, has to rank up there.

Truly, giving (our ability of self-donation) is a gift itself and is one of the ways we reflect the One who created us.  "Give, and it shall be given to you." Luke 6:38.

Merry Christmas and God bless you!

Thursday, November 8, 2012

Silver Bullets, Silver Linings and Silver Savings

At the risk of being misconstrued, I will be short and to the point in this blog: There are no quick fixes to the problems plaguing our society, its government or our economic system.  Just as the sky did not fall in the morning after we re-elected the one who is arguably the worst president in American history, it is equally true that our country would not have seen a revival if we had elected the one who was arguably the worst nominee for that position.  The very idea that we should place that much hope and faith in a man is, well, blasphemous.  In short, there are no silver bullets to kill the hounds haunting our formerly fair land.

But there is a silver lining to this sad state of affairs and our realization of it.  If the problems are so big that not one of us alone could fix it, then it becomes perfectly clear that we must turn to the One who can fix it and then do our simple part in following His will. Fixing America starts with each one of us, our families and our communities.

I have built my financial planning strategies around one simple concept:  Helping to build productive, self-reliant and secure families through sound financial advice.  To me it is just applied common sense, but it does have to be "applied" and it can be tricky to maintain common sense in this increasingly complex world.  But one bit of common sense that perennially rings true to the people I counsel is that we ought always to invest some of our money in "hard assets."  I call them intrinsic worth items since the value, its worth, is IN the item rather than in a piece of paper or some other evidence of value (think of an account statement here).

Of course the most famous intrinsic worth items are gold and silver.  And it is wise to have a portion of your net worth in such things.  What to buy and how much can be debated, but one should never neglect adding to this important wealth preservation tool.

Recently I came across a simple and automated way to build up a personal, hard-currency reserve.  It is called Silver Saver and it allows you to buy silver or gold on a relatively low monthly (or weekly) allotment.  Further, you can take delivery of your metals when your account reaches certain minimums.  I recommend this since I think it is better to have physical possession of your intrinsic worth items rather than relying on being able to get them in more uncertain times.

The negatives of this program are that the premiums are a bit higher when you purchase small amounts (but you can buy larger ones and cut these down) and there are storage fees while the company houses your metal.  Still, for the ease of use and investment, I think Silver Saver is hard to beat.

Finally, and this will help offset some of the higher costs associated with this program, you can share in the profitability of Silver Saver if you share the site with others and they begin purchasing too.  And, yes, I am participating in this "profit from sharing" program, but that is not why I am recommending it.  Rather, I am hoping that all my friends and clients who have yet to take me up on investing in intrinsic worth items will finally begin doing so by taking me up on this easy and valuable program.  Check out Silver Saver by clicking on the hyperlinks above or by going here: https://silversaver.com/share/RYQZA/


Saving in Silver?

www.silversaver.com is an easy way to go!

Friday, October 26, 2012

Is Wealth A Blessing, A Curse Or A Sin?

     Recently a client (and good friend) posed a question to me after hearing a sermon preached on the gospel story of the rich, young man, where Christ tells this man to "go, sell what you have and come follow me."  One of my friend's questions was this: Am I not supposed to save, but instead give everything away?  To put it more generally, what is the nature of wealth and what should be our relation to it?  Is wealth a blessing, a curse or a sin?

     Now just to pose the question presupposes a religious answer.  And knowing that I am NOT a pastor, preacher or spiritual director, gives me great pause in attempting an answer.  So perhaps my first advice to you is to seek your answer from those sources.  Still, because I have been in the financial services industry for years and because I have pondered that same issue and what it means in regards to the work that I do, I will offer my musings on the topic.

      First, contrary to the purveyors of the "prosperity gospel", wealth is not a blessing in the sense that those who are wealthy are favored of God and those who are poor are not.  While it is certainly true that all that we have is a blessing (or gift) from God, this is not the same as to say that those who have more indicates a special relationship with God.  In fact, a better argument can be made for the exact opposite! "Blessed are the poor in spirit: for theirs is the kingdom of heaven." Matthew 5:3.

     No, the entire book of Job teaches us the fallacy of that idea and shows us that the Hebrews made that same fundamental error.  Job, who was wealthy, then poverty stricken (amongst other things) then wealthy again, remained faithful to God, bearing patiently the trials and tribulations of life, knowing that this life is simply a trial and pilgrimage to the next.  But it was his friends and fellow church-goers who showed up to indict Job, when his fortunes turned South.  "You must have done something wrong, sinned and offended God in some way for all this misfortune to have come to you," they said.  The Hebrews of old believed in what today we call the "prosperity gospel," but the book of Job should be our corrective to that.  It also, on the very first line of the first chapter, offers us the key to having a "special relationship with God": "Job...was simple and upright, fearing God, and avoiding evil." Job 1:1.

