Wednesday, July 9, 2014

Dave Ramsey blew it today!

It doesn't happen often. 

Dave Ramsey is the guru of practical financial advice and one of my personal heroes.  He coined my favorite saying: "When you do stupid, you reap desperate."  But since Dave isn't God, he--like the rest of us--is capable of giving uninformed or bad advice.  And he did so on his 7/9/2014 podcast.

A gentleman called into the show who obviously had made a series of horrendous choices that led him to owe $170,000 due to poor business decisions.  He now had a job that didn't pay too much and he was planning on how get out of his predicament.  Of the $170,000 about $16,000 was credit card debt.  He had two whole life insurance policies and they had a cash value of $19,000.  The man was asking Dave whether to cash in the whole life policies to pay off the credit card debt.

Dave asked several insightful questions about the man's financial situation.  It turns out the man was trying to help a company that was insolvent to be profitable again.  The company, however, had owed the man $3000 in expense reimbursements. 

Here are the two things that Dave got right:
  1. He told the man to cut up and cancel his credit cards.  That always sounds drastic when Dave says it, but this man desperately needed this advice.  He has been engineering his way out of one difficulty into the next one for years.  He reminds me of poet-laureate Nipsey Russell who once quipped, "When your Visa bill is too high, and your Diner's Club charge is too large, take a loan on American Express, and pay  it off with your MasterCard."  I'm pretty sure this guy was trying this advice and was in the mess he was in as a result.
  2. He told the guy to stop loaning money to his company (in the form of using his own debit card for expenses and then not getting reimbursed).  This man is a dreamer.  He thinks that he can help a failing company quit failing but using a failing financial technique (borrowing against his own living expenses) to fund activities that his company should be paying.  Maybe the reason the company is failing is because the management team is lousy.  Maybe he should look for a real job with competent management at the helm.  Otherwise, he will -- as Dave Ramsey rightly observed -- be pointing to a debt someday and saying, "Yes, that is the debt I got for that company I used to work for before it went under."
Now Dave, if you're reading this, I know that you are seldom wrong.  And I will continue to be an ardent fan.  But you gave one bit of bad advice because you didn't ask enough questions or be willing to admit that there are solutions that don't fit your cookie-cutter paradigm for finances.

Dave told this man to cash in his whole life polices, pay off the credit cards, and then buy term insurance.

Here's a list of reasons why that is bad advice:
  • By law, all whole life policies are required to lend to the owner of the policy any amount up to the cash value of the policy.  So the man could borrow $19,000 from the policies (at about 5%) and pay off the credit cards.  Doing so would preserve the death benefit for the man's family.  Meanwhile, his cash value will continue to grow inside his policy even when he has a loan against it.
  • Term insurance is only affordable if you get it early in life and buy it at a level premium for 20-30 years.  If this man is approaching 50, his term insurance premium could be as high as $2800 / month.  Chances are pretty good that continuing his whole life policy is cheaper now than paying for term insurance.
  • Term insurance is cheap for a reason -- it is intended only to insure people while they are young when it is statistically improbable that the insured will die.  But think about this guy's situation.  He is in debt up to his ears, living a fast-paced lifestyle involving travel, is a class A personality type, and in stress from his financial situation. He is ripe for a coronary event.  If they guy can't afford term insurance (and I've been pricing it lately for a man my age and it hurts!), then his family could be left with nothing when he dies.  It makes you wonder if Dave will get a call from his impoverished widow someday. The premium will never go up on his whole life policy.  The term life insurance will get prohibitively expensive at age 50.  "When you do stupid, you reap desperate."
Now this man didn't have much cash value in his policy.  So it tells me he bought a bad policy or hasn't had it more than a few months.  A properly designed policy accrues significant cash value from day 1 of the policy using a paid-up additions (PUA) rider.  Since this fellow lacked financial acumen, he probably made the mistake of purchasing his policy from a publicly-traded insurance company.  Those companies do not have the policy-holder's best interest at heart.  They serve their stockholders.  They pay dividends to their stockholders.

