Stewardship Lifestyle Seminar Workbook

TheStewardshipLifestyle

SeminarApplying God’s Word to Everyday Life

What’s a Christian Worldview?As Christian Financial Advisors we strive to use the Scriptures to help our families make smart and godly choices. This relates to their marriage, children, tax and estate planning and all areas of their financial lives.

What do we base our choices and decisions on? Many of us follow the examples or leadership of others. We are influenced by music, television, movies and friends. A recent nationwide survey completed by the Barna Research Group determined that only 9 percent of “born- again” believers in Americans had a “biblical” worldview.

Barna’s survey also connected an individual’s worldview with his or her moral beliefs and actions. Barna says, “Although most people own a Bible and know some of its content, our research found that most Americans have little idea how to integrate core biblical principles to form a unified and meaningful response to the challenges and opportunities of life.”

1. WHAT’S A WORLDVIEW?Whether conscious or subconscious, every person has some type of worldview. A personal worldview is a combination of all you believe to be true, and what you believe becomes the driving force behind every emotion, decision and action. Therefore, it affects your response to every area of life: from philosophy to science, theology and anthropology to economics, law, politics, art and social order — everything.

Someone with a biblical worldview believes his primary reason for existence is to love and serve God.

For example, let’s suppose you have bought the idea that beauty is in the eye of the beholder (secular relative truth) as opposed to beauty as defined by God’s purity and creativity (absolute truth). Then any art piece, no matter how vulgar or abstract, would be considered “art,” a creation of beauty.

2. WHAT’S A BIBLICAL WORLDVIEW?A biblical worldview is based on the infallible Word of God. When you believe the Bible is entirely true, then you allow it to be the foundation of everything you say and do.

Do you have a biblical worldview? Answer the following questions, based on claims found in the Bible and which George Barna used in his survey:

•Doabsolutemoraltruthsexist? •IsabsolutetruthdefinedbytheBible? •DidJesusChristliveasinlesslife? •IsGodtheall-powerfulandall-knowingCreatoroftheuniverse,anddoesHestillruleittoday? •IssalvationagiftfromGodthatcannotbeearned? •IsSatanreal? •DoesaChristianhavearesponsibilitytosharehisorherfaithinChristwithotherpeople? •IstheBibleaccurateinallofitsteachings?

Did you answer yes to these? Only 9 percent of “born- again” believers did. But what’s more important than your yes to these questions is whether your life shows it. Granted, we are all sinners and fall short, but most of our gut reactions will reflect what we deep-down, honest-to-goodness believe to be real and true.

(continued on inside back cover)

1http://www.barna.org/barna-update/article/5-barna-update/131-a-biblical-worldview-has-a-radical-effect-on-a-persons-life

When Jesus said, “Do not lay up for yourselves treasures on earth: (Matthew 6:19), the term “lay up” did not simply speak of having possessions, but of your possessions having you. “Lay up” could be better translated “hoard or stockpile.”

Jesus was not saying it was wrong to have things. He was warning against becoming materialistic – letting things become more important than God.

God created us to love people and use things, but a materialist loves things and uses people. There is nothing wrong with having possessions and a successful career. The apostle Paul wrote, “Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy” (1 Timothy 6:17). God can bless a person. In fact, we read in the Bible of those who had wealth, such as Abraham, Job, David, Joseph of Arimathea, Mary, and Barnabas.

Jesus did not extol poverty as some great virtue. In fact, only one time did He tell someone – the rich young ruler – to sell his possessions and give to the poor. I think it was because that man was possessed by his possessions. Because when Jesus said, “If you want to be perfect, go, sell what you have and give to the poor, and you will have treasure in heaven; and come, follow me” (Matthew 19:21), the Bible says that he went away sorrowful. It was a test to see weather God was more important to him than his things.

Money is not the root of all evil; the love of it is. The problem with wealth is not in having it. It is how we get it. It is how we guard it. And it is how we give it.

What will be your legacy? Will you be known as a wise and generous person or a worrier, a hoarder afraid of not having enough – thus trusting in your wealth? It’s so easy and natural to begin trusting in the resources you have accumulated over the years.

We need to be reminded to focus our love, time and attention on our God and Savior rather than our gold, silver, house, toys and trinkets. While we protect and value “our stuff” we understand it is God who is in control, not the political leaders, terrorists, governments, etc.

Life is choices; choices have consequences, make the right choice! Choose to make a difference.

The Truth About Wealth

The Apostle Paul told Pastor Timothy to “Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy”

1 TimoThy 6:17

The LIFE Financial Group, Inc. www.TheLifeGroup.org Serving the Christian Community Since 1978 1

Table of Contents What is a Christian or Biblical World View? .............................................. Inside Cover (front & back)

SundAy SChool“A Biblical Call to Proactive Parenting” ......................................................................................................5 Four Quarter Method of Stewardship ............................................................................................................8 The Surprise Package Company .................................................................................................................... 10

SundAy Morning WorShiP: Haggai 1 ..................................................................................................13 Priorities from a Biblical World View

SundAy AfTernoon WorkShoPCash-flow, Budgeting and debt elimination Creating a Spending Plan that Works ......................................................................................................... 16 Debt Elimination ..................................................................................................................................................19

SundAy eVening WorShiP: 1 Timothy 6 .............................................................................................. 21 A Biblical Call to Wise Stewardship

MondAy eVening WorkShoPfinancial, Tax and retirement Planning .................................................................................................. 24 Benefits of Starting Early (Help Your Grandchildren?) .............................................................................. 29 Key Strategies of Investing .............................................................................................................................. 33 Rationale for Owning Gold ............................................................................................................................. 35 Planning for that BIG Expense ....................................................................................................................... 37 Affording Retirement ........................................................................................................................................ 40 Sample Cash Flow Worksheet ....................................................................................................................... 43

Avoiding Costly and dangerous Mistakes in retirement (Optional Sr. Luncheon) ......................................................................................................................................... 44

TueSdAy eVening WorkShoPlegacy & estate Planning What Makes an Estate Plan “Christian?” ..................................................................................................... 46 Estate Planning with a Biblical World View ............................................................................................... 47

Personal review Meetings (Monday and Tuesday) ................................................................................. 56links to download Various formsSpeaker Bio ............................................................................................................................................................ 57

Copyright2012byTheLifeFinancialGroup,Inc.Allrightsreserved.

2 The LIFE Financial Group, Inc. www.TheLifeGroup.org Serving the Christian Community Since 1978

The Stewardship Lifestyle Seminar“To Worship and Glorify God through the Wise use of our Wealth”

DearFriends,

Didyouknowthatthereareover2000versesinscripturedealingspecificallywithfinancesandplanning?

Foroverthirtyyears,RoyRussellandhisteamofdedicated,ChristianfinancialprofessionalshavebeenputtingtousetheirtrainingandexperienceinthefinancialfieldtoassistfellowbelieversallovertheworldinaddressingtheneedforfaithfulBiblicalstewardshipintheirlives.AspartofaholisticBiblicalworldview,familyandfinancescometogetherasinstrumentsforgreatgoodinthehandsofbelieversastheyseektohonorGodinallthings.Amorethoroughunderstandingofourpersonalandfamilyfinances,includinginvestments,insurance,incometaxes,debtandestateplanningwillallowusasbelieverstobemorefaithfulstewardsofallthatGodhasentrustedtous.

Butitcannotstopwithanunderstandingofourfinancesalone.Wemuststudy,understand,andapplyGod’swordtoourwholelives,includingourfinances,eachandeveryday.TheStewardship Lifestyle Seminarisaninformation-andapplication-richprogramthatwillprovideindividualsandfamilieswiththeknowledgeandunderstandingofGod’swordandtheirpersonalfinancesthatwillmakeitpossibleforthemtobethegoodandfaithfulservantsJesuscallsustobe(Matt25:23).

AsRoyhasoftensaid,“instruction without application often leads to frustration.”ItisforthisreasonthattheStewardship Lifestyle SeminarprovidesnotonlyaBiblicalfoundationbutawidevarietyof practicalinformationandapplicationonallmannersoffinancialtopics,frombasicbudgetingtoestateplanning.AlocalChristianattorneywillbeavailableastheydiscusswillsandtrusts,andaCPAisalsoavailableforanytax-relatedquestions.

TheLifeFinancialGroupisafee-basedFinancialAdvisoryfirm,buttheywillwaivethenormal$350feeforpersonalreviewswhileatyourchurch.Ihopeyouwilltakeadvantageofthispersonalreviewsession– Royandhisteamwillprovideaspecificlistofissuesthatneedtobeaddressedtobetterplanforyour future.CometotheStewardship Lifestyle Seminarwithanopenheartandopenmind,andyou’ll beblessed!

Pastor Paul CaughillHigh Point Baptist ChapelGiegertown, PA

Key Elements •Layingafoundationofbiblicalprinciplesthatteachwisestewardshipasalifestyle

•ProvidingqualifiedfinancialandlegalprofessionaltoprovidetaxandfinancialcounselandpreparelegaldocumentsbasedonaBiblicalWorldView

•Offeringpersonalreviewsessionsforbelieverswhodesirehelpwithinvesting,estateplanning,householdbudgetingand/orgettingoutofdebt

Schedule SUNDAY •SundaySchool:ABiblicalCalltoProactiveParenting •MorningWorship:Priorities–ABiblicalWorldView-Haggai1 •Workshop - Budgeting and Debt •EveningWorship:ABiblicalCalltoWiseStewardship–1Timothy6

MONDAY •PersonalFinancialCheckups – from 9am to noon (60- to 90-minute sessions) •LunchFellowship(optional)–Senior’sGroup12pm to 1:30pm •PersonalFinancialCheckups – from 1:30pm to 4:30pm (60- to 90-minute sessions) •DinneratChurch–5:30pm to 6:30pm •Workshop - Financial Planning, Tax and Retirement Planning – 6:30pm to 8:30pm •PersonalFinancialCheckups – from 8:30pm to 9:30pm (60-minute sessions)

TUESDAY •PersonalFinancialCheckups– from 9am to noon (60- to 90- minute sessions) •LunchMeeting(optional)–LocalPastors’Fellowship–discussPastors’Taxes •PersonalFinancialCheckups – from 1:30pm to 4:30pm (60- to 90-minute sessions) •DinnerwithfamilyfromChurch(optional)–5:00pm to 6:30pm • Workshop – Legacy & Estate Planning(Wills,TrustsandProbate),BiblicalWorldView

– 7:00pm to 8:30pm


A Biblical Call to Proactive ParentingTOOLS TO TRAIn YOuR CHILDREn“PrincipleswithoutApplicationleadtofrustration”

“Train up a child in the way he should go; even when he is old he will not depart from it.” – Prov. 22:6

1. Who learns more - the Student or the Teacher? Why? A. Parents who incorrectly react to a need or a problem often cause conflict.

To be proactive you must plan •Teachyourchildrenandgrandchildren(Deuteronomy4:1-9;Ephesians6:4). •Actdifferentlythantheworldandthepeoplearoundyou(Romans12:2;Ephesians4:17). •Lookaheadandprepareforupcomingdangers(Proverbs22:3).

B. Examples of proactively training children •Balancingacheckbook–cantheymakedeposits?Writechecks?Balancetheaccount? •Securingtheirfirstjob–whatdotheyexpect?Whatwilltheyhear,seeanddo? •Buyingthefirstcar–whobuysit?Makespayments?Paysforinsuranceandupkeep? •Planningforcollege–isitoptional?Whattype?Whopays?Howdotheypay? •Weddingexpense–istherealimit? •Receivinggiftsoraninheritance–willitbemisusedormismanaged?Howmuch

is enough?

2. Three Ways our Children Learn (Seeing, Hearing, and Doing) •Weremember: – 10% of what we read – 20% of what we hear – 30% of what we see – 50% of what we both see and hear – 70% of what we say – 90% of what we both say and do

Active learning requires that we are involved in the learning; we need to see it, hear it, and do it to really get it!!

A. Your children learn by watching others – Seeing it (readingandwatchingothers) 1. They are influenced by peer pressure (Luke 12:15). a. The world’s philosophy from the god of this world? b. Biblical Priorities from the God of the universe? 2.Theyoftenmisunderstandthedeceitfulnessofwealth(Mark4:19). 3. They must understand credit card dangers (Revelation 3:14-20). a. Credit card use builds the “Me first” mentality-buy now, pay later...self sufficiency. b. A typical family has 10 cards with an average debt balance of $8,000. c. Credit card studies indicate that 34% more money is spent when “plastic” is used.

B. Your children learn by the priorities you establish – Hearing it – Listening or Auditory (preaching&training)

1. Are you keeping these lifestyle priorities in order? a. Your faith – salvation, sanctification, preventing stagnation b. Your family – spouse, children, parents, peers c. Your finances – give, save, spend, offerings and luxuries d. Your future – a Christian’s will


2. Are you keeping these financial priorities in order? a. Giving – local church, 10% of gross income b. Saving – minimum of 10% each month - More if single or an empty-nester •Threebiblicalreasonstosave(2Sam24:21-24;Prov.6:6-8,17:7,22:9) •Threestepsrequired: 1.Treatitasanabsolutenecessity–anewmindset(developaconviction) 2.Delegateresponsibility–payrolldeductionandautomaticbanktransfers(ACH) 3.Alwaysusetwoaccounts:short-termandlong-term c. Spending – paying bills, sticking to a budget •Thebudgetistheguidelineneverastraitjacket •Budgetbustersincludehome,auto,groceriesandpersonalallowances •Avoidborrowing(Proverbs22:6-7) d. Offering – Remembering the poor (above church tithe). •Beblessedandbeachannelofblessingand(Proverbs11:25) •DoinggoodtoothersispleasingtoGod(Hebrews13:16 •LookforopportunitiestoputGod’swealthbackintocirculation e. Enjoying luxuries – God’s bounty (1 Timothy 6:17)

Eatingout,travel,cableTV,cellphone,etc…

C. Your children learn through experience – Doing it – Kinesthetic (hands-on) 1. Four-Quarter Method - weekly, repetitive training reinforces priorities a. Weekly amount starting at age six. •Simplysharethehouseholdincome. •Trainthemtomanagemoney. •Donotdirectlyrelateittochores. b. Four quarters every Sunday morning •First quarter goes to Jesus. •Second quarter goes into a short-term piggy bank for upcoming opportunities. •Third quarter goes into a long-term piggy bank for college, marriage, etc. •Fourth quarter is discretionary – they can give it, save it, or spend it. •Amountincreaseswithageofthechild


TheFour-QuarterMethodisagreatwaytoteachchildrentogive,saveandstayoutofdebt.

c. Some helpful hints: •Matchtheirlong-termsavingsandinvestiteveryChristmasintoaninvestment

for the child. •Donotallowborrowing(noadvances!) •Neverallowthemtospenditall. •Noallowanceisneedediftheirearningsareover$25perweek.It’snot

an entitlement.

2. Surprise Package Company: lookforopportunitiestogive–inthechurchandinthe community.(Seepage9)

a. Thanksgiving opportunities. Go to www.TheSurprisePackageCompany.com •Helpyourchildrenlookforindividualsorfamilies,savedorunsaved,whohavea

financialneed.Therearemany! •Staple$100toapaperentitled“SurprisePackageCompany.”(Seepage10) •Haveyourchilddelivertheenvelopetothehousebyknockingonthedoorand

then hiding.

b. Benefits of practicing generosity •Godwillnothearyourprayersifyoucloseyourearstothecryofthepoor

(Proverbs 21:13). •Childrenbegintogiveoftheirownmoney. •Childrenbegintodiscernwhoshouldreceivegifts,whentheyshouldbegiven,

and how much should be given. •Childrenlearntobemorethankfulastheyseetheneedsofothers.

D. In conclusion, we need to establish a belief or a conviction to live by a standard. 1.Theshiftingsandsoftheworld’sphilosophyor 2. The rock solid, consistent teachings from God’s Word. a. We must adjust our view of life: Rom 12:1-2; Eph 4-5:12 b. Our old nature vs. the new nature once we have come to faith in Christ: 2 Cor 5:17

E. God’s judgment for doing nothing - Man’s natural tendency 1. Fig tree - Luke 13:6-9; Matt 21:18-19 2.TenVirgins:Matt25:1-13 3. Talents of silver - Matt 25:14-30 4. Helping the poor: Matt 25:34-36 5. Good Samaritan: Luke 10:30-34 6. Building on rock or sand: Matt 7:24-27 7. What direction are you headed?

How Are You Doing?These twelve suggestions may help you teach your children money habits for life. The developmental stage of each child will dictate how far you apply the topics presented.

1. Every week give each of your children some money to manage.2. Help your children set up a giving, saving and spending plan. Teach them to invest.3. Avoid paying children for regular household chores that are shared family responsibilities, such

as washing dishes, taking out the trash, cleaning floors, etc. Consider paying them for special jobs (e.g., cleaning the garage).

4. Set a good example by being truthful about money matters. Acknowledge mistakes.5. Be a good money manager, giving your children a good example to follow.6. Give your children more financial responsibilities as they get older.7. Help your children understand the difference between necessities and luxuries or needs

and wants.8.Praiseyourchildreniftheyhavemadewisedecisionswiththeirmoney.Beanencourager!9. Help your children find ways to earn extra money that are age appropriate and that suit their

abilities and skills.10. Allow your children to make mistakes and help them to understand the consequences. Do not

bail them out.11.Neverco-signaloan.Becomeapro-activeparentnotwaitingforaproblemtodevelop.12. Help your children look for the needs of others. They should see you giving. Learn to

be generous.