     Second, wealth can not be considered a curse either.  Job was a man of wealth and praised by God.  Joseph of Arimathea, clearly a friend of Christ, is said to have been wealthy.  History is replete with wealthy individuals making incredible, charitable gifts, establishing hospitals, schools and other works of mercy.  How could they even do this if not from their abundance, from their wealth?  This is not to say that someone of less means can not be charitable, but it is to establish that wealth, in and of itself, is not a curse or an evil and that great things can develop from it.

     Which brings us to our final query: So if wealth is not bad, why did Christ admonish the rich, young man to sell all that he had?  And the answer is quite simple really: Wealth can be bad, can be a temptation and the cause of our damnation IF we are more attached to it (a creature) than to our Creator and thereby refuse the inspirations of God.  

     In the story, the young man claims to have kept the commandments all his life, but still searched for more in the quest for salvation ("All these I have kept from my youth, what is yet wanting to me?" Matthew 19:20).  Christ understood this to mean that God was calling the young man to greater sanctity, in a word, that he had a vocation.  So Christ responded:  "If thou wilt be perfect, go sell what thou hast, and give to the poor, and thou shalt have treasure in heaven: and come follow me." Matthew 19:21.  [Emphasis added].  

     Christ gave the young man one of the evangelical counsels, poverty, because those are the requirements of "perfection" (as best as we can obtain it on this earth).  When "he went away sad: for he had great possessions," Christ knew that God did not have the first place in the young man's heart and said, "Amen, I say to you, that a rich man shall hardly enter into the kingdom of heaven."

     So wealth is not a measure of God's blessing, a curse or a sin (necessarily), but it can be, and often is, the most challenging of temptations to overcome.  "You can not serve God and mammon."  Matthew 6:24.  So let's make the virtues of detachment, liberality and charity regular parts of our financial plan.



Friday, August 17, 2012

Toward A Sound Economy

When most of us hear the word "economy" we think of the national economy...and somewhat despair as we daily witness the news of its perilous state. Things are bad to be sure, however, even on the national level, the fixes are EASY to start if we but had the will to do so. For example, consider this essay on Five Things the Prez Can Do To Save Our Country...then start demanding that he (or your governor...or your mayor.....) do so.

More importantly, though, we need to reclaim that word "economy" and recognize that it is NOT some large, nebulous, mystical thing largely outside of our control, but rather something intimately connected to us and within our power to change.

What is the meaning of the word "economy" after all? Simply put it is the thrifty, frugal and savings-oriented use of money and resources. "Economical" still connotes the essence of the word "economy." Only in a secondary sense does the word "economy" refer to the management of the resources of a community. In short, if you and I practice "home economics" (remember those courses!), then the state will have a sound "economy." Truly it is INDIVIDUAL PRODUCTION and SAVINGS that matter. And that is well within your control.

So many people I counsel today are "salaried with benefits personnel" of a company who live in mortal fear of being laid off due to a downturn in the "economy." At least partly the answer to their fear is for them to become entrepreneurial and economical. By becoming a producer of wealth and a good manager of resources, they will free themselves from the mistaken notion of their dependence on the national "economy" while simultaneously improving it.

Finally, lest I be mistaken, I am not advocating that everyone go out and start a business (necessarily...though that may come), but rather that you start something...anything...that brings real economy right into your back yard. It could be a hobby farm, a specialty service or maybe a lifestyle change, but the point is that you are in control, are only limited by your imagination and will be learning (and teaching) the values of a real economy: hard work, productivity and savings!

For my clients, I advocate having separate, business income as one of four parts to a sound financial plan. Why not go and start your business, back-yard garden, sideline service or helpful hobby today?

Wednesday, July 25, 2012

The Lucky Prophet...and Profiteering

There's a saying in the investment world that the perma-bears and perma-bulls, that is those who are always predicting a market decline or run-up, are bound to be right every now and then. I guess that's the investment world's variation of: Even a blind pig finds an acorn every now and then OR Even a broken clock is right twice a day.

Still, when someone "predicts" the latest market crash or bull run, we are all supposed to bow down to their infinite wisdom. Generally, I don't. Not because their predictions are not predicated on sound reasoning, but rather because the proximity of their prediction to the actually occurring event is happenstance. No one can predict the future with exactitude.

A logical and sound assessment such as "our current monetary policy will lead to hyper-inflation" is vastly different from the hyperbolic and unfounded statement "the fed will make your money worthless by 2014." And should the second statement come to fruition, it was merely a lucky guess.