Whole life should only be purchased from a mutual company.  A mutual company is owned by the policy-holders rather than the stockholders. They pay dividends to their shareholders.  At some point (usually 6-7 years after the policy starts), the dividends can actually pay the premium for the rest of your life.  So if you fall on financial hard times, the policy can pay its own premiums (which term insurance cannot do).

Still, here is what Dave should have told the man:
  • Destroy your credit cards and close your accounts.
  • Take policy loans on your whole life insurance to pay off the credit card debt and as much other debt as you can.
  • Tell your boss that you can't continue to fund his business.  He needs to reimburse you now.  If he doesn't, then find another job that treats you right.
  • If you're married, quit making financial decisions with which your wife doesn't agree.
  • Get on a budget.
  • Work on the baby steps in order.
  • Continue to pay on your whole life premium until it can become self-funding (from the interest if you have a policy from a public company OR from the interest + dividend if you have a policy from a mutual company).
Dave tends to tout the old A.L. Williams (now Primerica) line:  "Buy term and invest the difference."  Suze Ortman does the same.  If all you are doing is purchasing the death benefit, then go ahead and do that.  "Invest the difference" really doesn't work all that great.  Ramsey tells listeners that they should be able to average 12% in mutual funds. 

That may be possible, but is that really good? 

Look at the following scenario where someone is invested in the market for 4 years:
  1. Year 1 -- They gain 100%
  2. Year 2 -- They lose 50%
  3. Year 3 -- They gain 100%
  4. Year 4 -- The lose 50%
If you average the return rates for the 4 years, you have 100 - 50 + 100 - 50 = 100 / 4 = 25% average rate of return.  Now if I told you that I could guarantee a 25% average rate of return, would you be happy with that?

But look at the actual dollars in this situation if someone had $10,000 invested in the stock market:
  1. Year 1 -- Grows from $10,000 to $20,000 (100% gain)
  2. Year 2 -- Loses from $20,000 to $10,00 (50% loss)
  3. Year 3 -- Grows from $10,000 to $20,000 (100% gain)
  4. Year 4 -- Loses from $20,000 to $10,00 (50% loss)
So while you had a 25% average rate of return, you made ZERO dollars.  Even one bad year in the stock market (remember 2008?) can devastate your account so that it may take decades to recover. So when Dave tells you that you can average a 12% rate of return, don't run out and buy mutual funds until you think it through this example again.  I wouldn't plan my future retirement based on that advice.

Put prejudices on hold and get more information

I can understand why Dave isn't a fan of whole life insurance.  And the typical policies from public companies really are a bad deal.  Biblically speaking, these companies, "server two masters."  But when you purchase a policy from a mutual life insurance company, you can pay premiums for a few years (typically 6-7) and then you have paid-up life insurance for the rest of your life.  You also can borrow against your own money in the policy and at the same time receive dividends and interest every year on that policy.  The interest rate is guaranteed and grows tax-free inside of your policy.  Read some books by R. Nelson Nash on the Infinite Banking concept or sign up for the Infinite 101 course or a webinar from Paradigm Life (which is not an insurance company).  You'll see that there are many life-benefits to becoming your own bank using a properly structured whole life policy (and never having anyone run your credit history again).

Wednesday, September 18, 2013

All I can say is "Amen!"

In commenting about our unbelievable and continually growing debt, Walter Maier said this:

Who knows whether this figure, cruelly fantastic to many of you who would thank God if you had four dollars, represents the breaking point in American financial power? An army of experts, I suppose, will contradict this claim; moreover, we should realize that a nation’s existence is not guaranteed by the amount of its money nor its destruction sealed by financial loss. A country can rebuild, sometimes better and stronger, after complete bankruptcy. The wildest inflation, when people pay hundreds of thousands in paper money for a loaf of bread or a quart of milk, need not mark the utter end of any nation.