Training Up Our ChildrenPRACTICAL APPLICATIOnThe Four-Quarter Method of Stewardship

Being a wise biblical steward is a mindset that will affect your whole life. It needs to be demonstrated and modeled before our children copy the errors of the world and suffer the consequences. A simple and proven method that has worked in many homes is called “The Four Quarter Method of Stewardship.” It teaches the children:

•BiblicalPriorities •IndividualResponsibility

Starting at around age six, give a child 4 quarters every week as a teaching tool. This money is NOTforworkorchoresperformedaroundthehouse.ItisaSHARINGOFTHEHOUSEHOLDINCOMEwhichprovidestheopportunityforyoutoteachyourchildrenaboutmoneymanage-ment. If you pay the children for chores, keep that separate from what we are advocating here. The Four Quarter Method is a venue to teach, not pay for expected chores. Because they are part of the family unit they should have responsibilities every week.

Go out and buy two piggy banks or small lock boxes for each child. Mark one as “short-term savings” and the other as “long-term savings.” You need to keep your lessons simple to use and to understand, so always use quarters until the child is age 13 and then add dollar bills. Explain how the quarters are to be used.

Each Sunday morning when you give your children their weekly allotments, have them bring out their banks and make sure they understand how the money is to be divided up. This constant teaching tool will provide many opportunities to reinforce the underlying concepts of financial priority and responsibility. It also provides a simple method of accountability.

Each year as the children get older; increase the number of quarters and write their name on a 3x5 card with the suggested breakdown and tape it to the refrigerator. Hold them accountable because it takes time to develop a habit. It’s never too late to start. Remember, you never fail until you quit trying.

• The first quarter goes to the Lord. We’re not teaching a percentage of giving here; you are teaching the principle of priority!

• The second quartergoesintoshort-termsavings.Thisisforgifts,youthactivitiesorupcomingevents the child might participate in.

• The third quarter goes into long-term savings. This is for college, graduation and marriage expenses.Atyoungagesthechildrendon’tunderstandallthesethings,BUTWEARE TEACHINGTHEIDEAOFFINANCIALPRIORITY![Parents,learnanimportantpointhere not only for your children, but also for yourselves; never co-mingle short and long term savings.]

• The last quarter is for discretionary spending. Most young children cannot even say that word!Itisthismoneythattheycanspend,saveorgiveaway.Whatwearetryingtoestablishis the concept of sequential priorities with money.

This will take time; discipline and work, especially for parents with younger children, but the rewards can be great. Too many parents within the Christian community simply toss money at their children when financial needs arise. For example; your child has a field trip, a youth outing, and birthday party or even wants a specific item of clothing. The wallet or purse comes out, the money is given, and the child spends it all. WHATHASTHATTAUGHTTHEM? Instead, look for ways to teach your children God’s wisdom in order to be an effective disciple maker for Jesus Christ.


As the children get older, increase the amount they are responsible for, using the chart below. Once they’re old enough to earn their own money, this system will have them well on their way to financial wisdom.

Begin at ages 5-6 with four quarters;

Age 6 ......... $1.00 Age 9 ......... $4.00 Age 12 ........$7.00 Age 15 ......$15.00 Age 7 .........$2.00 Age 10 ....... $5.00 Age 13 ......$10.00 Age 16 ......$18.00 Age 8 ......... $3.00 Age 11 ....... $6.00 Age 14 ..... $12.00

Keep these SEVEN RULES

1) Always share the household income on Sunday morning. A portion goes to the Lord each Sunday

2) Save a portion every week into both short term and long-term savings banks. Weekly savings must become an absolute part of the training. We must teach our children to become systematic savers.

3) Don’t allow the children to borrow from their siblings or parents. Also, there are no advances. Older children have a tendency to spend all their discretionary money and then go to their younger siblings for a loan. Anticipate that and stop it before it happens. NOBORROWING!

4)Neverallowthechildrentospend100%oftheirshort-termsavings.Teachthemtoalwayskeep some cash reserves.

5)AfterChristmashelpthechildcountupthequartersintheirlong-termpiggybank.Ifit’smorethantherequiredminimumrewardthemandmatchwhattheysaved.Afterall, the scripture does teach reward for our faithfulness. Open up a mutual fund with that money and teach them about investing. Every year the long-term savings is added to their “college fund”.

6) When a child earns $25 in a week, they no longer need an allowance. It’s not an entitlement. 7) Lastly, teach your children there will never be co-signing for a bank or car loan of any kind.

Don’t wait till they turn 16 and want a car. Be proactive and train early.

Here’s what parents can learn from this!

•Tolearntogivegenerously;totheLord,toothersandtoyourchildrensotheycanlearnwhenthey are young

•Tosaveforshortterm,forplannedaswellasunexpectedexpenses •Tosaveforlongtermneedslikeacar,schooling,wedding,thehouse,abusiness

and retirement •Tokeepseparateaccountsforshortandlongtermneeds •Todoyourbesttoavoidcreditdebt •TobethankfulforGod’sblessingonwiseandcarefulstewardship •Touseeveryopportunitytoteachyourchildrenaboutwise

money management


The Word or the World?Are you building your life and your family on the rock of the Word, or on the shifting sands of the world’s philosophy?

Remember;ifyoudon’tinspectit,don’texpectit!

TRAInInG CHILDREn, PART 2

The Surprise Package Companywww.TheSurprisePackageCompany.com

Our human nature always puts ourselves first. Some call it self-preservation; God calls it selfishness,apartofoursinnature.Weoftenthinkaboutmy time, my car, my kids, my house, myjob–it’sallaboutme.Ourchildrenarenodifferent.Wehearthemsay,“…my teacher, my bike, myroom…”Lifeseemstorevolvearoundme; at least many of us like to think that way.

What does the Bible say about this concept? Is there anything wrong with it? Flesh out...

Generosity is being unselfish, not always focusing on me but on others. Philippians 2:4 reminds us that we should look not only to our own interests, but also to the interests of others. For many it is not natural to think about the needs of others. This is a learned habit, trait, and skill.

We read in 1Timothy 6:17-19 that Pastor Timothy was told to hold the people in his church accountable for the way they handled their money. He was to command his people to do good, to be rich in good deeds, and to be generous and willing to share. By doing this, they would lay up for themselves treasures in Heaven.

In these three verses we see three things: our attitude, activity and accomplishment.

The Attitude of our wealth - not arrogant, haughty or high-minded The Activity of our wealth - engage in good works, become rich in good works, be liberal or

ready to distribute and to partner up, being willing to share The Accomplishment of our wealth – preparing for the Bema Seat of Christ where we will be

judged for our stewardship and service

As parents, especially fathers, we have the responsibility and the wonderful opportunity to train up our children in God’s ways. While our children are still under our roofs, we need to be proactive rather than reactive, as Proverbs 22:3 reminds us. We have the opportunity to teach them discernment and discretion as they look for the needs of others.

In our household, every year around Thanksgiving we would make time to sit down with our four children and talk about what God expects from us. We would start with our attitude towards things. As a steward or manager we are responsible to take care of what we are entrusted with. For example: their bike, their clothes, their toys, and their room. We are made in the likeness of God and therefore must consider that God is a God of order not disorder. We should plan to take care of things and protect them. Secondly, we remind our children of their activity with wealth. Each of our children has received a weekly allowance from the time they were 6 years old. FormoreinformationonthistopicthatwecalltheFourQuarterMethodofStewardship,pleaserefertoTrainingChildrentobeGenerous-Part1.

Aftertheygivetotheirlocalchurch,saveforshort-termandlong-termneedsandopportunities,they should remember the poor. They need to actively be on the lookout for the needs of others in the community. Thirdly, we teach that wise stewardship is smart and they will be rewarded for their willingness to share and encourage others.

Wewouldoftenspeakwithourpastorandotherchurchpastorsinthecommunity,seekingtoreach out to individuals or families in need. A whole new world was opened up to my children.


In the past they never knew of the financial needs and struggles of families in the area. They were willingly blinded to the needs of others since they had so many of their own. Life happens and we are all busy. We could say, “I don’t have the time, money, or interest to focus on others when I have so many of my own problems and worries.”

Givingoutsidethechurchdoesnotcomenaturallybutmustbeaplannedevent.Toooftenweclose our ears to the cry of the poor and suffer the consequences (Proverbs 21:13). Giving to the poor is compared to lending to the Lord. We read in Proverbs 19:17, “Whoever is generous to the poor lends to the LORD, and he will repay him for his deed.”

As a family we then decide on four individuals or families we can bless. We look for genuine needs such as loss of a job, health problems, loss of a spouse, etc. We are careful not to enable the lazy or help the foolish. Ittakestimeandisnotalwayseasybuttherewardsarepriceless!

We staple a $100 bill to a page like the one shown above. The child takes it, folds it, and places it in an envelope. They write the person’s name on the front and prepare to deliver it.

As Christmas approaches we drive out to the families’ houses and each child sneaks up to a house to deliver the envelope while the rest of us are parked out of sight. Their goal is to slip it in the doorandringthedoorbellseveraltimesorknockhardandrun.Itisfunnotgettingcaught! They watch in secret to see the person open the envelope. They occasionally know the people who they are giving to, but are instructed never to tell anybody.

Each year as the parent, I must plan for the next Surprise Package Company and save money. We normally would give away $400 ($100 per child). This will be a sacrifice for many with young children but should become a priority.

As the children grow older they look forward to this event and want to give of their own money. We instruct them not to give all their short-term savings away and not to everybody they happen to see. This is where discernment and discretion come in. What a wonderfulteachingopportunity!Theyalsogrowmorethankfulfor what they have and no longer take things for granted. They learn contentment along with godliness which is great gain (1 Timothy 6:6).

NOTES:


From Your Friends at

FROM THE

Surprise Package Company

Enjoy a Blessed New Year!~Remembertoblessothersevenasyouareblessed~

“PRIORITIES FROM A BIBLICAL WORLD VIEW”

Misplaced PrioritiesHaggai1:1-14andLuke12:15–21Thegoal:embraceBiblicalpriorities,challenge&encourage each other.

1. Are Priorities Important to God? A. Diagnosing Misplaced Priorities (Haggai 1:1-4) 1. Lost focus and the Temple lay in ruins 2. Their focus was on themselves and their comforts 3. They were not rich towards God

B. The Consequences of Misplaced Priorities (Haggai 1:5-11) 1. Here we learn that when we edge out of God’s priorities, life stops working for us. 2. God says, “Consider your ways” – There is a cause-and-effect relationship between Israel’s

misplaced priorities and the problems that they’re experiencing in the book of Haggai. 3. Poor economy, crop failure, overall discontentment

C. The Solution to Misplaced Priorities (Haggai 1:12-15) 1. People began with reevaluation, with seeking God’s guidance on where their priorities

were out of line 2. They were distracted by the busyness of life and did not take time to honor God. 3. God resists the proud but gives grace to the humble – 2 Peter 3:15


Howshouldweprioritizethefinancialchoiceswemake?HereareseveralTimelessTruthswhenproperlyappliedwillrevolutionizeourlivesandalignourprioritieswithScripture.Thesearenotnewbuttheirapplicationsmaysurpriseyouaswereviewaprincipledguidelinefor handling100%ofGod’smoney.

2. Let’s Examine Five Timeless Truths A. God is a God of order, sequence, and priority. It’s the very nature and Character of God. 1.Seenincreationitself(Genesis1).InthebeginningGod…Hebringsorderout

of disorder. 2.DemonstratedintheNewTestamentchurch(1Corinthians14:40“Butallthingsshould

be done decently and in order.”). There is a plan. 3. Illustrated in the wisdom of Proverbs (Proverbs 24:27 “Prepare your work outside; get

everythingreadyforyourselfinthefield,andafterthatbuildyourhouse.”). 4. Are we orderly? Kitchen, garage, bedroom and basement? Finances?

B. God has deemed the family as the foundation stone of His plan for mankind. The family is key, and Satan wants to destroy it.

1. Instituted by God in the earliest moments of human history (Genesis 2). 2.ConfirmedthroughNewTestamenttruth-1Timothy5:8withoutaplanwehavedenied

the faith (the Word of God). 3. Established as the key to passing divine truths through the generations. Deuteronomy

6:4-9“…teachthemdiligently…talkofthemwhenyousitinyourhouse,andwhenyouwalk by the way, and when you lie down, and when you rise.”


Saving in order to protect your family must become a conviction, not a convenience. It cannot be “I’ll save if there is extra.” Rather, “I must set aside reserves before I pay my first bill.”

C. God wants our life choices to bring glory to Him. It’s all about our Testimony. 1.LivedoutthroughthelivesofNoahandthepatriarchs(Gen.6–Numbers). 2.CommandedthroughPaultoNewTestamentChristians(1Corinthians10:31“...doall

for the Glory of God” – Do you go into debt for the glory of God?). Average family carries over $7,000 in credit card debt.

3. Presented as the will of God for all believers (1 Peter 2:15 “For so is the will of God, that with well doing ye put to silence the ignorance of foolish men”

D. God wants His people to help those who are less fortunate. 1. Established in the third or charity tithe of the Mosaic system (Exodus – Deuteronomy).

Three tithes: Levitical, Festival and Charity. 2.ConfirmedinNewTestamenttruth(James2:15-17,1John3:17-18). 3. Manifested as God’s love in us (1 Corinthians 8-9).

E. God wants to bless His people who obey. 1. Illustrated in His nation’s provision (Deuteronomy 6-8 – Blessing & Curse). 2. Given by God for his children to richly enjoy (1 Timothy 6:17). 3. Promises to share His riches with His children throughout time (Rev. 21:7).

3. Application of Financial Priorities to the Christian Steward Overlay of Financial Application

A. GIVING – Returning to the Lord that which is His is the first financial priority and privilege.

1.“HonortheLord…withthefirstfruits”(Proverbs3:5-9). 2.“Everytithe…istheLord’s”(Leviticus27:30)–ItisholyuntotheLORD. 3.“…theygavethemselvesfirsttotheLord”(2Corinthians8:5). 4.“Giveanditwillbegivenuntoyou…”Luke6:38 5. Have you robbed God in tithes and offerings? Malachi 3:8-11

B. SAVING – Setting aside to protect one’s family is the second financial priority & privilege.

1. “Precious treasure and oil are in a wise man’s dwelling” (Proverbs 21:20). 2. “In the house of the righteous there is much treasure” (Proverbs 15:6). 3.“Ifanyonedoesnotprovidefor…hisownhousehold,hehathdeniedthefaith...”

(1 Timothy 5:8)

Tithingisn’ttheceilingofgiving;it’sthefloor.It’snotthefinishlineofgiving;it’sjustthestartingblocks.Tithescanbethetrainingwheelstolaunchusintothemind-set,skills,andhabitsofgracegiving.

Ironically,manypeoplecan’taffordtogivepreciselybecausethey’renotgiving. IfwepayourdebttoGodfirst,thenwewillincurHisblessingtohelpuspayourdebts to others.(Haggai1:9-11).

Givingisastepofobediencejustasbaptismisastepofobedience.


C. SPENDING – Being timely, honest, and just with creditors is the third financial priority and privilege.

1.“Paytoallwhatisowedtothem–taxes…revenue…”(Rom13:7a–giveeveryonewhatyou owe him).

2. “The wicked borrows but does not pay back” (Psalm 37:21). 3.PurposeofWork:“…sothatyoumaywalkproperlybeforeoutsidersandbedependenton

no one.” 4.(1Thessalonians4:12).It’saboutourtestimony!

D. OFFERINGS – Being mindful and generous toward the needs of others is the fourth priority and privilege.

1. “Only they would that we should remember the poor” (Galatians 2:10). 2.“Onthefirstdayoftheweek,eachofyouistoputsomethingasideandstoreitup…”

(1 Corinthians 16:2). 3.“…yourabundanceatthepresenttimeshouldsupplytheirneed,sothattheirabundance

may supply your need, that there may be fairness.” (2 Corinthians 8:14). 4.“Giveanditwillbegivenuntoyou…”(Luke6:38) 5. 2 Cor 9:6-11 Sow little reap little 6. Don’t be Stingy: God says, “Whoever closes his ear to the cry of the poor will himself call

out and not be answered.” (Proverbs 21:13). In Isaiah 58:6-10, God says that His willingness to answer our prayers is directly affected by whether we are caring for the hungry, needy, and oppressed. Want to empower your prayer life? Give.

7. What’s the Purpose of Prosperity? God prospers us not to raise our standard of living, but to raise our standard of giving.

E. LUXURIES – Rightfully enjoying God’s abundance is the fifth priority and privilege. 1. “The Lord blessed the latter days of Job more than his beginning.” (Job 42:12). 2.“…God,whorichlyprovidesuswitheverythingtoenjoy”(1Timothy6:17). 3. “What do you have that you did not receive?” (1 Corinthians 4:7)

ItisrequiredinStewardsthattheybefoundfaithful.(1Corinthians4:2)

Beingtimelywithcreditorsisvitallyimportant,butthewisestewardfirsthonorstheLordandprotectshisfamilywithsavings.Wemustchoosetoliveatalevelofconsumptionthatislowerthanourincome.