Most people know this intuitively, but still fall prey to the sublime and manipulative marketing practices of the financial services industry. For example, I regularly see books for sale or courses promoted with language like: "By the man who successfully predicted the 2008 crash!" Really? Even IF you could show me the person who said the the Dow would lose 30% of its value in 2008, I would still maintain that the prediction had nothing to do with the timing of the event...that it was purely coincidence. (By the way, and proving the point a bit more, the crash actually began in October of 2007 and didn't complete until March of 2009. Where is the person who called that?) Remember, no one can predict the future with exactitude.

Even worse is the climate created by such assertions. I regularly have to remind clients that I can NOT foresee the future. Of course I believe my macro-economic calls of hyper-inflation, market devaluation and other economic woes, but I simply can not say WHEN that will occur. Can I venture a guess? Sure. Should you pack your bags based on that guess....well, you know the answer to that!

Rather we should put our energies to work on productive enterprises and activities where we do have some measure of control and determinable outcomes. By this I mean to discipline ourselves to save and to do so in a protective fashion. You can read how to do that here and here.

Finally, beware the charlatans who claim to have "predicted the crash of 'whenever'" and, for a minimal fee, will tell you how to avoid doomsday! They are liars and are trying to profit from your fear. By the way, why do they want your money if we are going to doomsday anyway?!?

I predict there will be an automobile crash tomorrow in Louisiana. Am I right? Probably 100% accuracy. However, I can not, nor can anyone else, tell you when or which intersection to avoid. But while I will never charge you a fee to advise you to buckle up and drive carefully, some people are not so scrupulous.


Tuesday, July 10, 2012

Breaking The Bank...And That's You!

In Nelson Nash's book, Becoming Your Own Banker, he mentions 4 "human problems" that would cause the system to fail. Now the "system" was how to grow one's wealth. So who would want that to fail?

Of course the answer is no one, but oddly, many people do indeed fail to increase their savings via personal "banking" because they either lack a true understanding of the nature of finance, disbelieve the "banking" message, refuse to follow the discipline required or fall back into old habits. Now I hate it when that happens, so I am dedicating this blog to addressing that issue.

A quick quiz: What is your greatest asset?

If you said, your house, your retirement account or some other investment, I give you half credit...but 50% is still a failing score!

If you said, your education, your business or your tools of the trade, I give you a C+. You are getting closer to the mark because you recognize PRODUCTION as a prerequisite for wealth and assets.

Now if you said that you and your work is your greatest asset, then move to the head of the class! Your work IS your asset. And the product of your work, usually represented in dollars and cents, is what everyone else is trying to take from you and what you should guard and use on your terms.

Much of modern finance is predicated on the simple idea that the common man (that's you and me) is too lazy and undisciplined to protect himself. That he would rather have discipline imposed on him even if it was detrimental to him and his wealth. Now whether that is a fact of nature or rather that we have been conditioned to be so is irrelevant. What matters is that too many people fit the description and are being enslaved and impoverished needlessly.

Establishing your personal "bank" is only half the problem. You must then, as Nelson Nash says, "use it or lose it." And when should you use it? WHENEVER you expend capital reserves on an item that you would normally finance.

If you do not understand that last sentence, then let me guide you through it with my advice. If you "disbelieve" and think that you don't have to "bank" to get ahead, then all I can suggest is to hit the books again or ask for a refresher course. If you "despise the discipline" that "banking" imposes upon you, then ask yourself how it profits you to have the discipline imposed on you from an outside source...who will gladly relieve you of your money. Finally, if you have a bad habit of making excuses or coming up with rationales that negate the value of "becoming your own bank," then simply accept the fact that you are torpedoing your own future.

Perhaps these are harsh words. But harsh problems require harsh medicine. And my sole goal and purpose is to help you protect your greatest asset and increase the rewards of your labors. Dangers abound that could break the "bank". Let's not let ourselves be one of them.

Tuesday, March 27, 2012

Bubble-Gum Face and Other Inflation Tragedies

So many of us have done it. Eight years old, half a mouth full of bubble gum and our friend challenges us to a bubble blowing contest: Biggest bubble wins. So there we go, blowing harder and bigger until that bubble is double the size of our head. But still not satisfied, we try that ONE MORE LUNG FULL of air and...POP...we're peeling gum off our face and out of our hair for the next few days!

That's what happens when bubbles over-inflate. But bubbles are not limited to chewing gum. In fact, talk of "bubbles" has reached almost common-place usage in the economic and financial world. And still, like our 8-year old self, we think maybe we can squeeze one more breath in there...

Today, I was reading a report from the good folks at Casey Research, a fine outfit for financial news from the proper perspective. The report was entitled "What Inflation Could Look Like In 2014" and it had some very interesting information. In particular, it made an historical survey of past "inflationary" episodes in our country and found that drastically higher prices usually followed a "benign inflation" within two years. Here are their findings in chart form;



Now the reason I put the word "inflation" in quotation marks above is because I know, as the Casey writer does, that higher prices are NOT inflation, but rather the symptom of an underlying cause. And what is that cause? In two words: monetary debasement.