Similarly, if we ask ourselves, What is the worst disaster that can overtake our beloved land? we ought to agree that the most devastating danger comes not from without, but from within. Just as a man can recover from ghastly surface wounds, broken or even amputated limbs, while below-the-surface diseases, like cancer or internal injury to the vital organs, prove fatal, so a nation, with its cities, towns, and villages, can regain its peace after the chaos and upheaval of war; it can be restored to health after wide epidemics of influenza or typhus; it can rise victoriously from the ashes of fire, the debris of flood, earthquake, tornado, the ruin of bombs and cannon. Yet history testifies that there is one inner loss which is final, that can remove national glory forever and permanently reduce any country, however rich and powerful. That deadliest danger is unbelief, ingratitude toward God Almighty, the blasphemous ridicule of His Word, the rejection of the Lord Jesus Christ, the denial of the cleansing blood, the contempt for the Gospel, and with this, the carnival of crime, the sweeping rule of sin, the glorification of evil. God’s truth, majestic in its plain, unalterable force, warns, "The nation and kingdom that will not serve Thee shall perish," and every time an empire has collapsed — review this parade of fallen kingdoms: Egypt, Babylonia, Syria, Media, Persia, Greece, Rome, and, above all, Judah — the truth of that warning is fulfilled.

The most vital necessity for America today is, therefore, trust in the Lord Jesus Christ’s power to forgive sins and restore us to God.

All I can say is "Amen."

Friday, April 5, 2013

A poem I wrote came back to haunt me....

I don't wax poetic often.  I once offered my wife this wonderfully-composed poem:

Roses are red
Violets are blue.
Lovers are like noses,
So I pick you.

Needless to say, my wife encouraged me to develop talents other than poetry after that.  
But on at least one plane ride in 2005, I must have felt the urge.  I had forgotten that I wrote this poem.  I found it today in a directory on my mother's hard drive.  Lately, it seems that my life has been one solid bit of rushing between my various responsibilities, schedules, and appointments.  This poem served as a great reminder of what is really important in my life.  

I doubt it will be as memorable as the 4-line poem I composed for my wife on Valentine's Day.  But I hope it will be a blessing to you.  By the way, I once wrote another poem called My Glimpse of Glory which is a term I use for my wife.  You'll notice that term used in the following poem.  Next time you see me, check to see if I'm living for what is most important or not.  Perhaps I'll do the same for you.

Monday, October 15, 2012

I really remind you of him?

Did you ever say something and then realize it didn't sound like what you meant? 

Some of the most precious moments I have as a Dad are when my children are trying to express themselves and have a bit of a verbal faux pas that gives me an excuse to needle them a bit.

So last night I was coming out of a Mexican restaurant where we were celebrating my sister-in-law's 50th birthday.  (Yes, Belinda, now the whole world knows that you've turned 50.)  I was holding the hand of my 7-year-old daughter Christiana.  About a third of the way to the car, she says, "Daddy, do you know what I think of when I hold your hand?"

Always interested in the mind of a 7-year-old (and usually thinking on the same level myself), I said, "What do you think of when you old my hand Christiana?"  Because she is often given to profundity beyond her age, I think I was expecting something theologically or philosophically significant.  So I was particularly stunned by her reply.

"Beauty and the Beast," came her answer.  Well, it was readily apparent to me that she was the beauty in our story so that left only one character choice for me. 

"Christiana, I can't believe you're saying that I'm a beast!"  Instantly she realized her predicament.  It gave me great fun to tease her a bit on the subject.  Her 17-year-old sister Grace quickly understood her comment.  In the Disney cartoon on the subject, there is a scene of the young lady in that story placing her hand in the hand of the beast.  Her hand appeared tiny in the large and powerful hand of the beast.  Christiana thought of how small her hand was inside of my hand.  In essence, she was noting my relative power and size differential to her own.  It was the size rather than any other beastly characteristics I possess (especially since I was shaven at the moment) to which she referred.  But the timing and terseness of her answer made for a memorable moment.

Why write a blog article about that?  Well, it points out something I've been told but was reinforced by another incident this weekend.  To a little girl (up to the age that someone comes to take her away from home), her Daddy is the most important person in the world.  It is a big deal to spend time with him, talk with him, sit by him, sit in his lap, hold his hand, play games with him, laugh with him, and discover the world with him.  Never underestimate the importance of this job.