Aftermanagingwellthefirstthreeresponsibilities,financialfreedomnowallowsfreewill offerings.GodasksthatIconsiderthecircumstancesofothersbeforeIspendon personal pleasures. Arethereindividuals,missionefforts,orotherministryworksIshouldassist?

NowthatI’veconsideredmyobligationsandopportunitiestotheLord,myfamily,creditorsandothers,IamfreetoenjoythegreatblessingsGodhasrichlygiven.

ChoosingtoberichtowardGoddemonstrateswisestewardshipANDisatestimonyto theworld.

Creating a Spending Plan that Works

ItisrequiredinStewardsthattheybefoundfaithful–1Cor4:2

I. PRINCIPLES TO UNDERSTAND – Proverbs 27:23-27 A. Your purpose on earth is to glorify God (Matthew 5:16). B. A Wise man builds his house upon the rocks (Matthew 7:24-27). C. God rewards those who diligently seek Him (Hebrews 11:6). D. Everything you have belongs to God (Exodus 9:29; Psalm 24:1; 1 Corinthians 10:26). E. God is your provider (Deuteronomy 8:18). F. You must honor God with everything He has entrusted to your care (Proverbs 3:9-10). G. The husband is to bear the emotional burden for the family’s finances (1 Timothy 5:8) H. You are accountable for your stewardship (1 Corinthians 4:2; Romans 14:12). I. Tithes, offerings, and giving are the will of God (2 Corinthians 8:5). J. Financial success comes through hard work (Proverbs 10:4; 22:29).

II. THE BUDGET WORKSHEET A. Record your income 1. List gross income for both spouses from your jobs. 2. Subtract all deductions to arrive at your net spendable take-home pay. 3. List all other forms of income: social security, investment, pension, rents, etc. B. Prioritize your spending. See Priorities from a Biblical Worldview (pg. 12-14) notice that

these are sequential priorities. Giving comes first than savings than spending and so forth. 1. Give – this is our 1st priority and privilege a. Start at 10% of your income to your local church b. Any giving above 10% or any ministries other than your church falls into the

offerings category. 2. Save – our family is the 2nd priority (Goal: 10% of income) a. Emergency Fund: If you have debt, save $1,000 and proceed with debt snowball

(see Debt Elimination, pg. 18). If you are already debt-free, start by setting aside 3-6 months living expenses.

b. Short Term: These are funds that you expect to need over the next 12 months (taxes, insurance payments, vacation, Christmas and birthdays, etc.). Add the value of all these bills and then divide by 12. Set up an automatic savings plan to put that amount into savings monthly until needed.

c. Long Term: This is for large expenses like education, marriage, automobile, retirement, etc. If your company offers a matching 401k, take full advantage of the match. Above that, consider saving in your IRA or Roth IRA. You may want to contact The Life Group or another advisor to discuss your options.

3. Spend – on living expenses or needs a. Housing: you should not spend more than 25% of your take-home pay on mortgage

or rent


DOIREALLYNEEDABUDGET?“Budget”isoftentreatedlikeafour-letterword.However abudgetissimplyaspendingplan–atooltohelpyoumakethebestpossibleuseofyour resources.Budgetingisnotnecessarilyaboutgettingoutofdebt,butitisaboutwise stewardship,andthisappliestoeveryone,fromtheJanitortotheCEO. Budgeting=Planning=Wisdom.

b. Groceries: consider paying for groceries in cash. This may prevent overspending. Also, plan out a weekly meal plan and then shop to fill the plan not the pantry.

c. Insurance: consider paying your insurance premiums annually if possible. Many insurance companies charge less for this.

d. Personal Allowance: to avoid overspending on things like coffee or buying lunch at work, give yourself a weekly or monthly allowance (i.e. $10 or $15 a week).

e. Debt Payments: If you have debt (other than your primary mortgage) we recommend that you follow the debt snowball (see Debt Elimination, pg. 18)

4. Offerings for the needs of others – come before luxuries. a. Giving to your local church beyond 10%, Faith

Promise Missions b. Those in your community that are in financial need.

(See The Surprise Package Company, p. 9 ) 5. Luxuries - Enjoy the fruits of your labor (eating out,

vacations,hobbies,CableTV,etc.)

III. BUDGETING TIPS A. Visualize your cash flow.Understandthatpeaksandvalleys

will happen. This helps you see the need to set aside funds for those difficult times.

B. Use a saving method. 1. Envelope system 2. Money market-automatic bank transfers. This is usually the best option. C. Budgeting tools that help you. 1. Quicken, other computer programs (Excel), etc. 2. www.Mint.com – free online budgeting and cash flow monitor 3. Our Spending Plan Worksheet – see page 36 D. Record your actual expenses as you pay your bills (tracking). This will provide the

information you need to make next year’s budget E. Stick with it! This is the only way to measure your

money and avoid future debt. Biblical Stewardship is a lifestyle that displays wisdom in your choices.

F. Establish Accountability – If married, work together with your spouse. If single, find an accountability partner.

IV. WHAT IF IT DOESN’T WORK? A. Try to determine God’s reasons: Do I really need it or

Is He testing my faith? Did I misspend the funds He provided?

1. Have I violated the financial principles found in God’s Word? Give and be financially blessed ........................................................................... Proverbs 11:24 Scorning correction (Pride brings poverty) .......................................................Proverbs 13:18 Planning leads to profit, haste to poverty .............................................................Proverbs 21:5 Stinginess – Listen to the cry of the poor ...........................................................Proverbs 21:13 Get-rich-quick schemes ....................................................................................... Proverbs 28:19


national household Spending Averages

Source: Statistical Abstract of the United States: 2012. Table 677

Percent Category of Spending

Food 13.9%

Clothing 4.2%

Housing 23.3%

Personal 11.4%

Medical 19.7%

Transportation 8.9%

Other 18.6%

Total: 100.0%


2. Does God have a deaf ear to your request? Idols of the heart (money or possessions) ..................................................................... Ezk 14:3 Living in sin or disobey the law ................................................................... Proverbs 5:29; 28:9 Sin hinders prayer ............................................................................................................. Isa 59:1; Unforgivingspirit-Selfishness...............................................................Mark 11:25; James 4:3 With faith not double-minded ..................................................................................James 1:5-8 Good relationship with spouse ...................................................................................1 Peter 3:7 Dishonoring Parents ....................................................................................Ex. 20:12; Eph 6:1-3 B. Do you rely on God’s will or MasterCard - Prayer or Plastic? “You do not have, because

you do not ask. You ask and do not receive, because you ask wrongly, to spend it on your passions.” James 4:3

C. A relationship requires two-way communication. Be patient; God does answer prayer. Remember, the answer can be yes, no or wait.

NOTES:

Therichrulesoverthepoor,andtheborroweristheslaveofthelender.Proverbs22:7

Helpful Resources

• Our Website: www.TheLifeGroup.org• TheTotalMoneyMakeover:AProvenPlanforFinancialFitness by Dave Ramsey. www.DaveRamsey.com

• 48DaystotheWorkYouLove by Dan Miller. www.48days.com• FinancialParenting:ShowingyourKidsthatMoneyMatters by Larry Burkett.

www.Crown.org• Money,PossessionsandEternityandTheTreasurePrinciple by Randy Alcorn.

www.epm.org• Others. www.mint.com

Debt Elimination: Free to Serve

I. DEBT ELIMINATION STARTS IN THE HEART! A. Acknowledge your sin of poor stewardship, if necessary.

“If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.” (1 John 1:9).

B. Acknowledge your need of help. “God is our refuge and strength, a very present help in trouble.” (Psa 46:1). “Let us then with confidence draw near to the throne of grace, that we may receive mercy and find grace to help in time of need.” (Heb 4:16).

C. Make a commitment to the Lord to be a godly steward. “I appeal to you therefore, brothers, by the mercies of God, to present your bodies as a living sacrifice, holy and acceptable to God, which is your spiritual worship.” (Rom 12:1)

II. DEBT ELIMINATION REQUIRES CHANGE! A. Determine where you are financially. 1. List all of your debts. 2. Inventory your assets. 3. Complete a household budget. a. Identify your income sources and amounts. b. Identify your financial obligations. B. Stop going into debt. Stop the financial bleeding!

When you’re in a hole, know when to stop digging! C. Start using a disciplined spending system: 1. Envelopes 2. Savings Account for annual bills (taxes, insurance,

vacation, Christmas, exc.) a. Add up all these expenses, divide by 12 and

set that amount aside monthly. b. Withdraw from account when bill comes in to avoid debt. 3. Electronic Tracking (Quicken or Mint.com)

D. Establish accountability. 1. If married, start with your spouse 2. Close friend or pastor who you can confide in 3. Christian Financial Advisor E. Develop a repayment plan. 1. Reduce your expenses. a. Most debt problems are a result of overspending, rather than lack of income b.Eliminateluxuriesandexcessspending(i.e.cableTV,eatingout,impulsespending,

andcoffeeonthewaytowork…) c. Sell unnecessary assets (EBay, Craigslist, yard sale)

Debt is a worldwide epidemic. In order to protect our families from it, we must change the way we treat money. It all starts with an acknowledgement that God owns all things and that the way we handle money reveals who or what we worship.

-TimRussell

Thewickedborrowsbutdoesnotpayback,buttherighteousisgenerousandgivesPsalms37:21

Mostdebtproblemsarearesultofoverspending,ratherthanlackofincome.


2. Increase your cash flow. a. Sell unneeded stuff b. You may need extra work temporarily. c. Increase exemptions to reduce tax refunds. 3. Work your “Debt Snowball.” a. Live on a strict budget b. Build up a Starter Emergency Fund ($1,000) c. List debts from smallest to largest total balance, excluding your mortgage. d. Start by paying as much as you can on your smallest debt and make minimum

monthly payments on the others. e.Afteryoursmallestdebtispaidoff,rollthatpaymentovertothenextsmallestand

repeat until you’re debt free. f. When you have to dip into your Emergency Fund (EF) stop the debt snow ball

(pay minimums on all balances) and refill EF back to $1,000. g. See Dave Ramsey’s The Total Money Makeover for more details.

NOTES:

name interest rate Balance Minimum Payment new Payment

1 Sears 16% $450 $50 $50 + $200 = $250

2 MasterCard 18% $650 $30 $30 + $250 = $280

3 Parents 0% $1,600 $200 $200 + $280 = $480

4 Visa 23% $1,800 $30 $30 + $480 = $510

5 Car 10% $7,000 $400 $400 + $510 = $910

6 School Loan 6% $9,000 $200 $200 + $910 = $1,110

extra Paid on debt: $200



A Biblical Call to Wise Stewardship1Timothy6

The goal: Doing the Will of God as it relates to our Finances

Your personal stewardship affects more than your immediate family.Does your pastor have any business speaking to you about your private financial matters?

Who wrote 1st Timothy? To whom was it written?It was Timothy’s God given responsibility as a pastor to minister the Word of God to those who had wealth regarding the exercise of personal stewardship.

1. WHAT IS STEWARDSHIP? A. A Manager or Overseer of someone else’s estate •Joseph–Gen39:4;43:19 •Pastors–Acts20:28 B. The care for and use of all entrusted to us C. We are Managers of God’s Estate: Psalms 24:1 i. Must be Faithful – 1 Cor 4:1-2 ii. Must be Accountable – Rom 14:11-12

2. WHY HEAR A MESSAGE ON STEWARDSHIP? A. Lack of teaching – Acts 20:27, 1 Tim 6:17

It’softenlimitedtojusttithingorfundraising.Stewardshipisnotsimplytithing B. Most Financial Advisors teach how to build and protect wealth and pass it on to your

children,oftentotheirharm.FewprovideguidanceorwisdomfromScripture.Psalm1:1

C. Our nature – selfish and impulsive – Mark 4:19 Indebtedness can make you a slave to an unwanted master - Proverbs 22:7

D. Families are destroyed from mismanagement – over 90% of marital problems are related to finances.

E. Families can be torn apart over estate disputes - We will be held accountable for our choices

3. HOW SHOULD YOU FUNCTION AS A STEWARD? A. What does money do to your Attitude?

1 Timothy 6:17 Asfortherichinthispresentage,chargethemnottobehaughty,norto settheirhopesontheuncertaintyofrichest,butonGod,whorichlyprovidesuswith everythingtoenjoy.

1Timothy6:17-1917Asfortherichinthispresentage,chargethemnottobehaughty,nortosettheirhopesontheuncertaintyofrichest,butonGod,whorichlyprovidesuswitheverythingtoenjoy.18Theyaretodogood,toberichingoodworks,tobegenerousandreadytoshare,19thusstoringup treasureforthemselvesasagoodfoundationforthefuture,sothattheymaytakeholdofthatwhichistrulylife.

Eventhoughthecongregationmaybeintimidating,thepastoriscommandedtoteachthe biblicalresponsibilityofstewardshipandexhorthiscongregationtopracticeitwitheternity inview.

Alotoffolksarerelievedandthinking,“Notme,I’mnotrich”Canyouanswerthe question; how do you define wealth?

It looks like we are all back in the ball game!

1. Do not be high-minded or arrogant. Don’t have a high esteem of self. Are you part of the upper middle class?

2. Do not trust in uncertain riches. Do not let wealth be your source of dependence or confidence. Did you pray today, “Lord, give us today our daily bread.”? NO, why? Because it was already in the refrigerator or cupboard.

3. Do keep your trust in the living God. God gives us richly all things to enjoy, so trust Him. B. The right Activity with your wealth

1 Tim 6:18 Theyaretodogood,toberichingoodworks,tobegenerousandreadytoshare 1. Work good deeds. Engage in the work, get involved 2. Become rich in good works – it’s a learned behavior. 3. Be ready to distribute to others a. Proverbs 11:25 Whoever brings blessing will be enriched, and one who waters will

himself be watered. b. Proverbs 11:24 One gives freely, yet grows all the richer; another withholds what he

should give, and only suffers want. c. Proverbs 19:17 Whoever is generous to the poor lends to the LORD, and He will repay

him for his deed. 4. Be willing to share (from koinonikos, meaning to partner or fellowship). 5. Consider Christian School or Camping ministry – They both are labor-intensive but not

revenue-intensive. The Christian workers are grossly overworked, under-paid and quickly burned out. We then find another group of dedicated believers and put them through the same meat grinder.

C. What will stewardship Accomplish? 1 Tim 6:19 thusstoringuptreasureforthemselvesasagoodfoundationforthefuture,sothat they may take hold of that which is truly life. Also seen in 1 Tim 6:12

1. Lay-up treasure in store for yourself - Matt 6:19-20 Self-serving? 2.John17:3Seizethetruthofyoursalvation,layholdtothistruth! 3. Matt 6:21 Your heart follows your money – Focus should be on the future, your future in

Heaven with your God. 4. “The time to come” is also called the Bema Seat or Judgment Seat of Christ where we will

be judged for our Stewardship and Service. This is not the Great White Throne Judgment where the unsaved are condemned.

4. WHY IS STEWARDSHIP SO IMPORTANT? A. On a Personal Level 1.Itaffectseveryoneinthechurch-1Corinthians12:12“…thebodyisoneandhas

manymembers…” 2. You will give an account – 1 Corinthians 4:2, Romans 14:12 3. How you leave your estate is as important as how you managed it while you were living.

This is your final act of stewardship.


DefiningWealthonaGlobalScaleResearchfindsthatassetsofjust$2,200peradultplacedthehouseholdinthetophalfoftheworld’swealthiest.Tobeamongtherichest10%ofadultsintheworldjust$61,000inassetsisneeded.Ifyouhavemorethan$500,000you’repartoftherichest1%,theUnitedNationsStudyhasfound.

(Source:DowJonesFinancialAdvisorServiceJanuary2007)

4. May disqualify you from service – Titus 1:7, 1 Tim 3:1-7 Impacts your personal testimony – Mat 5:16 “Let your light shine before others, so that theymaysee…andgiveglorytoyourFatherwhoisinheaven”

5. Stewardship is an area in which you can witness and recognize the work of God in your life – 2 Cor 8:7 Paul says that we should abound in giving.

6. Stewardship impacts your personal testimony and your ability to reach family, friends, neighbors and co-workers with the Gospel – 1 Cor 4:1-2; Matt 5:16

B. On a Corporate Level – Your stewardship affects many areas of local church ministry. 1.Pastoralcompensation–1Timothy5:17.Achurchreapswhatitsows!

Are you using Bible principles to pay your pastor? Consider the double honor principle found in Scripture where he’s either paid twice the average salary or very good salary with much respect.

2. Property management – Proverbs 3:9 3. Missions support, the needy, fulfilling the Great Commission 4. Keep priorities in order: Build and strengthen the church before you increase

missions giving. 5.Educationalmaterialsandvenues(Camp,VBS,etc.)–Whatdoestheworldsee?

Stewardship is not an Option - Will you hear Christ say, “Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.” Do our financial choices display wisdom? Do our priorities demonstrate that? Life is choices, choices have consequences, and we must make the right choice.

How can you put God’s Wealth back into circulation? Look for an excuse to bless others. Have you thought about providing a Challenge Grant or Anonymous Matching Gift? Examples include: Student scholarships, mission trip, church need, etc.

NOTES:


Financial, Tax, and Retirement PlanningI. Financial Success comes from obeying Scripture and applying priorities to our choices.