Monetary debasement (true inflation) always occurs when new money is introduced into the economy without a concomitant increase in productive output. In simpler language, inflation is the increase in the money supply without any increase in goods or services. It is the DEVALUING of every existing dollar. This, necessarily, results in higher prices since it takes more of these lesser valued dollars to buy the same amount of product.

So here's the bad news: We (our country and its leaders) have already inflated wildly. Again, from the Casey report, "the US monetary base stands at $2.72 trillion, a 168% increase since October 2008." Did you catch that? 168% increase in currency in three and a half years! That bubble is mammoth and still we hear talk of "stimulating the economy", "quantitative easing" and "bailouts"...maybe we can blow one more lung full of air in there...??? Rising prices are not an "if", they are a "when". Of course, we have already seen significant increases, but I'm afraid that a four-fold increase in the inflation rate (or more) is very likely in our near-term future.

The good news is we can do something to protect ourselves. Our Casey reporter again has a very nice suggestion: "If 10% of your total investable assets (excluding equity in your primary residence) aren't held in various forms of gold and silver, we think your portfolio is at risk." I would second that motion, but add to it the recommendation I recently made to my clients: Up your "intrinsic worth items" to 15% and diversify in that category. In other words, take 15% of your total net worth and put it into tangible, real, useful assets, including gold and silver, and get learning how to use them.

And, of course, never forget to pray!



Monday, February 20, 2012

Effects of a Dishonest Money System

For this month's blog, I am going to use an excerpt from the book, Money! Questions and Answers by Fr. Charles Coughlin circa 1935.  Chapter VI of this book, Effects of a Dishonest Money System, offers 15 rather chilling prophecies when looked at with the benefit of 75+ years of hindsight.  And while Fr. Coughlin was eventually smeared with the epithet "anti-Semite", I have to wonder if this slander was meted out in retaliation for his exposure of the truth.

In any case if you read his predictions with an open mind, I believe the only conclusion you can draw is that he did approach the truth with amazing accuracy.  And while I have maintained for some time that we are "slaves" to nearly unknown masters, it is good to get confirmation (see predictions 12 and 14 below) from any source.

Finally, though I originally intended to make a running commentary throughout the excerpt, I have decided to let Fr. Coughin's words be read without interruption.  Suffice it to say at the beginning that the best financial plan that any of us can hope for is one that will MITIGATE the "effects of a dishonest money system" rather than eliminate them.  To eliminate them, an honest money system is needed.  Now isn't that a radical idea?!?


Effects of a Dishonest Money System
 What will happen if the present money system is continued and if the present policies endure?
 
  1. Private individuals will coin money for their own personal gain.
  2. Corporations organized for production, such as automobiles, steel and textiles, will be under the domination of the private money creators.
  3. The government itself will be dominated by the money plutocrats.
  4. The press, dependent upon advertising received from banker-dominated corporations and commercial houses, will continue to deceive people.
  5. The educational system will continue to ostracize the truths of economics from our schools.
  6. An un-informed citizenry, forced to work either on the mortgage-controlled farms or in the banker-controlled industries, will receive a less-than-living annual wage.
  7. Through the international manipulation of gold and money engineered by a small group of money creators living in each country, wars will continue to ensue.
  8. The only prosperity which will come as a breathing spell will be that [false] prosperity enjoyed as we prepare for war and fight the war.  [Bracketed comment added].
  9. The issue of non-productive bonds will continue to sap the profits of production through the process of taxation for the benefit of the creators of debt.
  10. Those who now condemn loudly the danger of inflation in order to save the present money system are those who are introducing a greater flood of inflation than was ever experienced by any nation in the world.
  11. The citizens, weighed down by the unbearable costs of war and depression, will be inclined to blame a democratic form of government and unwittingly relinquish the liberties already won for the bare necessities of life, which the plutocrats will allow them only at the sacrifice of liberty.
  12. Dictatorship, be it that of the communist, of the fascist or of the extreme socialist, will necessarily ensue.
  13. Christianity, which teaches the principles of social justice and upon which is founded the sovereignty of the Government’s right to coin and regulate the value of money, will be disavowed because Christianity will be blamed for putting war into the world instead of peace, poverty instead of prosperity and hatred instead of love. 
  14. The children of future generations shall be the scape-goats whom we are forcing to bear the sins of an unintelligent money system which, anticipating their birth, already has mortgaged their life’s income.
  15. Chaos in law, in government and in civilization eventually will result.
 Money! Questions and Answers, Fr. Charles Coughlin, Chapter VI, p. 143-144.