My own mother lost her father when she was 10 years old.  In the last 50 years, I've never heard her say anything about her Dad that wasn't wonderful.  She remembers his kindness, his generosity, his care.  And yet another relative I saw this weekend remembered a very different man.  He remembered my grandfather as someone who honored his own desires without regard for his family.  He remembered someone who did as he pleased and spent as he pleased but gave little love to his wife and children.  I knew my grandmother had a hard life.  But not having ever known my grandfather, this news was a total surprise to me.  And it made me wonder why my mother only seemed to remember the good about her Dad -- those occasional acts of kindness that characterize all her stories about her father.

Could it be that a little girl -- now a widow of nearly 90 years -- still thinks of her father as one of the most important men in her life?  If Dads are that important, what kind of opportunity do we have to really influence the lives of our daughters (and our sons) by INTENTIONALLY protecting and wooing their hearts?  Hold your little girl's hand today.  And if she says you remind her of the beast, have a good laugh about it.  You'll shape her heart for a lifetime.

Saturday, August 4, 2012

Personal trainers are worth their weight in protein powder....

The most challenging part of getting older is keeping things in balance.  Balancing work / family, balancing enjoyment of life with saving for retirement, etc.  But in the last couple of years I discovered I was having subtle changes in physical balance -- just getting in and out of the tub I wanted sometimes to tip one direction or the other.  With a sedentary job (software engineer), I started having pain in my right leg due to my IT band binding to my muscle by fascia.  I decided it was time to hire a personal trainer.

I need to apologize to all the people I've seen with a personal trainer in the past.  I thought they looked silly doing exercises with balance balls and tension bands.  "Why aren't they doing real exercises?" I thought.  I stand corrected.  My trainer has had me doing some of these inane-looking exercises and I find they can put a real whooping on me.  Why?  Many are designed to restore my balance by strengthening my core.

Here's the benefits I've experienced having a personal trainer now for 3 months:
  1. I've lost 41 lbs.
  2. Because I've had an appointment with a paid professional, it has removed any temptations to make excuses for not going to the gym.
  3. My left leg started with 1.5 lbs. less muscle mass than my right leg (they have devices for measuring this).  This has now corrected and I have equal muscle mass in both legs.  This is due to all the things my trainer -- Matt -- has done to correct my imbalances.
  4. My balance has improved dramatically.  Some of the exercises I couldn't do at the beginning are now no longer challenging.  But every time I master one, Matt comes up with a different exercise to challenge my balance in another way.  He has explained that much of it is training the neuro-muscular connection.  When your balance is challenged in a new way, your brain has to learn new ways to instruct your muscles what to do.  All of this is resulting in a body that will be less likely to fall when I get older.
  5. My strength has made dramatic improvements.
  6. My blood pressure has dropped 20 points -- both systolic and diastolic -- without changing any medications.
  7. My trainer has become my friend.  We have to "catch up" when our schedule has been interrupted a bit.  Also, I've taught him to play racquetball -- the only thing in the club I can do better than him (but he's improving fast).
  8. My posture has improved dramatically.  Sitting in front of a computer all day caused me to have shoulders that were rounded and slumped forward.  This is called "crossover syndrome."  Matt saw that instantly and set about working to strengthen my rhomboids, lats, and rear deltoids.  I now walk much more upright and don't have to work to hold my shoulders back.  It makes me look years younger and makes it less likely that I will be one of those poor elderly people who are permanently hunched over.
  9. My self-image has improved as I can still give guys 30 years younger a good workout on the racquetball court.
  10. I have more control over my diet.  Having put this much effort into getting better, I am far more conscious about making wise choices.  I also bought a BodyMedia Link device for measuring calorie expenditure.  I compare this to my Sparkpeople dietary data and can tell you exactly what my calorie deficit or expenditure is during the day.  When I hit a plateau, I showed this to my trainer who suggested a 1-day "refeed" to trick my body into thinking the "famine" had ended.  So I ate 1.5 times the required number of maintenance calories on 1 day.  It worked.  I temporarily gained 1/2 a pound but then lost 7 lbs. over the next 4 days.  A good trainer understands the dynamics of weight loss and what to do when you hit a plateau.
  11. My cardiovascular condition has improved dramatically.  I feel like I'm 20 years younger after 4 months of training.  Workouts that would have killed me 3 months ago now are just a bit challenging.  It feels great to be in shape and see my blood pressure so low each day.
Costs on trainers vary a great deal.  They aren't cheap at my club.  So we may not continue this indefinitely.  I believe I now have the resolve to continue exercising on my own.  But I still have another 50 lbs. to lose and want to get to where I can do dumbbell chest presses with 100 lbs. in each hand (currently at 55).  And Matt says I still have a long ways to go to correct other problems that come from 30 years of neglecting my health. 