Lifeischoices;choiceshaveconsequences;maketherightchoice!Financial Freedom is a choice, not a dream. Anyone can be financially free. You choose how your life is going to look andyou’reresponsibleformakingithappen.Nooneisgoingtodoitforyou.Financialfreedomis not only your choice, it is your responsibility.

A. As God’s Money Manager, my Financial Responsibilities are:

1. First to the Lord 2. Second to my family 3. Third to my creditors 4. Fourth to others or to God’s

work (Sacrificial giving) 5.FifthtorejoiceinGod’s

rich blessings B. Remember the Priorities of God

and then Family 1. Both Testaments urge wisdom (Prov21:5,22:3James3:13) 2. Both Testaments urge family protection (1Tim5:8,Prov21:20)II. Short-Term Saving A. Short-term savings is always a priority over Long-term investing B. Remember – Ifyoudon’tearninterest,youwillpayinterest! C. Short-Term, “liquid” Cash Savings for emergencies and opportunities 1. Saving short-term is wise – 10% of your monthly income is a good place to start 2. Find the bank that offers the best interest rate on savings accounts a. What kind of interest are you getting from your local bank? b. “Internetbanks”oftenhavebetterrates–

check http://www.money-rates.com/savings.htm 3. Remember Proverbs 21:20 TheWisenottheRichhavesavings! 4. Build and maintain a cushion for opportunities and emergences. Set a goal of several

thousand dollars (3 to 6 months’ earnings is wise) D. Let’s look at some real life facts:

The Personal Savings Rate has been in an overall declining trend for several decades. •50%ofAmericanshavelessthanonemonthofsavingssavedforemergencies •61%arelivingpaycheck-to-paycheckIII. Long-Term Saving and Investing A. Six Rules for Investing 1. Invest conservatively, within different asset classes. 2. Look for a ten-year track record of the fund manager (not the fund). 3. Reduce or avoid investing in “sin stocks.” 4. Keep it simple! 5. Minimize or avoid surrender & redemption fees. 6.Useindependent,third-partyresearchlikeMorningStarPublications.


Providingforyourfamilyandavoidingdebt is wise! ITim5:8–familyprovisioniscommanded Pr13:11–hewhogathersmoneylittlebylittle... Pr.21:20–thewisehavereserves... Pr.22:3–theprudentlookahead... Pr.21:5–planningresultsinplenty... Pr.22:7–borrowerisinbondage...

NOTE:Investingisnotlikegambling.Wetypicallyinvestwithourheadusinglogicorreasonbutoftenselloutoffearoremotion.Likefarmingittakestimeandpatiencetoreapanythingofvalue.LotteryticketsandCasinosaregamblingandnotwise.

B. Where is wisdom? 1. From our experience with families just 26% of adults surveyed think they could

accumulate $200,000 in net wealth in their lifetime.

2. 21% said a lottery win would be the most practical strategy for accumulating several hundred thousand dollars.

3. But if you save $200 monthly from age 30 to 65 and earn an average of 9% per year you will have over $500,000.

C. Where can we find $200? 1. Reduce: Eating out – once per month or per

quarter 2. Buying lunches and snacks 3. Buying coffee, soda and bottled water 4.OverallConsumption! 5. Avoiding tax-refunds 6. Extra work = extra income

D. Most Common Investment Terms: 1. Stocks: Ownershipinapubliccompanybypurchasingcommonsharesofthecompany.

Aroundlotofstockisusually100shares. For proper diversification you need to purchase a variety of stocks in different sectors and asset classes of the market. Generally you should start with $50,000 to build a portfolio.


Questions for you to answer...

What are your rules for investing?

How do you display wisdom?

How will you find $200 each and every month?

Personal Saving rate (PSAVerT)Source: u.S. Department of Commerce: Bureau of Economic Analysis

Shaded areas indicate u.S. recessions.2012 research.stlouisfed.org

15.0

12.5

10.0

7.5

5.0

2.5

0.01950 1960 1970 1980 1990 2000 2010 2020

(Per

cent

)

Stocks - Ownership Bonds - Debt Mutual Fund - Container REIT - Real Estate

2. Bonds: Bondsarethedebtofagovernmententityoracorporation.Abondissimply evidenceofadebtandrepresentsalong-termIOU.USSavingsbondsarethemost common.Buyat50%discounttofacevalue.BondsissuedafterJune2003reachfacevalue in 20 years. These newer bonds are paying very low interest and usually not recommended. Older bonds are generally paying a slightly higher rate of interest but theystopearninginterestafter30years. Other types of Government Issued Bonds include T-Bills, Notes,andI-Bonds. Bonds are also issued by Municipalities and Corporations to fund specific projects. i.e. Sewer Authority Bond, Hospital Bond, Community Development Bond, etc. All types of bonds have a maturity date (when the principal must be repaid) a stated interest rate (also known as a couponor“couponrate”),howoftentheinterestwillbe paid and the term of the loan. It is important to understand that the relationship between bond prices and bond interest rates is an inverse relationship; when interest rates rise, bond prices generally fall and vice versa. If a bond is sold prior to its maturity date, you may receive less that the principal amount. If a bond is held to maturity then you will receive all interest payments plus your original investment, barring default by the issuer.

3. Mutual Funds: An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus. One of the big advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. The value of mutual fund shares is determineddaily(alsoknownasNAV,Netassetvalue).


I-Bonds

I-Bondsareaformofinflation-protecteddebt,availablewithtworates:afixedratesetwhenthebondispurchased,andanotherrate,adjustedforinflationeveryMayandNovember.Benefits: •Exemptfromstateandlocaltaxes •Canbeheldforupto30years,butcanalsoberedeemedinfullafterjust12monthsDrawbacks: •Onlyupto$10,000canbeinvestedinI-Bondseachyear •Typicallyoffersrelativelylowreturnoninvestment

Most mutual fund shares can be purchased or redeemed as needed, but the price will fluctuate with market conditions; shares, when redeemed, may be worth more or less than their original cost.

a. Some can be set up with $50 monthly but others require $1,000 or more. b. Consult the Prospectus (legal disclosures) before investing in any mutual fund c.MutualFundsandMoneyMarketFundsaresoldbyaprospectus.Aninvestmentina

moneymarketfundisnotinsuredorguaranteedbytheFederalDepositInsurance Corporationoranyothergovernmentagency.Althoughamoneymarketfundseeksto preservethevalueofyourinvestmentat$1.00pershare,itispossibletolosemoneymyinvestinginthefund.

d.Aninvestorshouldcarefullyconsidertheinvestmentobjectives,risks,chargesandexpensesofamutualfund.Thisandotherimportantinformationiscontainedintheprospectuswhichcanbeobtainedfromthemutualfundoryourfinancialadvisor.Theprospectusshouldbereadandcarefullyconsideredbeforeinvesting.

4. REIT “Real Estate Investment Trust”: AREITisacompanythatowns,andin manycases,operatesincome-producing realestate.TobeaREIT,acompany mustdistributeatleast90percentofits taxableincometoshareholdersannually intheformofdividends.REITsreceive specialtaxconsiderationsandallow individualstheabilitytoinvestin large-scalecommercialpropertiesand receiveadividendincomeflow.

a. Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties’ rents.

b. Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans.

c. Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.

d. Publicly Traded and Publicly Registered non-Traded REITS: i.PubliclytradedREITsaretradedonmajorstockexchangesandareboughtandsold

justliketraditionalexchange-tradedstocks.Sharepricescanfluctuatedaily. ii.Non-TradedREITsarenotpubliclytradedonexchangesandaresoldbya

prospectus.Non-tradedREITsarelong-terminvestmentsofferingonlylimited liquidity.Non-tradedREITsmayalsoinvolveadditionalrestrictionsandriskssoit isimportanttoreadandcarefullyconsidertheprospectusofaNon-tradedREIT beforeinvesting.TheprospectuswillcontaininformationabouttheREIT’s structure,objectives,expensesandfees.TheprospectuscanbeobtainedfromtheREITcompanyoryourFinancialAdvisor.Non-tradedREITsaresubjecttothe sameIRSrequirementsastradedREITS,whichincludereturningatleast90%of taxableincometoshareholders.Becauseoftheincomefeature,someinvestors includethemintheirportfoliosforthepotentialincomeflow.Non-tradedREITs usuallyhaveaminimuminvestmentamountwithanaverageholdingperiod of5-7years.


5. Annuities: These are best used by people needing tax deferral on account growth and/or a guaranteed lifetime income. Annuities provide specific guarantees2 and can be issued by insurance companies or non-profit organizations. Distributions made prior to age 59 ½, have a 10% tax penalty similar to an IRA. Annuities are contracts which will contain detailed information regarding risks, expenses, charges, withdrawal provisions and related benefit riders. Investors should read and study the contract carefully before investing.

a. Four Types of Annuities: i. Fixed rate Annuity ii.VariableAnnuity3

iii. Indexed Annuity iv.CharitableGiftAnnuity–Oftenissuedbynon-profitorganizations b. Common Benefits of Insurance Company Annuities i. Living Benefits: Some provide a guaranteed income benefit regardless of the market.

Some are as high as 6%. ii. Death Benefits: Some provide an increasing guaranteed death benefit regardless of

investment performance. iii. Investing in an annuity can defer or postpone income taxes. There is the possibility

of reduced income tax, if an investor is in a lower tax bracket when they start taking withdrawals and distributions from an annuity.

c. Common Drawbacks with Insurance Company Annuities i. They can be expensive ii. The various Guaranteed Living Benefit Riders and Death Benefits have

added costs.4 iii. They can be very confusing iv. Some have long surrender penalties v.Theyarenotagoodinvestmenttopassontoyourchildren–taxproblems!Ifthe

beneficiary is a non-spouse, all gains are taxable at the beneficiaries’ highest tax bracket. This can be disastrous if your children or other heirs are in a high tax bracket already. A great option to avoid future tax problems is to add a charity or your church as a beneficiary to the annuity. They are tax-exempt.

d. Gift Annuity i.Agiftannuityisacontractunderwhichacharity,inreturnforatransferofcashor

other property, agrees to pay a fixed sum of money for a period measured by one or two lives. A person who receives payments is called an “annuitant” or “beneficiary”. The contributed property becomes part of the charity’s assets, and the payments are a general obligation of the charity. The annuity is backed by all of the charity’s assets, not just by the property contributed.

ii.Potentiallypaysanincome,forlife(earnings&principal).Usuallysetfrom6%to9% based upon age.

iii. Great income tax savings for those who itemize deductions iv. Can be issued by your local church or favorite ministry. Can be used to fund a

scholarship or other goals of the donor. v.Idealforgiftsof$25,000andabovewherethedonorneedscurrentincomeand

plans to provide for ministry at their death.


2Guaranteesarebasedupontheclaim-payingabilityoftheinsurancecompany.3 Variableannuitiesaresubjecttomarketriskandonlysuitableforlong-terminvesting.Investorsshouldconsidertheinvestmentobjectives,risks,chargesandexpensesofthevariableannuityandunderlyinginvestmentoptionsbeforeinvesting.Forcompleteinformationonfeesandexpenses,pleasereadtheprospectuscarefully.

4LivingBenefitRidersmaynotbesuitableforallinvestors.

investor A investor B investor C investor d

year-end year-end year-end year-end Age invest Value invest Value invest Value invest Value

8 $0 $0 $0 $0 $0 $0 $500 $550 9 $0 $0 $0 $0 $0 $0 $750 $1,430 10 $0 $0 $0 $0 $0 $0 $1,000 $2,673 11 $0 $0 $0 $0 $0 $0 $1,250 $4,315 12 $0 $0 $0 $0 $0 $0 $1,500 $6,397 13 $0 $0 $0 $0 $0 $0 $1,750 $8,962 14 $0 $0 $0 $0 $2,000 $2,200 $0 $9,858 15 $0 $0 $0 $0 $2,000 $4,620 $0 $10,843 16 $0 $0 $0 $0 $2,000 $7,282 $0 $11,928 17 $0 $0 $0 $0 $2,000 $10,210 $0 $13,121 18 $0 $0 $0 $0 $2,000 $13,431 $0 $14,433 19 $0 $0 $2,000 $2,200 $0 $14,774 $0 $15,876 20 $0 $0 $2,000 $4,620 $0 $16,252 $0 $17,463 21 $0 $0 $2,000 $7,282 $0 $17,877 $0 $19,210 22 $0 $0 $2,000 $10,210 $0 $19,665 $0 $21,131 23 $0 $0 $2,000 $13,431 $0 $21,631 $0 $23,244 24 $0 $0 $2,000 $16,974 $0 $23,794 $0 $25,568 25 $0 $0 $2,000 $20,872 $0 $26,174 $0 $28,125 26 $2,000 $2,200 $0 $22,959 $0 $28,791 $0 $30,938 27 $2,000 $4,620 $0 $25,255 $0 $31,670 $0 $34,031 28 $2,000 $7,282 $0 $27,780 $0 $34,837 $0 $37,434 29 $2,000 $10,210 $0 $30,558 $0 $38,321 $0 $41,178 30 $2,000 $13,431 $0 $33,614 $0 $42,153 $0 $45,296 31 $2,000 $16,974 $0 $36,976 $0 $46,368 $0 $49,825 32 $2,000 $20,872 $0 $40,673 $0 $51,005 $0 $54,808 33 $2,000 $25,159 $0 $44,741 $0 $56,106 $0 $60,289 34 $2,000 $29,875 $0 $49,215 $0 $61,716 $0 $66,317 35 $2,000 $35,062 $0 $54,136 $0 $67,888 $0 $72,949 36 $2,000 $40,769 $0 $59,550 $0 $74,676 $0 $80,244 37 $2,000 $47,045 $0 $65,505 $0 $82,144 $0 $88,269 38 $2,000 $53,950 $0 $72,055 $0 $90,359 $0 $97,095 39 $2,000 $61,545 $0 $79,261 $0 $99,394 $0 $106,805 40 $2,000 $69,899 $0 $87,187 $0 $109,334 $0 $117,485 41 $2,000 $79,089 $0 $95,905 $0 $120,267 $0 $129,234 42 $2,000 $89,198 $0 $105,496 $0 $132,294 $0 $142,157 43 $2,000 $100,318 $0 $116,045 $0 $145,523 $0 $156,373 44 $2,000 $112,550 $0 $127,650 $0 $160,076 $0 $172,010 45 $2,000 $126,005 $0 $140,415 $0 $176,083 $0 $189,211 46 $2,000 $140,805 $0 $154,456 $0 $193,692 $0 $208,133 47 $2,000 $157,086 $0 $169,902 $0 $213,061 $0 $228,946 48 $2,000 $174,995 $0 $186,892 $0 $234,367 $0 $251,840 49 $2,000 $194,694 $0 $205,581 $0 $257,803 $0 $277,024 50 $2,000 $216,364 $0 $226,140 $0 $283,584 $0 $304,727 51 $2,000 $240,200 $0 $248,754 $0 $311,942 $0 $335,200 52 $2,000 $266,420 $0 $273,629 $0 $343,136 $0 $368,719 53 $2,000 $295,262 $0 $300,992 $0 $377,450 $0 $405,591 54 $2,000 $326,988 $0 $331,091 $0 $415,195 $0 $446,151 55 $2,000 $361,887 $0 $364,200 $0 $456,715 $0 $490,766 56 $2,000 $400,276 $0 $400,620 $0 $502,386 $0 $539,842 57 $2,000 $442,503 $0 $440,682 $0 $552,625 $0 $593,826 58 $2,000 $488,953 $0 $484,750 $0 $607,887 $0 $653,209 59 $2,000 $540,049 $0 $533,225 $0 $668,676 $0 $718,530 60 $2,000 $596,254 $0 $586,548 $0 $735,543 $0 $790,383 61 $2,000 $658,079 $0 $645,203 $0 $809,098 $0 $869,421 62 $2,000 $726,087 $0 $709,723 $0 $890,007 $0 $956,363 63 $2,000 $800,896 $0 $780,695 $0 $979,008 $0 $1,052,000 64 $2,000 $883,185 $0 $858,765 $0 $1,076,909 $0 $1,157,200 65 $2,000 $973,704 $0 $944,641 $0 $1,184,600 $0 $1,272,920

Total investment $80,000 $14,000 $10,000 $6,750 investment gains $893,704 $930,641 $1,174,600 $1,266,170 investment gains 11-fold 66-fold 117-fold 188-fold

These are hypothetical scenarios based on the stated contribution amounts and an assumed annual 10% rate of return. The numbers stated do not reflect any particular investment and are not implying any guarantee that you will

experience the same result. Past performance of any investment cannot be assumed or guaranteed into the future. With any investment, consider any and all objectives, risks, sales charges and expenses before investing.


AN EARLY STARTHow$6,750CanGrowtoOver$1Million

This table shows four ways to accumulate approximately $1,000,000 in a tax-sheltered account by age 65. Investor A contributes $2,000 at the beginning of each year for forty years (ages 25-65); Investor B, $2,000 a year for only seven years (19-25); Investor C, $2,000 a year for only five years (age 14-18); and Investor D, even smaller sums from age 8 through 13.