Matt is my chief cheerleader.  I text him when I reach a new weight low or accomplish a new physical feat.  He lets me know when he has free time for racquetball.  Since he goes to my church, he watches what I eat each Sunday at our fellowship meal after the morning service.  I've seen some personal trainers that just look like they're doing a job and aren't all that glad to be doing it.  But Matt is passionate about seeing his clients make progress.  He is constantly encouraging and cheers me through the last 2 or 3 reps of a weight lifting that seems impossible.  He gently "pushes" me beyond my perceived limits but is sensitive to what my real limits are.  And sometimes he holds me back if exercising one part of my body too much would be detrimental to achieving balance with another part of my body.  I sometimes want to push too hard to the next step and he will let me know when I'm not really ready for it.

So if you haven't considered a personal trainer, let me encourage you to find a good one.  He or she should be encouraging, enthusiastic, passionate about your progress, have the ability to be firm but not nasty, and become your cheerleader and friend.  Make sure to get one that is certified by a nationally recognized accrediting body.  A good trainer knows how to instruct you to use the right form.  Matt is always after me about keeping my chin up and shoulders back.  He stops me if I'm doing an exercise wrong.  The right form is more important than an impressive weight.  The right form will keep you from injury.

If you find that person, you'll discover that it probably costs a lot more to NOT have a personal trainer than to have one.  It has been the best investment I've made in my health and in feeling great every day.  I wish I'd done it years ago.  Like everything else, you can price shop.  I know a club nearby where I can get less expensive training.  But I've found the right trainer with the right qualities and I'm sticking with him.  I can't wait to see where I am a year from now!

Belated Father's Day reflections

My Father's Day weekend was awesome.  On Saturday, I started by playing my nephew racquetball for one and a half hours.  Then we lifted weights for an hour – after which I was thoroughly exhausted.  Matt is a first-class guy and I am proud to have them as both my nephew and my personal trainer.  Saturday marked the first time in his three weeks of racquetball experience that he was able to beat me at the game.  Because he is in the best of shape, I knew my racquetball victories would soon come to an end.  I have never seen anyone learn the game more quickly, and therefore I was not surprised to lose to him after only three weeks of play.  In terms of a racquetball handicap, I am a week C level player but hope to get better.  Matt started as my racquetball student, but he will now be giving me instruction.  After a tiring racquetball game and weightlifting workout, Matt warned me that my arms may not hold a shotgun as steadily as they normally would.

I returned home and took my two sons, Richard and Arthur, to the gun range for trapshooting.  We shot four rounds of trap.  Matt's predictions turned out to be true.  Richard handily won every round.  And Arthur, my ten-year-old, even tied me on one round.  Once again I found myself being trounced by young men that I had taught to shoot.

Then on Sunday morning, I had the opportunity to hear my son Richard teach Sunday school at our church.  For the last year he has been teaching a series on the Divided Kingdom -- the history of the nations of Israel and Judah.  God has given him unique insights with profound practical applications.  Richard does not have a seminary degree.  And while it would be wonderful for him to have a greater knowledge of Hebrew and Greek, he really does not need a seminary degree to be an effective teacher or pastor.  God has given him all the gifts he needs.  Richard has had keen insights that I have never seen in Scripture.  I remember teaching him the basics of preaching and often hear him teaching concepts that I taught him he was still young boy.  Now he is a man with his own family – a wife and daughter – and has a successful information technology career of his own.  In many ways, he has already surpassed my accomplishments.  I often find myself being the student with Richard teaching me things that I did not know.

Fortunately for me, there are still young children at home that have much to learn that I can teach them.  And I hope that I will have the opportunity to teach character and my life lessons to my grandchildren as well.  But I realized on this Father's Day that I have reached something of an apex in my life.  Those whom God entrusted me to teach are now teaching me and others.  I see others having developed superior skill in the things in which I encouraged them.  Up until now, I regarded middle-age as the time when your broad mind and your narrow waist exchanged places.  I realize now, however, that it is also a period of time in which you gradually release control and authority and watch others as they bloom and grow and prosper in their own lives.  I have always said that my job as a father was to raise children who would be better Christians than I am.  I have always hoped that my children would exceed the skills, the accomplishments, and the sphere of influence that I had during my lifetime.  From all that I see, I am now seeing the realization of that goal.

I really cannot take credit for anything that has happened.  Nevertheless, I thank God that He has allowed me to be a part of the lives not only of my own children, but several other young people as well.  I am an imperfect messenger with countless flaws and character deficiencies of my own.  Only by the grace of God can I now see greater hope for effective godliness in the next generation of family and friends.

I gave some thought this weekend to what I would do differently if I could do it all over again.  Here is my short list:
  • I would not sell my 1969 fastback Mustang with the Cleveland 351 racing engine, the Cragar mag wheels, the Hurst transmission, and the 850 Holly-4 barrel carburetor. I do not know that keeping the car would have had any profound effect on my life, but I really did like that car.
  •  I would have been more faithful and diligent in Scripture memory.  Few things have benefited my life so much as the Scriptures that I memorized as a young man and even during my parenting years.  Joshua 1:8 promises success to those who diligently meditate upon Scripture.
  • I would have spent less time in entertainment and more time in prayer.
  • As a young man, I would have spent less time striving to achieve success.  Instead I would have focused on those things that are eternally significant.  By striving for fulfillment instead of success, I have no doubt that I might have achieved both.
  • I would have begun each day by reading a written reminder to choose to respond people in a kind, patient, and gracious way.  In so doing, I could have avoided using so many verbal 2x4s to solve problems.
  • My wife and I would not have tried to prevent pregnancy during the first 3 to 4 years of our marriage.  After stopping birth control, it took several years before God blessed us with a child.  I often wonder whether we missed other blessings.  The eight children born to our marriage have blessed us beyond our ability to describe.  They motivate and encourage us to be better people.  They bless not only our lives, but also the lives of others.  Children take a lot of energy.  For that reason, it is better to grow up with your children rather than to wait until you are older to have them.  You do need, however, to make glorifying Christ the goal for your family.  That focus is essential to raising children who will be a blessing rather than a curse.
I received wonderful gifts of written encouragement from several of my children this Father's Day.  God gives us all together too short a time to love, nurture, and train children before they grow up to surpass us and have families of their own.  If you are a father, may I encourage you to make the most of every moment with your family?  I can promise you that in your old age you will not wish that you had spent more hours of work, more hours watching television, or more hours surfing the Internet.  However, you may well wish that you had spent more hours investing your life in the lives of others to produce a lasting and living legacy.  I only pray that I will have the wisdom to make the most of the time I have left with my children and grandchildren – who are such an incredible blessing to me.

Thursday, February 9, 2012

The light in the tunnel is a train...

I've spoken several times on preparing for the coming economic collapse.  A few people have taken me seriously and are making preparations.  Most simply live as though life will go on as it always has.  Porter Stansberry has done a good job of succinctly summarizing why an economic collapse in the United States is imminent and inevitable.  When I say "imminent," history shows that when a Republic (like Germany) prints money to pay off its own debts, the natural result of inflation does have some lag time.  Our government just borrowed another trillion dollars in the end of January.  The debt ceiling went up without even a notice in the evening news.  We now owe over $16 trillion (not $15 trillion as in the quote that follows).  And in March we will borrow again to pay $1.7 trillion in short term T-bills that are coming due.  Inflation is happening, but we are in the "lag time."  In Germany it took 18-22 months after serious government printing before normal inflation turned into hyperinflation.  So it is inevitable, but you still have time to prepare.  You still have time to buy precious metals, invest in contrarian stocks, store food, and teach your family that loving one another is more important than material possessions.  So what will you do.  Porter Stansberry gives permission to pass on these comments, and I'm happy to do so.  (He is a competent analyst and always worth reading.)