IV. College Funding A. 529 Plans: is an education savings plan operated by a state designed to help families set

asidefundsforfuturecollegecosts.ItisnamedafterSection529oftheInternalRevenueCode which created these types of savings plans in 1996. These are limited to accredited colleges and universities only, and must be used for qualified education expenses, otherwise penalties may apply. Types of 529 plans: 529 plans are usually categorized as either prepaid or savings plans. http://www.savingforcollege.com/intro_to_529s/what-is-a-529-plan.php 1. Savings Plans work much like a 401K or IRA by investing your contributions in mutual

funds or similar investments. The plan will offer you several investment options from which to choose. Your account will go up or down in value based on the performance of the particular option you select.

2. Prepaid Plans let you pre-pay all or part of the costs of an in-state public college education. They may also be converted for use at private and out-of-state colleges. The Private College 529 Plan is a separate prepaid plan for private colleges.

B. Coverdell Education Savings Accounts (ESA): The Coverdell Education Savings Account (formerly known as the Education IRA) was created in 1998 exclusively for the purpose of paying for “qualified education expenses” for an “eligible” student. Annual contributions are nondeductible, limited to $2,000 per child and can only be made until the account holder reaches age 18. The ability to contribute to a Coverdell ESA is phased out for higher income earners. The annual contribution deadline is April 15 of the following year. Sunset Provisions - Made Permanent: A “sunset” is an expiration date on a tax law, usually included for federal budgeting purposes. The following Coverdell provisions were set to expire at the end of 2012, but were made permanent by the American Taxpayer Relief Act of 2012:

•QualifiedwithdrawalsincludeK-12expensesinadditiontopost-secondaryeducationexpenses. This includes Home Schooling, Christian Schools and all Colleges.

•Distributions will be tax-free only for those taxpayers who do not claim an American Op-portunity or Lifetime Learning Credit (if eligible) for the same expenses in the same year.

Eligibility: Any individual under age 30 may be the beneficiary of a Coverdell ESA. Contributions: Contributions cannot exceed $2,000 per beneficiary per year. Dollars can be in-

vested in a variety of products, depending upon the investment objectives of the account owner. Distributions: The earnings portion of distributions that are used for non-qualified

educationexpensesaresubjecttoordinaryincometax,plusa10%penalty.Nopenalty exists for withdrawals due to death, disability or scholarship. Any balance remaining in the Coverdell ESA must be distributed or transferred to another eligible family member when the beneficiary reaches age 30 or dies.

Tax Considerations: Contributions are not taxed as they accumulate, and distributions used to pay for qualified education expenses are not subject to federal income tax.

Financial Aid Considerations: Coverdell ESAs may impact financial aid eligibility. They are considered assets of the account owner. If owned by the parent, Coverdell ESAs are considered parental assets, and this generally has less impact on financial aid.

C. Annuities: These are tax-deferred savings vehicles issued through insurance companies. This reference relates to non-qualified (non-IRA) annuities. If a grandparent invests money into a non-qualified annuity for the benefit of a grandchild the gains are taxable to the grandparent when the money is taken. The retired grandparent may likely be in a lower tax bracket than their younger children. Also money held in the grandparent’s name will not be counted against the child or grandchild when grants orscholarshipsarerequested.Moneyinvestedisafter-taxcontributionsanddesigned to grow tax-deferred. Any distribution from an annuity is considered interest (or gains) first and therefore taxable. All distributions taken before age 59 ½ are subject to a 10% IRS penalty.


D. Pell Grant: designed for students that come from lower-income families who may have a con-siderable difficulty paying anything towards their child’s college education, and thus display a very high financial need for additional funding to attend college. This means that you must demonstrate significant need for such funding before you will be able to qualify, and the way this is determined by the Department of Education is via the information you provided dur-ing the submission of the FAFSA application, or Free Application for Federal Student Aid.

E. Scholarships: Available from many sources but will take time to research. Start with financial aid office, your employer then the internet.

F. National Service Education Awards: up to $4,725. http://www.americorps.gov/for_individuals/benefits/benefits_ed_award.asp

G. Dual Enrollment: High School students take college courses H. Various Tax Credits:Unfortunatelythesechangeeveryfewyears.Currentlytherearethree

popular tools to reduce income taxes. They are The American Opportunity Tax Credit, Hope Scholarship and Lifetime Learning Credits. Consult your Tax or Financial Advisor for the best options available.

I. Savings/Investments best if kept in Parent’s name rather than the child. Assets in the student’s name must be spent down at the rate of 25% per year whereas assets in the parents name are used at the rate of 12% per year. For help in determining parent’s required financial contribution look at these websites: http://www.finaid.org/calculators/ and http://www.ifap.ed.gov/ifap/

J. Note: College Loans should always be a last resortnotyourfirstchoice!

V. Saving for Retirement A. Employer-Sponsored Retirement Plans

QualifiedaccountsandEmployerSponsoredRetirementAccountsareoftenknownbytheirtax code names, such as 401(k), 403(b), Profit Sharing Plan, SEP, Simple IRA, Roth IRA, Traditional IRA. These are called tax “Qualified” accounts that is used to save for retirement.

1.Terms:401(k),457,403(b),Thriftsavingsplan,ProfitSharing,SEP,SIMPLEIRA,etc... 2. These are nothing but labels or bumper stickers that are placed on an investment or account. 3. 45% of all eligible employees do not participate in their work sponsored retirement plan.

(www.ebri.org) a. Their excuse - “I can’t afford to save.”

b.TheBiblecallsthemafool!(Proverbs21:20) B. Personal IRAs 1. TRADITIONAL IRA: Contributions are tax

deductible but distributions prior to 59 ½ are subject totaxationandIRApenalty.Thereafter,distributions are taxed as regular income.

2. ROTH IRA:Contributionsaremadewithafter-tax money. All growth is tax-deferred until retirement when it can be taken tax-free. The law states that tax- freedistributionscanbemadeafter59½orfiveyears aftertheRothIRAwasfirstestablished(whicheveris longest). The original contributions can be removed at any time and for any reason with no tax penalty or taxes.ThegainsmustbeleftintheRothIRAasstated above otherwise there is a 10% penalty and ordinary income taxes due on the distribution.

a.Minimumwithdrawsnotrequired! b. Can pass completely tax-free to children c. Must have earned income to contribute


ManybenefitsofaRothIRAforyoung and old•Canbeusedforcollegefunding

(restrictionsmayapply)•Moneyinvestedisalmost

alwaysavailable•Evenworksforthoseoverage60!

Pictureyourselfinretirement-Buyausedcarfor$25,000. What will it really cost if you take themoneyfromyour401(k)orregularIRA•Nowyoumaybeinahigher

taxbracket•SocialSecurityincomemay

becometaxable•QualifiedRothDistributions

areTAXFREE


diversify to reduce risk or Potentially increase return

Conservative Portfolio Moderate Portfolio Balanced Portfolio Growth Portfolio

Stock: 25% Stock: 45% Stock: 50% Stock: 65%

Bond: 60% Bond: 40% Bond: 30% Bond: 10%

Cash: 10% Cash: 5% Cash: 5% Cash: 5%

Alternatives: 5% Alternatives: 10% Alternatives: 15% Alternatives: 20%

These are hypothetical examples of asset allocation models, commonly used by financial advisors.Diversification, while helping to reduce volatility and risk, does not ensure a profit or protect against loss.

The S&P index in an unmanaged group of securities. Indexes cannot be invested into directly. Past performance is not a guarantee of future results.

S&P 500: 1991 - 2011

1600

1500

1400

1300

1200

1100

1000

900

800

700

600

500

400

300‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ’11


VI. Key Strategies of Investing A. Diversification: Different types of investments may react to changing market conditions in

different ways. Diversification involves investing in different asset classes and investment vehicles in an attempt to limit exposure to losses in any one sector of the market.

1.Usestocks,bonds,realestate,ormutualfundsalongwithsomeguaranteedaccounts. 2. For those under age 40:Usemostlyequityinvestments,realestatefunds,orREITs

(no annuities). 3. For those approaching or in retirement: Add bonds and guaranteed investments to

your equity portfolio. B. Asset Allocation: •Diversifiesinvestmentsamongdifferentassetclasses •Helpsincreasethelongevityofyourportfolio •Helpsensureyoudonotdepleteyourretirementfundstooearly

1Investinginvolvesrisks,includingthepossiblelossoftheprincipalamountinvested.Forexample,equityinvestmentsaresubjecttomarketfluctuations.Foreigninvestmentsandemergingmarketsmaybemorevolatileandinvolveadditionalexpensesandspecialrisks,includingcurrencyexchangesandpoliticalandeconomicuncertainties.Small-companystocksascomparedtolarge-companystocksentailadditionalrisks,andtheycanhavegreaterpricefluctuations.Bondsareexposedtocreditandinterestraterisk(whenratesrise,bondfundpricesgenerallyfall).Lower-ratedbondsaresubjecttogreaterfluctuationsinvalueandaremoreatriskofdefaultofincomeandprincipal.RealEstateandspecialtyfundsmayinvestinalimitednumberofissuesorsectors,whichcanincreasevolatilityandexposuretoissuesaffectingthatsector.Diversificationdoesnotguaranteeprofitorprotectagainstloss.Let’sfaceit,there’sriskineverything–evendoingnothing.Yourinvestmentobjectiveistohaveatotalreturnof7%to10%ayear.Totalreturnincludesprinciplegrowthanddividendorincomegrowthofyourentireportfolio.Differentinvestmentswillhavedifferentgrowthandincomerates.Generallyspeaking,whenpursuinghigherreturns(bothprincipleandyield)itrequiresacceptingahigheramountofinvestmentrisk.

SampleAssetClasses:YoucanseeonthechartbelowthataLarge-CapGrowthstock(S&P500)wasnottoopopularfrom2000through2006.REITS,SmallorMid-sizeandForeigncompanystockseasilyoutperformedtheS&P500duringtheseyears.MorerecentlytheseSmalland Mid-sizedcompanystocksdidfarbetterthanForeigncompanystocks.1

REITs25.89%

REITs15.50%

REITs5.22%

Small-Cap Growth 48.54%

REITs30.41%

Mid-CapGrowth16.67%

REITs34.02%

Foreign11.63%

Small-CapValue

-28.91%

Mid-CapGrowth53.08%

Mid-CapGrowth29.71%

Mid-CapValue

23.74%

Small-CapValue

14.03%

Mid-CapValue

-9.46%

Small-CapValue

46.03%

Small-CapValue

22.25%

Foreign14.02%

Foreign26.86%

Mid-CapGrowth-34.80%

Mid-CapValue

-34.80%



Small-CapValue

22.83%

Mid-CapValue6.23%

Small-CapValue

-11.43%

Mid-CapGrowth43.40%

Foreign20.70%

REITs15.50%

Small-CapValue

23.48%

Large-CapGrowth9.13%

Large-CapGrowth-34.92%

Mid-CapValue

33.71%

REITs27.60%

Large-CapValue6.08%

Small-Cap Growth -9.23%

Foreign-15.66%

Foreign39.17%

Mid-CapGrowth18.94%

Large-CapValue5.82%

Large-CapValue

20.80%


REITs-37.84%

Foreign32.46%

Small-CapValue

24.50%

Foreign-13.96%

Large-CapValue

-11.71%

Large-CapValue

-20.85%

REITs38.74%

Mid-CapValue

17.88%

Mid-CapValue5.46%

Mid-CapValue

15.71%

Large-CapValue1.99%



Mid-CapValue

18.91%




Mid-CapValue

34.93%

Large-CapValue

15.71%

Small-CapValue4,71%


Mid-CapValue

-1.29%

Large-CapValue

-39.22%

REITs27.80%

Large-CapValue

15.13%




Large-CapValue

31.79%



Mid-CapGrowth11.57%

Small-CapValue

-9.78%


Large-CapValue

21.18%



Foreign-21.21%






REITs-17.38%

Foreign-43.06%

Small-CapValue

19.79%

Foreign8.13%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

This is a hypothetical example for illustrative purposes only. It does not reflect a specific investment. It assumes a 6.0% net (in your pocket) average annualized return on a $250,000 investment rounded to the first decimal.

The various columns are intended to demonstrate the impact of the sequence of returns, assuming 5% annual withdrawals of $12,500 (increasing at 3% annually for inflation).

The hypothetical returns shown are net of expenses or fees associated with the investment Portfolio. Fees vary depending on the portfolio. Past performance does not guarantee future results.

The myth of the 10% return

If only that return were guaranteed. It’s true that the historical average return for stocks since the late 1800s has hovered around 10%. However the order of returns matters more.

In the good years when your portfolio growth far exceeds what you expect allow it to be reinvested to help offset a negative year.

During a significant market downturn it may be wise to reduce your spending and thus your needed income to help protect the portfolio.

For safety always keep a reserve of cash available equal to 6 months income.


Sowhatcanyouplanfor?Theproblem,ofcourse,isthatyou’vegottoplanforsomething.Prettymucheveryretirementcalculatoroutthereasksyoutoinputapredictedrateofreturn.Andchoosinganoptimistic10%willmakeyourretirementsituationlookmuchrosierthatitmightbeinreality.TobeofthesafesideIsuggestusinggrowthestimatesof6or7percentandnevertakeanincomeofmorethan5%peryear.Somearesuggestinglimitingyourdrawdowntonomorethan4%annually.

5% hypothetical hypothetical hypothetical hypothetical Withdrawals Annual net $250,000 Portfolio Annual net $250,000 Portfolio Begin at rate of Value: negative rate of Value: Positive Age 62 return returns early return returns early

Beginning Value $250,000 $250,000

62 -18.6% $191,000 15.6% $276,500

63 -13.8% $151,767 6.4% $281,321

64 -4.5% $131,676 11.0% $299,005

65 5.4% $125,128 10.3% $316,143

66 7.3% $120,193 2.3% $309,346

67 14.4% $103,164 19.7% $355,732

68 -4.0% $94,048 2.3% $348,988

69 6.1% $93,208 7.8% $360,836

70 15.9% $82,211 8.7% $376,394

71 5.7% $70,510 13.3% $410,144

72 6.2% $60,892 8.7% $429,028

73 10.9% $49,829 6.2% $438,325

74 11.1% $35,010 13.9% $481,430

75 7.1% $19,954 8.1% $502,069

76 11.0% $0 -4.2% $462,075

77 -4.2% $0 11.0% $493,428

78 8.1% $0 7.1% $508,403

79 13.9% $0 11.1% $544,175

80 6.2% $0 10.9% $582,210

81 8.7% $0 6.2% $596,388

82 13.3% $0 5.7% $607,806

83 8.7% $0 15.9% $681,193

84 7.8% $0 6.1% $698,795

85 2.3% $0 -4.0% $646,173

86 19.7% $0 14.4% $713,812

87 2.3% $0 7.3% $739,748

88 10.3% $0 5.4% $752,737

89 11.0% $0 -4.5% $691,098

90 6.4% $0 -13.8% $567,127

91 15.6% $0 -18.6% $432,185

6.0% 6.0% Average Annual negative returns Positive returns early can net early deplete extend savings more than ror for Savings 30 years despite the same 30-year 15 years average annual net Period rate of return

C. The Sequence of Returns: Here’s a risk that’s hard to manage. Once you retire and begin taking a monthly income it can be hard for a portfolio to recover from early losses. This is where some guaranteed income may come in to play.

Our Rationale for Owning Gold

Many of our clients know that as Financial Advisors we favor holding gold when infla-tion is a perceived threat. Gold is less an investment than a store of value, a means of retaining purchasing power. Gold is not an investment with which to make money. It is a means of potentially protecting money you already have.

Gold stock or Bullion is generally not a good long-term investment. The key to making money with any hard asset is to know when to buy and when to sell the asset. Traders in these commodities are called speculators, not investors.

There is no certainty regarding an outbreak of inflation or hyperinflation, and it is a common misconception that one of these outbreaks is primarily an economic event. However, as they are often initiated by political decisions, inflation and hyperinflation are everywhere usually considered political events.

It has been said that to believe in gold is to distrust politics and politicians. While I and many others have distrusted politicians, we have not always owned gold, only because I believe inflation is likely do I use gold as a hedge against a loss in the purchasing power of cash. nothing can destroy a nest egg or a society faster than high inflation. Hyperinflation is devastating.

here’s what hyperinflation was like in Weimar germany and how gold performed

The most famous case of hyperinflation is the one that occurred in Germany during the Weimar Republic, from January 1919 until november 1923. According to Investopedia, “the average price level increased by a factor of 20 billion, doubling every 28 hours.”

One would expect gold to fare well during such an extreme circumstance, and it did – in German marks, quite dramati-cally. In January 1919, one ounce of gold traded for 170 marks; by november 1923, that same ounce was worth 87 trillion marks.

Inflation was at first benign, then began to grow rapidly, and quickly became a monster. What’s important to us as investors is that the price of gold grew faster than the rate of monetary inflation. The data here reveal that over this five-year period, the gold price increased 1.8 times more than the inflation rate.

The implication of this is sobering: while hyperinflation wiped out most people’s savings, turning wealthy citizens into poor ones literally overnight, those who had assets denomi-nated in gold or silver experienced no loss in purchasing power. In fact, their ability to purchase goods and services grew beyond the runaway prices they saw all around them.

The level of inflation experienced in Germany is incomprehensible to most Americans.

© Casey Research 2012 Source: bullionmark.com.au

Gold Price in Weimar Marks

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Hyperinflation accelerated; and the gold priceincreased from 400% to 2,000% per month – andin some cases per week.

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Will it occur here? At this stage no one knows. There is nothing unique about the uS that makes it immune to what happened in Germany. Whether it occurs depends on several factors, including the actions of politicians and the global economy. Based on their history and character, there is little reason to be optimistic.

Gold is not a solution to investing problems. It is often compared to an insurance policy against an inflationary explosion. The higher the probabilities of inflation, the more gold we hold.

In a world of honest money and honest government, there would be no need to own gold. But we don’t live in such a world and there is no indication anyone ever will before the Lord’s return. If such a world could be created, the price of gold would plummet.

We live in a world which is becoming increasingly corrupt in terms of the integrity of its money and its politicians. That is not new, although the extent of the duplicity of both has accelerated no small feat. After all, in less than 100 years of pretty good economic times, the Federal Reserve has managed to destroy 96% of the dollar’s purchasing power. Imagine what they may do in the crisis ahead.

Gold can be a hedge against political and monetary corruption. Gold and Silver is simply a bet that countries will continue to ignore reality and try and cover up, rather than solve problems.

Remember with any asset you can lose money over the short or long-term. Commodities like real estate, gold, silver and even oil and natural gas have had years and, in some cases, even decades of declining value. There are times where metals like gold and silver lose value when the stock and bond markets are making money.

This opinion piece is not a recommendation to buy or sell precious metal coins or commodities. We will be glad to discuss this subject with individuals in reference to their own personal financial situation.

People often buy out of logic and sell out of fear. When we are fearful and invest irrationality we will often be making a costly mistake. Let’s not lose focus and keep our trust in God not Gold.

Remember Jesus instruction in Matthew 6:25-34 that we are not to worry about the future but trust in the Lord. He also warned us in Luke 12:15; “Watch out! Be on your guard against all kinds of greed: a man’s life does not consist in the abundance of his possessions.”

I like the passage found in Proverbs 30:7-9 where we read, “Remove far from me vanity and lies; give me neither poverty nor riches, but give me only my daily beard. Otherwise, I may have too much and disown you and say, “Who is the Lord?” or I may become poor and steal, and so dishonor the name of my God.”


What a DifferencePlanning Can Make!

SAVing BorroWing For 10 Years 10-Year Loan

$14,160 $42,960

Total Cost1 Total Cost2

We can save $28,320by prefunding a future obligation instead of borrowing to pay for it.

1120 equal monthly payments of $122 assuming a 10% net return.2120 equal monthly payments of $358 assuming a 12% loan rate.

A portion of each payment may be tax deductible, effectively reducing the net after tax cost of the loan.

Thesearehypotheticalscenariosbasedonthestatedcontributionamountsandanassumed annual10%rateofreturn.Thenumbersstateddonotreflectanyparticularinvestmentandare notimplyinganyguaranteethatyouwillexperiencethesameresult.Pastperformanceofany investmentcannotbeassumedorguaranteedintothefuture.Withanyinvestment,considerany

andallobjectives,risks,saleschargesandexpensesbeforeinvesting.

AMounT needed:

$25,000



VIII. Mistakes to Avoid A.Longsurrenderpenalties.(UsuallyseenwithAnnuities.)Youcanavoidthem! B. Individually titled accounts (probateproblem) C. Investing in the wrong accounts in your 401(k) – or failing to review & adjust each year D.Notteachingyourchildrenwithanallowance E. Being underinsured or paying too much F.UsingconfusingBrokerageAccountsifnotneeded. G. Buying Timeshare vacations as an investment H. Feeling pressured by telemarketers to give to charity.

Go to www.GuideStar.org I.Notsharingfinanceswithyourspouse.Keepher

informed and review regularly.

IX. What to look for in a Financial Advisor A. A Believer who shares your convictions – Psalms 1:1 B. Training – For instance, the CFP designation C. Ten years or more of practical experience D. Someone who has his own house in order. Request a copy of his/her own credit report. What does

it say if they deny your request? It’s OK to ask. E. A holistic approach – You need a Financial Advisor who will take into account your whole financial

picture, from estate planning, income taxes, short-term savings, investing, retirement planning, life insurance and debt. They should monitor and adjust each year as needed and give specific advice on each area.

X. Tax Planing: Tax-free,Tax-deferred,TaxmanagedandTax-credits A. Tax-free Roth IRA, municipal bonds B. Tax-deferred Annuities & IRA have limitations & penalties: Regular tax-deductible IRAs

are available to a small percentage of working Americans. The availability and use of a tax-de-ductible IRA can be limited by existing employer sponsored retirement plans and Adjusted Gross Income. All distributions from an IRA is fully taxable. If distributions are made prior to age 591/2, a 10% tax penalty may apply. Exceptions include $10,000 towards the purchase of your first house, Rule 72(t) distributions and others.

C. Tax-managed investing – This can represent individual securities holdings, Exchange Traded Funds (ETF) and some mutual funds managed to be tax efficient. Some mutual funds specialize in being “tax managed” to minimize income taxes for the investors. This can be important for non-retirement plan assets.

D. Tax-credits – There are some investments that can generate significant tax credits for the investors. These types of investments usually have suitability requirements and some can be quite risky. They can also be considered illiquid and designed to be held for ten years or longer. They can include oil and gas exploration and some real estate housing. For example, some programs may of-fersizabletaxcreditswhileothersmayprovidelargetaxdeductionsthatmaylastseveralyearsafterthe initial investment. The income potential may last for 30 years or more and varies based on the specific investment. Other types of tax credits can include: Retirement Saving Credit for lower in-come tax filers who invest in a Roth IRA or Traditional IRA. For those with college expenses there are occasionally Credits available to reduce income taxes. Child tax credits are another great benefit for many families with minor children.


XI. Tax Preparation – Two options: 1. Self-Prepared 1. Changes every year – it’s hard to stay current 2. Errors are common and costly. IRA penalties are on the increase 3. Tax Cedits constantly change and are easily missed 2. Professional Tax Services (UseaChristianTaxPreparertoreceivebiblicalcounsel

–Romans12:2) 1. Find an Advisor who will give you a tax return and advice – not just an invoice. 2.CPAfirmsoftencharge$500ormorefortaxpreparation 3. Our firm prepares tax returns for hundreds of clients throughout the country – the

average return costs about $200, and we donate 100% of the profits to ministry focusing on Missions and Christian Education. We would be happy to prepare your tax returns every year.

XII. Insurance A. Life Insurance 1. Consider the need for Life Insurance (II Kings 4:1-7) 2. What is the Purpose? a. To provide protection for a lifetime income until you

no longer need it. b. To pay off large debts – house, college, etc. c.TwoTypesofLifeInsurance:WholeLife,UL,VUL

(cash value) & Term (non-cash value) d. Many of our older clients do not need life insurance once

their portfolios have grown. 3.Wearefindingthatroughly60%ofthe“breadwinners”areunderinsured! 4. Two Options for your spouse: Workfull-time(whilesomeoneelseraisesthechildren)or

placeanadinthechurchbulletin“lookingforhusband” 5. Determining Need: Determine monthly expenses when one spouse is called home to be

with our Lord. Multiply by 12 months and divide this annual figure by 5%. a. Example: $3,500 needed each month x 12 months = $42,000. b. Divide this $42,000 by 5% to get $840,000 lump sum. c. Subtract Employer group life insurance: $50,000 (example only) and you arrive at a

need of $790,000. d. Purchase a 20 to 30 year term life policy to protect your spouse. Extend as needed

until your investments can replace this needed income. Many by retirement have this amount invested and may not need life insurance.

e. At death this life insurance can be invested with the goal of earning an average of 6 to 8 percent annually. Some years more, others less. By living off of 5% your spouse can have her needs met with a hedge against future price increases. $790,000 x 5% = $42,000 per year or $3,500 each month.

f. My current Life Insurance = $ x 5% = annual income divide by 12 months

g. What monthly income does my wife and children need? $ for how long?

h. Hypothetical Example: $800,000 of 20 year term, (preferred non smoker) •Maleage30 - $44 monthly •Maleage40- $64 monthly •Maleage45- $101 monthly •Maleage50- $157 monthly

(Female rates are usually even lower)

B. Long-Term Care Insurance (Nursing Home) 1. Average annual cost: $91,652 or $251 daily for semiprivate room.

http://www.genworth.com/content/non_navigable/corporate/about_genworth/industry_expertise/cost_of_care.html Long-Term Care Statistics: http://www.phca.org/research/long-term-care-statistics.htm

2. Can quickly wipe out savings and potential inheritance to family or charitable intent 3. Women are at highest risk (up to 50% likelihood) 4. Who pays this expense? http://www.medicare.gov/nursing/payment.asp a. Medicare: only the first 20 days and a very small portion over the next 80 days if

you qualify b.Medicaid(welfare):aftereverythingisgone–accountsfor45%oflong-termcare

spending http://www.egyptianaaa.org/NHpayingForCare.htm c. Insurance: best option but can be expensive d.Self-Funding(outofpocket):Needatleasttwomilliondollarsnesteggatretirement 5. Four choices: a. Avoid the Risk – die early or pray for the Rapture b. Reduce the Risk – work to stay healthy and pray c. Retain or Assume the Risk – Self-insure as long as you have at least two million dollars

invested otherwise hide the money and hope for the best 1. Hire an elder care attorney (can be very expensive) to assist you in qualifying for

welfare or Medicaid 2. Ethical considerations – therefore usually not a good option 3.5yearlook-backforallgiftsmadebeforeyouareeligibleforanygovernment

assistance d. Transfer risk – Purchase LTC Insurance 1. Two Options: Prepay – lump sum payment or annual payments 2. Many insurance companies are increasing the rates or dropping out of the

market place 6. Changes in the Health care Law – ignorance can

destroy your nest-egg

XIII. Affording Retirement:

What do you call 25 years of unemployment?5 What was the cost of a postage stamp in 1985? (WhenPresidentReaganwasinoffice) True or False? The cost of living will go down once I retire.

My income needs to increase to keep pace with inflation. A bank CD stands for “Certificate of Depreciation.”

A. Figure out how much income you will need per month. 1. What debt will be paid off by retirement? House, car, credit cards, etc. 2.Whatexpensesareyouplanning?Travel,replacementcar… 3. What is your expected Social Security Income benefit? (see below) 4. Do you have any other recurring monthly income? B. Set your goals now. 1. Goal 1: To have an average total return (not yield) of 6% to 9% per year. 2. Goal 2: To have income increase with age. 3. Goal 3: To not outlive your money. C. Will you be able to stay retired?

http://www.SocialSecurity.gov/

5Answers:Retirement–22cents–False–True–False...orcoulditbetrue?


D. Hypothetical Illustration:

Average Monthly Living Expense: $4,500 Social Security Income: -$1,700 Spouses Social Security Income: -$975 Monthly Deficit: = < $1,825 > x 12 months = $21,900 Divided by 5% = $438,000 $438,000 X 5% withdrew = $21,900 annually

E. When should you begin taking Social Security? 1. The decision of when to begin taking Social Security retirement benefits is of the utmost

importance.FullSocialSecuritybenefitsarepaidat“NormalRetirementAge.”Normal Retirement Age varies, based on the year you were born. Reduced retirement benefits may begin as early as age 62.

2. Once retirement payments begin, the benefit amount generally does not change, except for annual “cost-of-living” adjustments.

3. Delay Retirement – A Bigger Benefit: What happens if you decide to wait and take your retirementbenefitslaterthanyourNormalRetirementAge?Yougetpaidforwaiting,in the form of a larger retirement benefit. For each year that you delay receiving benefits, up to age 70, your benefit is increased by a specified percentage. The amount of credit you receiveforeachyearofdelaybeyondNormalRetirementAgewillvarydependingonyour year of birth. For those born in 1943 and later, delaying retirement increases the benefit by 8% for each year.

62 7069686766656463

Age You Choose to Begin Receiving Bene�tsThis example assumes a full retirement age of 66, with a monthly bene�t of $1,000

Mon

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$750 $800$866

$933$1,000

$1,080$1,160

$1,240


NOTES:

Wisdom(orcommonsense!)dictatesthatweneedto save money for planned and unexpected ex-penses. This ranges from buying a house, repair-ing and replacing a car, college costs and wed-dings. (seep.Page39for10-yeargraphic)

However, the largest and most important ex-pense will be in our golden years. Most of us will eventually retire; some unwillingly due to medi-cal concerns others due to layoffs. Social Security income is very limited and not sufficient to cover basic living expenses. It must be supplemented either through continued employment or through investment earnings.

Money must be invested to grow quicker than the cost of living – inflation. Therefore accounts earn-ing less than inflation will likely severely limit your retirement options. A goal or rule of thumb should be earning an average return of between seven and nine percent annually. Some years you may likely earn far more which can offset those years where your portfolio loses value.

In 2012 it takes over $200 to buy what $100 did in 1987, just 25 years ago. Going back to 1967 it takes $687 today to buy $100 worth of goods. Another way of saying this - $100 then is now worth less than 15 cents.

Inflation is simply a fact of life and must be ex-pected. The danger comes with high prolonged inflation. Fortunately we have not experienced this in America. We are likely to experience some of this hyper-inflation in the years ahead due to our poor fiscal policies. When we experience inflation the worst place to have your money is in cash and bonds. They can quickly lose purchasing power. Some stocks, real estate and commodities on the other hand can still grow in an inflationary economy. We must remain diversified and have proper asset allocation.


F. What will inflation do to your nest-egg? http://www.usinflationcalculator.com/

Percent Purchasing Power year index increase of the dollar

1967 (Base) 100.0 n/a $ 1.00

1974 147.7 11.0% $ 0.68

1975 161.2 9.1% $ 0.62

1976 170.5 5.8% $ 0.59

1977 181.5 6.5% $ 0.55

1978 195.4 7.7% $ 0.51

1979 217.4 11.3% $ 0.46

1980 246.8 13.5% $ 0.41

1981 272.4 10.4% $ 0.37

1982 290.6 6.7% $ 0.34

1983 301.5 3.8% $ 0.33

1984 312.2 3.5% $ 0.32

1985 323.4 3.6% $ 0.31

1986 325.7 0.7% $ 0.31

1987 340.2 4.4% $ 0.29

1988 357.9 5.2% $ 0.28

1989 371.1 3.7% $ 0.27

1990 399.4 7.6% $ 0.25

1991 404.7 1.3% $ 0.25

1992 416.3 2.9% $ 0.24

1993 423.1 1.6% $ 0.24

1994 438.6 3.7% $ 0.23

1995 449.5 2.5% $ 0.22

1996 464.3 3.3% $ 0.22

1997 471.3 1.5% $ 0.21

1998 478.6 1.6% $ 0.21

1999 491.8 2.8% $ 0.20

2000 508.5 3.4% $ 0.20

2001 515.0 1.3% $ 0.19

2002 527.2 2.4% $ 0.19

2003 535.6 1.6% $ 0.19

2004 554.2 3.5% $ 0.18

2005 573.3 2.4% $ 0.17

2006 587.3 2.4% $ 0.17

2007 604.0 2.8% $ 0.17

2008 610.1 1.0% $ 0.16

2009 630.6 3.4% $ 0.16

2010 641.2 1.7% $ 0.16

2011 661.8 3.2% $ 0.15

Source: U.S. Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U.S. City Average, by expenditure category and commodity and service group. Purchasing power of the dollar is rounded off to the nearest cent.

“I wish we had a retirement plan that didn’t require matching six numbers.”


Cash Flow Worksheet/Spending PlanGive First, Then Save, Pay Your Bills, Give Sacrificially, and Then Enjoy Luxuries

Gross Income Current Goal Month 1 Month 2 TotalHusband Wife Total Income Expenses Current Goal Month 1 Month 2 TotalGiving: Tithe (Goal 10% of Gross) Saving: Short Term (Goal = 5%+ Savings Account) Long Term (Goal = 5%+ Invested) Spending: Taxes (Federal / State / Local) Housing (Mortgage / Rent Payment) Real Estate Taxes Home-Owner’s / Renter’s Insurance Heating (Gas / Fuel Oil) Groceries Electricity Phone (Home) Phone(s) (Mobile) Internet Water / Sewer Trash Removal Education Cash Allowances (Personal) Cash Allowances (Children’s) Insurance Premiums (Health / LTC / AD&D) Auto Insurance Auto Repair Gas / Other Auto Expenses Child Care Clothing Gifts (Birthdays / Weddings / Christmas) Other Debt Repayments: Auto (Loan Payment / Lease) Equity Loan Credit Card - Credit Card - Personal Loans Doctor, Hospital, Dental Bills Bank Loans Student Loans Offerings: Giving above the tithe Luxuries: Pets / Hobbies / Subscriptions Eating Out Vacation Cable / Satellite TV Other Total Expenses Surplus or <deficit>/Cash Flow

Avoiding Costly and Dangerous Mistakes in Retirement - Senior Luncheon Discussion

1. Retirement Income: Keepingupwiththecostofliving a. How much will you need? b. Can you stay retired? c.SocialSecuritybenefitsafterthefirstdeath?http://www.socialsecurity.gov/ d. Other sources of income?

2. Banking:CDs?(somecallthemaCertificateofDeprecation) a. How much is enough in short-term liquid savings? b. Money Market Accounts c. What about Internet Banks?

3. US Savings Bonds:Nolongerearninginterest? a. Where to keep, when to sell, how to title? b. Income taxes and Probate c. All bonds issued prior to 1983 (as of 2013) are no longer paying interest.