What follows is a review of what I think are the most critical facts in our country's looming currency crisis. Most people still don't understand the risks we face as a nation because of our feckless leaders and their reckless ignorance of basic economics.
What follows are facts. Nothing in this essay will be conjecture or opinion. I will make no forecast – at least not in this essay. So please, stop the political name-calling... and grow up. The problems we face are ours. All of ours. It doesn't matter how we got here. It only matters that we begin to deal with these issues – soon. If we don't begin to solve these core financial problems, they will certainly destroy our country.
 Today, our national federal debt far exceeds $15 trillion. This alone is not a serious problem. The interest we pay on these debts is small – thanks to the trust of our creditors, who, for the moment, continue to believe America is a safe bet.
So... what's the problem? The main problem is the amount of debt we owe continues to increase at a faster and faster paceThis is exceptionally dangerous for two simple reasons. First, there's simple math. When numbers compound, the result is geometric expansion. And that's happening right now with our national debt because we continue to borrow money to pay the interest. And we have done so for about 40 years. Think about it this way: How big would your debts be today if you'd been using credit cards to pay your mortgage for the last several decades?
 Even worse, our debts are compounding at an accelerating pace because we lack the political ability to limit the federal government's spending. Please understand... I'm not pointing the finger at any politician or either political party. I'm simply pointing out a fact: This year's $3.6 trillion federal budget is 20% larger than the entire 2008 budget. And while our government has grown at a record pace, our economy hasn't. It has hardly grown at all. Thus, this will be the fourth year in a row we set a record for deficit spending. Never before in peacetime has our government borrowed this much money. And now, it's borrowing record amounts every year.
 This combination of borrowing record amounts of money (during peacetime) and continuing to borrow the money we need to pay the interest is setting the stage for amassive increase in total federal debt levels. Why is this happening? Don't our leaders realize they can't continue on this path?
 Well... the problem isn't so simple to fix. What we face isn't a $15 trillion problem. It's actually much, much bigger...
 The $15.3 trillion we owe today is really only a minor down payment on promises the federal government made to its most important creditors – the American people. Not yet included in our debt totals are the $15 trillion shortfall in Social Security (thanks to the Democrats), the $20 trillion unfunded prescription drug benefit (thanks to the Republicans), or the $115 trillion unfunded Medicare liability (thanks to the Democrats and Republicans).
 Most people ignore these looming liabilities because they obviously will never be paid. In fact, the federal government's total obligations today – including all future obligations – is more than $1 million per taxpayer. And that's if you assume all 112 million taxpayers really count. (They don't. Only about 50 million people in the U.S. pay any substantial amount of federal income taxes.)
But here's the funny part... While everyone seems ready to ignore these obligations, we've already begun to pay them. Our spending on Medicare and Social Security already greatly exceeds the $800 billion in payroll taxes we're collecting to pay these benefits. (Total spending on Social Security and Medicare last year was more than $1.5 trillion.) And that means our actual debts will continue to compound faster and faster every year, assuming nothing is done to curtail these benefits.
 I want to make sure you understand this fact: It doesn't matter how much (or how little) Congress chooses to cut its discretionary budget. The promises we've already made to Americans in the form of Social Security and Medicare guarantee that our debts will continue to compound faster and faster, every year. How do I know?
 Once again... let's return to basic math. Right now, we're spending (at the federal level) $2.4 trillion per year on transfer payments and interest on our national debt. That doesn't include any of the other functions of the government – nothing else. Meanwhile, we are only collecting $2.3 trillion a year in income, payroll, and corporate taxes.
Let me make sure you understand this: Even if we cut every other government program – including the entire military budget  the federal revenue collected still wouldn't be enough to merely cover the costs of our direct transfer payments. Not even close. And every year, these payments will automatically grow.
 Here's another way to look at the same basic numbers, but on a macro scale. Right now, total government spending in the U.S. equals $7 trillion per year. (That's federal, state, and local.) Total interest paid in the U.S. economy on all debts, public and private, equals $3.7 trillion. The size of our total economy is only $15 trillion. Thus, we are currently spending $10 trillion (out of $15 trillion) on our government and debt. This is unprecedented in all of American history. This financial structure is unsustainable – and extremely unstable, given our debt levels.
 There's the bigger problem (yes, it gets worse). The political solution to our soaring deficits will most likely be higher taxes. Yes, technically that's a prediction... And I promised no predictions in this piece. But let's face it. You will never see the federal government make dramatic, meaningful cuts to its promised benefits – not when half the country pays no federal taxes and more than 40 million people are on food stamps. So it's not really a prediction – it's a political reality. Will higher taxes save us?
 No. You cannot squeeze blood from a stone. The federal debt isn't the largest obligation we suffer under. Americans hold nearly $1 trillion in credit card debt. We hold nearly $1 trillion in student loans. Total personal debt in America is larger ($15.9 trillion) than all of the federal debt. In total – adding up all of our debts, public and private – Americans owe close to $700,000 per family. It is not possible to finance our federal government's spending via taxes because the American people are broke. Total debt levels in America are the highest – by far – of any developed nation.
 Tax the rich, you say. Well, of course. But marginal rates in many places are already greater than 50%. Tax rates this high don't work… They actually reduce tax revenues as people move their economic activities elsewhere to avoid taxes… or even simply forgo working.
Don't forget, the very wealthy can simply leave. James Cameron – director of blockbuster movies Titanic and Avatar – recently did just that, buying a 2,500-acre farm in Canada. John Malone, chairman of Liberty Media, likewise told the Wall Street Journal that he bought a farm on the Canadian border specifically so that he could leave the country whenever he wanted. "We own 18 miles on the border, so we can cross. Anytime we want to, we can get away."
Think I'm exaggerating the risks of real capital flight from the U.S.? Well... let's look at the facts. According to the latest IRS report, the number of Americans renouncing their U.S. citizenship has increased ninefold since 2008.
 How then will the government's spending be financed? Well, I promised no predictions. Not today. But I will remind you that since 2008, the Federal Reserve has expanded the monetary base from roughly $800 billion to nearly $3 trillion. That, again, is a fact. Feel free to draw your own conclusions about what the Federal Reserve is likely to do in the future if the U.S. Treasury is faced with a financial need that can't be met.
 You may do whatever you'd like with today's Digest. Feel free to pass it around to your friends – or anyone else who may be interested in these ideas. Be prepared for lots of nonsense about making the rich pay their "fair share" and pie-in-the-sky projections about how the entitlement system could easily be reformed.