EE Savings Bonds fully mature in 30 years.

4. Investing:Reduceoravoidtaxes? a. Mutual Funds and Individual Stocks b. Keeping risk low while striving for growth c. Buying or Selling Coins – Gold and Silver? d. IRA, Roth IRA and other Retirement plans e. Should I consider an Annuity? f.DangersofanIndexAnnuity!

5. Insurance:Howmuchisenough? a. Do I still need Life Insurance? b.Long-termNursingCareInsurance c.MedicalInsurance(Medicare,Medicaid,PACEandPACENet)

6. Real Estate:ShouldIconsideraReverseMortgage? a. Scams and getting help with maintenance b. Retain the home, downsize or relocate to a retirement community? c. What to do with Timeshare vacation homes? d. Problems with multiple houses or rentals

7. Taxes:Areyouexemptfromfiling? a. You can minimize the taxes due b. Homestead housing credit c. What to keep and how long to retain your tax records


8. Debt:Remember–Ifyoudonotearninterest,youwillpayinterest! a. Buying your next car? b. Still have a mortgage? c. Credit cards?

9. Estate Planning:Out-dateddocuments a. What is a Christian’s Will? b. Do I really need a Power of Attorney?

What is HIPAA? c.UnderstandingProbateandattorney’sfees d. Do I need a Living Trust? e. Keeping family informed

10. Final Expenses:Pre-planning orPre-PayingFuneralExpenses

a. Average Costs: $7,500. Comparison shop. b. Guaranteed vs. non-guaranteed funeral c. Federal Trade Commission6Recommendations.“Prepaidfuneralplansoften

stacked against consumers” according to Wall Street Journal7

d. Insurance Policies sold by funeral home: usually a very bad option e. Medicaid Planning: Irrevocable bank account paid to funeral home

11. Procrastination:Delayinguntiltomorrowwhatyoushoulddotoday a.Notplanningforthefuture(Proverbs22:3) b. Damage of inflation and rising cost of living c. Annually reviewing and updating your portfolio d. Ask questions, learn, work with a Trusted Advisor who shares your faith

12. Other Potential Problem Areas: a.Identitytheft b. Disabled spouse or problem child c. Loaning or giving to friends and family

d. Dealing with telephone or direct mail solicitors


6http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro19.shtm7http://online.wsj.com/article/SB10001424052748704513104575256613550131600.html

Maybeit’stimetoworkwithaTrustedFinancialAdvisorCall us at (610) 385-4500or speak with the presenter


What Makes an Estate Plan “Christian?”

ABiblicalPerspectivetoDesigningYourWillorTrust

Estate Planning is likely the single most important act of Stewardship that many of us as Christians will ever undertake, whether we are nearing the end of our lives and mainly focused on getting our affairs in order, or perhaps in middle age and contemplating approaching retirement, or even younger couples with growing families with seemingly little of life’s financial resources.

Estate planning boils down at its core to a process of determining to whom, how and when we will transfer the stewardship of what God has entrusted to us when the time comes when we cannot serve as the steward ourselves.

As believers we understand that God is the owner of all that He has entrusted to us and that we seek to arrange our affairs in a way to please the Lord who has created and owns all that we see.

We are faced with a number of fundamental considerations like how much is enough for my children, when should they receive an in-heritance and how much of that should be an outright gift of capital (or cash) vs. an income stream that could be made available over a number of years. Do they have the training and wisdom to manage the money to honor the Lord or will they simply pay off their credit cards just too slowly dig another hole of debt and be in worse shape five years later?

What kind of eternal impact do I want to make to ministries that have been important to me and my loved ones over the course of our lives? “For we must all appear before the judgment seat of Christ, that each one may receive what is due him for the things done while in the body, whether good or bad.” 2 Cor. 5:10

What kind of tax and probate strategies need to be adopted to be assured that there is the smallest amount possible lost to estate taxes, income taxes, lawyer’s fees and probate?

The Bible says that planning is a sign of wisdom. Proverbs 21:5 and 22:3. Leaving money or other resources to your local church, Christian college or other God-honoring ministry may be your final act of stewardship.

Download our Estate Planning worksheet to use with your local attorney or one of our recommended Christian attorneys. It may be found in our “download section” on our website. Go to www.TheLifeGroup.org

Feel free to call with any questions at (610) 385-4500 or visit our offices at 978 Ben Franklin Highway (East), Douglassville, PA 19518.

Estate Planning from a Biblical Worldview“Heisnofoolwhogiveswhathecannotkeeptogainwhathecannotlose.” ~ Missionary Jim Elliot who was martyred by the Inuit Indians in South America

Part One: Leaving a Legacy

I. The Treasure Principle A. Where is your treasure? 1. IRAs, 401(k), stocks, mutual funds, annuities, real estate 2. Or do you have a different perspective? B. What will last? 1.FinitePerspective–Farmland,houses,gold,investments–thesethingswillperish! 2. Infinite Perspective – “Fix your eyes not on what is seen, but on what is unseen. For what

isseenistemporal,butthethingswhicharenotseenareeternal…Forwewalkbyfaith,not by sight.” 2 Corinthians 4:18, 5:7 + Col 1:16

II. The Reward Principle When we invest money now in God’s kingdom, we will receive great rewards later in heaven. Investmymoneywhere?HowdoIdothat?

A. What does Jesus expect? Jesus said, “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal; but lay up for yourselves treasures in heaven…Forwhereyourtreasureistherewillyourheartbealso”Matt6:19-24

B. Three Questions: 1. If you had enough money what would you do differently? 2. If the doctor said you only had 3 years to live what would you do different? 3. If you were to die tomorrow what would be your greatest regret? C. The Bible states that we will be judged for our Stewardship and our service

to the Lord.

During this discussion remember that… •TheBiblesaysthatinthemultitudeofcounselorsthereiswisdom.Talkwithyourchildren,

your pastor, accountant and/or attorney and seek wisdom. •RoyRussellnorthepresentersfromTheLIFEFinancialGroup,Inc.areattorneysandthisis

intended to be informational only and should not be construed to be legal advice. You should consult with a licensed attorney regarding any legal issues. This is why we usually bring a local Christian attorney to assist with our presentations.

•Theinformationthatweprovideabouttaxesisgeneralinnatureandonlyintendedfor informational purposes.

•Eachperson’staxsituationisuniqueandyoushouldconsultwithacompetenttaxadvisor regardingthetaximpactofanygiftorothertransaction.


Webelievethat…God prospers us not to raise our standard of living, but to raise our standard of giving.

III. Application: Ways to Raise your standard of giving – Often-overlooked Ideas A. Give frequent flyer miles to the church if your airline permits B.GiveMatchingGiftsorChallengeGrants–encourageotherstogive 1.A$5,000ChallengeGrantencouragedover$30,000ingifts 2. Can be used for Mission projects, Christian schooling, etc. C. Assign rebates to the church D. Eliminate eating out for a period – a real sacrifice for some E. Do extra work for a specific project – purpose driven employment F. Have yard sales or re-sale items on e-Bay to fund a

specific project G. Give collectibles: coins, gems, guns, books and take

tax deduction H.Softwarelicenses–cheaperupgradesthanbuyingnew I. Give shares of stock or a mutual fund to ministry as your tithe 1. Stock Splits, Inherited Stock, Life Insurance

Company Stock 2. Examples include Met Life shares & Prudential shares J.Donateland,personalresidenceorotherrealestate! 1. Examples include a Bargain Sale, a Life Estate, or

anoutrightgift 2. Real estate is then protected in the event of needing long-term care K. Set up a Charitable Remainder Trust; A CRT has the potential to... 1. Turn appreciated assets into a monthly income 2. Avoid capital gains taxes & take a sizable income tax deduction 3. Direct to various ministries at your death – you can maintain control L.PurchaseaGiftAnnuity 1. An investment contract providing specific benefits issued by

Christian ministries 2. Invest $25,000 or more in the Lord’s work and receive a monthly income for life and a

generous tax deduction for those who itemize M. Fund a Life Insurance Policy 1.$50,000giftcanprovideupto$300,000scholarshipfund(basedonageandhealth) 2. You can give old policies no longer needed to the church 3. Consider adding or changing beneficiaries to include your church and/or other ministries N.StartyourownFamilyFoundation–OpenaDonor-AdvisedFundw/$5,000 1. Money is invested and has potential to grow until given away, can protect privacy; grown

children can be subsequent advisors 2. Contribution tax-deductible when added to Foundation 3. Easy to change beneficiaries – no attorneys needed & no separate tax return 4.NoEstateTax,NoIncomeTaxandNoProbate/Lawyers’Fees O.NameaministryasthefinalbeneficiaryofyourIRA,annuityor401(k)plan 1. This is wise tax planning – Retirement plans are usually fully taxable to your children,

family and friends but tax-free to charity, your church and various ministries 2. You should list your spouse first then add ministry along with your children 3. Communicate your plans to your family, be an example to your family 4. Easy to change or update as needs change for the cost of a postage stamp P. Give through your will or trust 1.Whylimitthecharitablegifttoatithe?ItallbelongstoGod 2.Mostcommonwayofgiftingtoministryatdeath 3.Updatesandchangesmaybecomenecessaryasthingschange 4. Seek competent legal counsel; it’s too easy to make a mistake doing it yourself.



Estate Planning from a Biblical WorldviewPart Two: Planning Your Estate

I. TERM DEFINED: Christian Estate Planning: Planning for the management and disposition of your property whileyouarealive(includingifyoubecomeincapacitated)andafteryourdeath;andplanyourhealth care if you become unable to take care of yourself based on Biblical principles and personal convictions. i.e. Christian Education

II. THE NEED: We find that less than 50% write a will and leave their family in distress.

How should we show love? By preparing and planning. Prov 22:3 Why? - Because, no man has power over the day of his death. Ecc. 8:8

III. BASIC PLANNING (WRITING A WILL) IS OFTEN NEGLECTED “Estate planning is confusing.” “I don’t want to think about death.” “I don’t think I have a large enough estate.” “The topic is too overwhelming.” “The Lord is coming soon – who cares?” “I don’t know who to name as guardian.”

IV. GOD EXPECTS US TO PLAN Be a blessing to your children. ....................................................................... Proverbs 13:22 An inheritance is to be expected. ................................................................... Proverbs 19:14 Planning leads to profit. .................................................................................. Proverbs 21:5 The foolish man doesn’t save. ......................................................................... Proverbs 21:20 The foolish man doesn’t plan. ......................................................................... Proverbs 22:3 We should know our net worth. ................................................................... Proverbs 27:23-24

V. WHO NEEDS AN ESTATE PLAN? Most adults should have an estate plan, regardless of the value of their estates. An estate plan isnecessarytonamethebeneficiarieswhowillreceiveyourpropertyafteryourdeath.Ifyourestate has substantial value, a good estate plan can assist in preserving your property for your heirs and reducing or eliminating federal estate taxes. Everyone should also designate the person who is to manage their financial affairs, care for them and make health care decisions in the event they become incapacitated.

VI. WHAT DOCUMENTS ARE INCLUDED IN AN ESTATE PLAN? Last Will & Testament Power of Attorney for Financial Matters Power of Attorney for Healthcare Living Will–(oftenincludedinHealthCarePowerofAttorney) Living Trust and Pour-Over Will

– (useful to avoid Probate & necessary in some states)

A. What is a Last Will and Testament? The Will is a legal document in which you identify the beneficiaries (people and/or minis-tries)whowillreceiveyourpropertyafteryourdeath.TheWillalsonamesapersontobeyour personal representative to administer your estate. Your personal representative (Ex-ecuter) manages your affairs and is responsible to see that your property is distributed as provided in the Will. The Will may also name the guardian(s) of your minor children, the trustee(s) of property that belongs to minor children and make specific distributions ac-cording to your wishes. Customizing your Will - Add your convictions, what’s important to you? Take the time to do it right, make it count.

B. What is a Power of Attorney? Thisdocumentgrantsoneormorepeoplethepowertomanageyourfinancialaffairsifyoube-come unable to do so. The holder(s) of your power of attorney have the legal power to make binding decisions that affect your money, property, and other assets, including, paying your bills and spending your money. Without a power of attorney, your family may be required to obtain a court-supervised conservator to manage your financial affairs which is expensive and time consuming. A power of attorney terminates on your death.

C. What is a Health Care Power of Attorney? This document names a person to make healthcare decisions (including mental health care decisions) for you if you are unable to make those decisions for yourself. It may contain the language of a Living Will also called an Advance Directive.

D. What is a Living Will? A Living Will is a document in which you may declare that if you are in a terminal condi-tion, you do not want your life to be prolonged and do not want life-sustaining treatment, beyond comfort care, if that treatment would serve only to artificially delay the moment of your death.

E. What is a Living trust? A Living or Revocable Trust is a document containing provisions for who should manage one’s financial affairs in the event of disability; who should administer the trust estate upon death;andhowthetrustestateshouldbedividedanddistributedafterdeath.ThisTrust


What should it include?Your Testimony and Challenge to the heirs

Charitable Planning for Ministry – why limit the gift to a tithe?Provisions for Your Children at specific ages

Did you forget to include any of your children?Christian Schooling or College?Guardian, Trustee & ExecutorDid you provide for backups?

What age are they to receive the money?Proper Witness’s – (spouse & beneficiaries cannot witness)

Memorandum – listing personal assets (changed and updated by you)Self-Proving Affidavit – validates that the Will is the original

(alsoknownasan“InterVivosTrust”)isrevocableoramendableduringlifetime.The parties that are involved in the trust are: Grantor (also known as “Trustor” or “Settlor”): The individual(s) that creates trust. The Grantor must transfer title of ownership for each asset that will be placed in the trust from hisorhernametothatofthetrust.Thisisoftenreferredtoas“funding”thetrust. Trustee: The individual(s) or corporation(s) that manage the trust assets in accordance with the provisions set forth in the trust agreement for the benefit of the beneficiary(s) of the trust.

Successor Trustee(s): In the event the initial Trustee is unable or unwilling to act. Beneficiary(s): Those individuals or charities that the Grantor intends to benefit from the trust – In most instances, the Grantor, initial Trustee, and initial Beneficiary of a Revocable Trust are the same person. As both the Grantor and the Trustee, an individual can maintain full control of the trust until his or her death or incapacity.

1. Advantages of a Living Trust a. Continuity of Management during Disability or Death

By properly funding the Revocable Living Trust, it can continue to manage trust assets regardless of the Grantor’s mental or physical incapacity or upon the Grantor’s death. Note:AlthoughaPowerofAttorneyforPropertymightalsobeeffectiveinmanaging

assetsintheeventofadisability,financialinstitutionsoftenfindapowerofattorney lessauthoritativethanaRevocableTrust.Furthermore,aPowerofAttorneybecomesineffectiveupontheprincipal’sdeath,therebyrequiringtheinitiationofprobate proceedingswhichcanauthorizethemanagementoftheassets.

b. Flexibility The flexibility of a Revocable Trust allows choosing whether to terminate the trust and distribute assets immediately following death or have it continue and control the distribution of assets for named beneficiaries.

c. Avoidance of Probate The primary reason for creating a Revocable Trust is to avoid the probate process. The critical requirement is to make sure that the trust is funded during one’s lifetime. When you own real estate in several states your children will need to hire an attorney who is licensed in each state to probate the property. This is eliminated when deeds are retitled into the Living Trust.

d. Lost or Destroyed Originals UnlikeaWill,whichtypicallyhasonlyonesignedoriginal,itisacceptabletosignmultiple original copies of a Revocable Trust. Therefore if one is lost or destroyed, then you can produce another original which will have the same authority. If a signed Will is lost or otherwise destroyed, there is a rebuttable presumption that it was purposefully revoked.


ThePour-OverWillisalwaysusedinadditiontoaLivingTrustforanyassetsnotalreadytitledinthenameoftheTrust.TheseassetsmustthengothroughProbateandthenbeplacedintothetrust.ItisverycommonforanindividualtohaveacquiredassetsthatwereneverplacedintheLivingTrust.

e. Privacy A Revocable Trust can usually avoid having public exposure to the disposition of your assets, its value and the disclosure of your beneficiary(s).

2. Disadvantages of a Living Trust a. More detailed (longer) and more confusing than a Will b.Costtodraftareusuallymuchhigher c. Trust Funding (initial and ongoing as new assets are acquired) d.BenefitsareoftenoversoldsinceLivingTrusts

areoftennotneeded

VII. OTHER TYPES OF TRUSTS Introviros Trust is trust language in a Will IrrevocableTrustisunchangeableandoftenusedinMedicaidplanning Irrevocable Life Insurance Trust – not owned by you therefore not taxable Family Trust, Credit Shelter Trusts or Marital By-Pass Trust – reduce estate taxes QualifiedPersonalResidenceTrust–gifthousebutremainthereforlife CharitableRemainderTrust(CRT)–giftassets,maintaincontrolandincome CrummeyTrust–Awaytomakegiftstominorchildrenandlimitorcontroltheiraccess

until a specified age. UGMAorUTMA–Anaccountintheminorchild’snamelistingtheparentasthe

custodian. Assets are usually available to the child at age 18 and if not trained correctly – gone before age 20.

VIII. TAXES While it’s true no one can escape death and taxes, some taxes can be reduced and with planningoftenavoidedatdeath.Taxesdueatone’sdeathareinaconstantstateofflux. THEREAREGENERALLYTHREETAXES:

StateInheritanceTaxes:Indiana,Iowa,Kentucky,Maryland,Nebraska, NewJerseyandPennsylvania

StateEstateTaxes: currently 16 states impose their own estate taxes (includes life insurance benefits)

FederalEstateTaxes: up to 55% of estate including life insurance death benefits

IX. WAYS TO PASS ASSETS TO A LOVED ONE: A. Probate Transfers – The term “probate” means “to prove.” The legal definition is the “act

or process of proving a will.” In reality, the probate process encompasses the entire admin-istration process, determination of total assets, paying debts, liabilities and taxes, and only then distribution of remaining assets to beneficiaries. Probate is the process that enables beneficiaries to receive property that is rightfully theirs.

1. Intestate Transfers of Property (Transfers without a Will) UnderPennsylvaniaintestacylaw, property passes to the surviving spouse and blood relatives and adopted children. Here are some examples of how the law works:

• If a decedent is married, Pennsylvania law provides that the surviving spouse will receive the majority of the estate. The actual amount varies, depending upon whether the decedent and the surviving spouse have mutual or separate children or no children at all. In many cases, the decedent’s children or parents receive a share of the estate.

• If a decedent is single and has children, the children divide the estate equally. If one of the decedent’s children is dead, the grandchildren in that branch of the family receive the dead child’s share.


• If a decedent has no spouse, children or other descendants, the decedent’s parents receive the estate. If the decedent has no living parents, the estate goes first to the decedent’s siblings, then to nieces and nephews and their children. If no relatives are living at this level, the estate goes to grandparents, then to aunts and uncles, then to cousins and their children. If no relatives are living at this level, then the remaining property will go to the State of Pennsylvania.

2. Testate Transfers of Property (Transfers with a Will) If a person has a valid will, a person can, within certain limits, distribute his or her assets to anyone he or she desires. The principal limitation is that a spouse has a statutory right to a share of the estate. A husband or wife cannot disinherit the other. If the will leaves little or nothing to the spouse, the spouse can take a statutory share of the estate, assuming there are assets. Pennsylvania probate law allows a spouse to claim up to half of the estate. A parent cannot disinherit a minor child for whom the parent has an ongoing support obligation. Adult children certainly may be omitted; they have no legal right to receive an inheritance from their parents.

3. Advantages of Probate a. Heirs and beneficiaries are protected by the court b. Orderly transfer of assets in a public manner, approved by the court c.Validityoftitleofthetransferredassetsisnotinquestion d. All disputes of the distribution of your estate are settled under court supervision e. Creditor’s claims against your estate can be made for a limited time (state law dictates) f. Your estate, while in probate, is a separate tax entity. Prior planning may afford some

tax savings. Your estate has a new tax ID number and must file a tax return. 4. Disadvantages of Probate a. Probate can be an extremely costly manner of transferring your assets b. The process can be very time consuming c. Probate court proceedings are inherently inflexible. d. Probate proceedings are a matter of public record. There is no privacy when your

estate goes through probate. e. Ancillary Probate – probate in other states where real estate was owned 5. CostOftenRelatedtoProbate - Typically, fees depend on the size of the estate (the larger

the estate, the higher the costs). However, small estates with administration problems (numerous creditors, real estate, closely-held businesses, etc.), can generate significant probate costs and legal fees.

a. Filing Fees: Filing the application involves a fee to cover the cost of processing. Additional filing fees may be necessary if additional documents are required to be filed during the probate process. For example, if the estate consists of real property in differentcountiesorstates.Usuallylessthanfivehundreddollars.

b. Attorney Fees: Generally, the attorney fees are the most significant cost associated with an estate administration. The fees vary by location and complexity of the estate. Some states allow the attorney to charge a percentage of the estate (usually on a sliding scale) or simply by the hour.


c. Executor Fees:Theexecutorisentitledtoreceiveafee,oftenbased on a percentage of the probate estate. Family members occasionally waive the fees and simply take the inheritance. Fees are subject to Federal Income Tax whereas an Inheritance is not.

d. Bond Premiums: If the state requires the executor to post a bond, the surety company will require an annual premium to ensure coverage. This step can be avoided through aproperlydraftedwill.

e. Appraisal Fees: Appraisal fees may be incurred in the following ways: 1. When the estate includes real property or closely held businesses. 2. When an estate or inheritance tax return must be filed to substantiate the value of

the assets shown in the filings. 3. To facilitate division of the estate when disagreements among heirs or beneficiaries

arise as to the value of certain assets.

B. Non-Probate Transfers-Non-probateassetsgenerallyfallintothreecategories:thosewhich are transferred by title, by contract, or by trust. It’s usually wise to minimize or avoid probate. Somecashshouldbeleftintheestatetopayfinalexpensessuchastaxes,funeral expenses, etc.

1. By Title: Joint Tenancy with Rights of Survivorship Property owned in joint tenancy with rights of survivorship avoids probate because his or her interest in the property automatically passes to the surviving joint owners(s) by op-eration of law at the first joint owner’s death. By owning property in this manner, probate is avoided at least until the second death. Transfer on Death Accounts Transfer on death (TOD) accounts (also known as payable on death accounts or Totten trusts) provides an alternative to jointly owned assets for bank accounts. Some banks use the term POD (payable on death) or “in trust for” when adding beneficiaries to an ac-count. During lifetime, the beneficiary (children) of the TOD account has no rights to the account. The beneficiary of the TOD account can be changed at any time by the account owner. At death, the asset is transferred to the beneficiary without going through the probate process. It is usually limited to mutual funds, bank and brokerage accounts and typically not used for real estate. A few states do permit real estate to be titled in a similar fashion to avoid probate. Currently it is limited to Arizona and Missouri.

2. By Contract: Beneficiary Designations Beneficiary designations under life insurance policies, annuities, retirement plans and IRAs avoid probate because they follow contractual guidelines specifying the person to whom the proceeds should be paid. There is no need for a probate court to oversee the distribution of these types of assets, unless the named beneficiary is the “estate”. This is usually not a good idea.

3. Through a Trust: If the decedent has created and funded a trust, the trust will generally contain provisions regarding transfer of the property at the time of death. The most com-mon form of Trust is the Grantor or Living Trust. A trust is a legal entity created by one party for the benefit of himself/herself or other parties. It can hold title to virtually any type of property. With a Revocable Trust, which is a popular will substitute, the named trustee (or successor trustee) generally is given authority to pay the decedent’s bills and has a fiduciary responsibility to distribute the trust property to beneficiaries (including other trusts) as provided in the provisions of the trust agreement.


X. IS YOUR HOUSE IN ORDER? Do you have a Will that displays your beliefs and convictions? Consider a Living Trust if you own real estate in several states or you live in California. Do you have a Power-of-Attorney to protect your family? Do you have a Health-Care Power-of-Attorney that includes the federal privacy language HIPAA? Let us help you.

Estate Settlement Cost FunnelWHAT HAPPEnS TO YOuR ESTATE AT YOuR DEATH?

Ataperson’sdemise,hisorherassetsaresubjecttoanumberofexpensesthatcansignificantlyre-ducethesizeoftheestateleftfortheheirs.Properestateplanningcanminimizetheseexpensesanddetermineinadvancehowthecoststhatremainwillbepaid.


Proper estate planning will get more to your loved ones

Personal Property

RetirementPlans

Stocks &Insurance

Business Interests

• Death Taxes• Accounting Fees• Appraiser’s Fees

• Probate Fees• Attorney Fees• Executor’s Fees

Remembertotellyourelderlyparentshowtoretitletheirbankaccountsandotherinvestmentsinordertominimizeoravoidthecostsrelatedtoprobate.Ifyouneedhelpjustcallourofficeat(610)385-4500.

Personal Review Meetings(ForthosewhocouldnotmeetwithusMondayorTuesday)

Download our Family Legacy Data Sheet and/or our Estate Planning worksheet at www.TheLifeGroup.org

Complete as much of the Legacy Data Sheet as is possible and forward to us at 978 Ben Franklin Highway East, Douglassville, PA 19518. Feel free to call us with any questions or concerns at (610) 385-4500.

Please include a copy of your Will and POA(Estatedocuments), Tax Return (first3pages), Investment statements, Retirement Plans, Insurance, Banking, Debts, etc.

We will call to review the information and your life goals. We will follow-up with specific recommendations.

Youwillthenreceiveadetailedletterandlistof8to10thingstochangeorworkon withinstructions.

We offer a wide array of services, and specialize in the following areas:

Wealth Management-Wemanageover$100MillionforclientsallovertheUSA.Weusea combination of strategies and solutions based upon the goals and needs of each client. Our /objective is to achieve proper diversification in our clients’ portfolios in order to reduce risk. Of course, diversification and asset allocation cannot guarantee a profit or protect against a loss.

Estate Planning – It is our goal to preserve and grow our clients’ wealth so that they can enjoy it while they are alive, bless their families, and fund ministry when God calls them home. Our team of expert CFP’s®, financial advisors, and support staff work with attorneys and accountants to minimize taxation, simplify the distribution of assets and reduce probate cost.

Tax Preparation and Advice – We have observed that very few tax preparers actually give advice with a tax return. For this reason, we are committed to providing our clients with top notch tax preparation and advice to properly minimize taxation in the current year and how to improve next year’s tax return.

Insurance Planning – An important part of planning for the future is considering insurance options. Based on your state of residence we can usually offer term life insurance, long term care insurance, and disability insurance. We find that many of our older clients no longer need life insurance because their investment portfolio has grown.

Retirement Income Planning – How much income will I need during retirement? What sources of income will I have in retirement? When will I be able to retire and will I be able to stay retired? These are just a few of the critical questions we need to answer as you enter this pivotal phase of life. With this information we can take steps today to help you achieve your retirement goals. Allow us to become your trusted family Advisor.

There is no fee if you indicate that you are part of this ministry.OurnormalInitialReviewFeeis$350.


The LIFE Financial Group, Inc. is a full-service financial advisory and wealth manage-ment firm. We teach biblical principles of stewardship along with practical applications.

Roy L. Russell, CFP and President

Estate Planning, Wealth Management, Tax and Advisory Services since 1978

Roy is the president and founder of The LIFE Financial Group, Inc. As a Certified Financial PlannerTM and an Investment Advisor Representative for Geneos Wealth Management,Inc.(MemberFINRA/SIPC),heisresponsibleforoverseeingmorethan100 million dollars of invested assets for clients around the country. Roy and the staff also actively minister in conservative Bible preaching churches around the country with their three-day Stewardship Lifestyle Seminars. Maranatha Baptist Bible College has also developed a relationship with Roy and his staff to promote financial literacy in their supporting churches. In addition, Roy is a graduate of Planned Giving InstitutethroughtheCollegeofWilliamandMaryinVirginia.Hehastaught workshops on pastors’ taxes and oversees the tax department at The LIFE Financial Group as well as managing his personal donor advised charity called the Institute for Biblical Endowment, a public charity though WaterStoneFoundation.

Roy oversees their Tax Department as they prepare taxes for families around the country. In addition to the normal preparation they specialize on giving tax counsel to reduce your tax liability in the coming years. 100% of the profits from the Tax business go back into ministry. We focus on Missions and Christian Education.

He has been married for more than 30 years and has four grown children and 10 grandchildren. Roy’s many hobbies include photography, sailing on tall ships, travel, waterskiing, hiking and building things for the grandchildren in his wood-working shop. He and his wife Lana attend HighPointBaptistChapel in Geigertown, PA.

OTHER STAFF:

There are a dozen staff members who participate in one way or another with our Stewardship Lifestyle meetings. Speakers in addition to Roy Russell will vary based on location and time of year. All profess Christ as Savior and are active in their own local church and are highly trained in financial matters.

ATTORNEY:

We strive to include a qualified and experienced Christian attorney to our meetings. He or she is not affiliated with us in any way. We have interviewed the attorney weeks ahead to be sure of background and qualifications. In lieu of the attorney paying us a fee for participation in these meetings we have negotiated a discount for the document preparation for the entire church.



NOTES:

Our Mission StatementWe exist for the sole purpose

of providing professional,Biblically sound financial services,

counseling and educationto the Christian community.

We work to build up the churchby teaching, counseling and motivating

believers to better manage their resources.

Our GoalTo motivate individuals in

applying God’s principles to:Develop priorities, Give generously,

Get out of debt, Invest wealth carefully,Instruct their children and

grandchildren in the basics of finance,and to Include the Lord’s work

in their Wills and Trusts.

“IamtheLIGHToftheworld”John 8:12

(continued from inside front cover)

3. HOW DOES A BIBLICAL WORLDVIEW GET DILUTED?

Hereisthebigproblem.Non-biblicalworldviewideasbombardusconstantlyfromtelevision,film, music, newspapers, magazines, books and academia.

Because we live in a selfish, fallen world, these ideas seductively appeal to the desires of our flesh, and weoftenendupincorporatingthemintoourpersonalworldview.Sadly,weoftendothiswithoutevenknowing it.

For example, Christians would agree with 1 Thessalonians 4:3 and other Scriptures that command us to avoidsexualimmorality,buthowoftendoChristiansfallintolustorpremaritalandextramaritalsexualsin? Is it simply because they are weak when tempted, or did it begin much earlier, with the seductive lies from our sexualized society?

4. WHY DOES A BIBLICAL WORLDVIEW MATTER?

If we don’t really believe the truth of God and live it, then our witness will be confusing and misleading. Most of us go through life not recognizing that our personal worldviews have been deeply affected by the world. Through the media and other influences, the secularized American view of history, law, politics, science, God and man affects our thinking more than we realize. We then are taken “captive through hollow and deceptive philosophy, which depends on human tradition and the basic principles of this world rather than on Christ” (Colossians 2:8).

However, by diligently learning, applying and trusting God’s truths in every area of our lives — whether it’s watching a movie, communicating with our spouses, raising our children or working at the office — we can begin to develop a deep comprehensive faith that will stand against the unrelenting tide of our culture’s non-biblical ideas.

If we capture and embrace more of God’s worldview and trust it with unwavering faith, then we begin to make the right decisions and form the appropriate responses to questions on abortion, same-sex marriage, cloning and even saving, investing and debt. Because, in the end, it is our decisions and actions that reveal what we really believe. Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind” (Romans 12:2).

Lifeischoices;Choiceshaveconsequences,MaketheRIGHTchoice!

Please remember us in prayer and tell others about our work within the Christian community.

Can we prepare your income taxes next year?

Remember, all profits from our Tax business go back into ministry with the focus on Missions and Christian Education

WearehappytoprovidenamesandcontactinformationforchurchesandPastorsaroundthecountryifinterested.Pleasecallusat(610)385-4500.

God has greatly blessed us here at The LIFE Financial Group, and because of this, we want to give back to

our churches and communities. For many years, we have taught Biblical principles regarding the appropriate use

of money and possessions to our clients. This private training has grown into a nation-wide ministry of

preaching and teaching. Here’s some of the feedback that we have received from Pastors and others working in

Christian colleges around the country:

“IF We OnlY Heard THIs 20 Years agO”

As an educator at a bible university for the past 30 plus years I was challenged to think through my life’s role as a Steward having a responsibility to God, my family and to His church. God

brought Mr. Roy Russell across my path at a critical time of decision. He has been a blessing to my family in ways that I had not considered. He helped me to reevaluate my priorities and set my financial house in order. Thanks to his ministry of teaching and applying the Word my life

has been challenged in a greater way for God’s glory.

“YOU HaVe BIBlICal sTeWardsHIP raIsed TO a neW leVel”

When the word stewardship is used it’s usually in reference to tithing. That isn’t the case with the Stewardship Lifestyle Seminars. Roy Russell and his team of financial advisors have been

trained in God’s Word as it relates to true Stewardship.

While they encourage, they also correct errors found within many families. Sometimes that’s hard to take since they are dealing with such a sensitive topic. But for those seeking to apply godly

wisdom, their life will never be the same. The tools provided to “train up” the children are exceptional! This seminar is extremely beneficial for people of all ages.

“YOUr enCOUrageMenT Was BeYOnd BUdgeTIng and WenT On TO sTrengTHen THe MarrIage and THe FaMIlY”

Mr. Roy Russell and his team of advisers came to our church with the intent to minister to our people demonstrating a commitment to love them by steering them to walk in the truth in re-

gards to financial principles of stewardship. Planning should not come after a collision on an icy road but in preparation to avoid the slick conditions of economic hard times. Thanks to ministry

of The LIFE Financial Group we see God’s people safely navigating through God’s Word and gaining practical wisdom. I especially enjoyed seeing how our families were able to use “The

Four Quarter Method of Stewardship” and “The Surprise Package Company” with their children.

“THere Was sO MUCH UseFUl InFOrMaTIOn and sO lITTle TIMe”

For over three decades Roy and his team have challenged Believers around the country to think outside the proverbial box. He brings Scripture to life and teaches with conviction about priorities. From Sunday school and morning worship through the Tuesday evening workshop

about writing a Christian’s Will the sessions are packed with practical tools and great techniques to manage all of God’s money, not just the tithe. Many wish they could easily extend their time

at the church beyond the three days. There’s so much take in that some have described it as drinking from a fire hydrant.

Stewardship Lifestyle Seminar Workbook

Education

Transcript of Stewardship Lifestyle Seminar Workbook