Thursday, October 27, 2011

Does it matter if a presidential candidate is a Mormon?

Ok, I don't like to discuss political issues as a rule, but the media's rhetoric and Joel Osteen's obvious confusion on Mormonism are driving me insane.  So here's my unasked-for opinion on the subject.  It will be at least worth what you paid for it.

Let me start by stating the patently obvious:
  • I'd vote for a crumpled-up Coke can before I'd vote for Obama.  He has done more during his shot tenure to destroy this nation than all his predecessors put together.  He has a blatant and stated disregard for the Constitution, couldn't even take his presidential oath correctly on the first try, and has refused to enforce laws passed by Congress while enforcing illegal regulations created by his bureaucracy. 
  • I don't think the Republicans need another fiscal and social liberal and every indication in Romney's past shows he is exactly that.  In fact, he came up with Obamacare before Obama did.  Once upon a time I used to send a small donation to the Republican party each election.  I quit doing that when the best the Republican party could come up with was John McCain.  Had they come up with a more conservative candidate (like Bob McKewen -- even if he was on a ticket with Mike Huckabee), then they might still be getting a check from me.  So Republican National Committee -- if you're listening and are willing to admit you have more influence in who becomes our candidate than you are presently willing to admit -- then give us a true fiscal and social conservative.  (Most people say Ron Paul is whacked out on foreign policy.  I'm not smart enough to make that determination, but it is clear he understands fiscal policy and the monetary supply better than the other candidates.)
  • I haven't made up my mind who I will vote for in the primaries.  Herman Cain at least has a plan.  Ron Paul probably doesn't have a chance but he makes sense.  I've met Governor Perry and I believe him to be changing and growing as a sincere Christian.  But I do have trouble getting over the fact that before he was a Republican, he supported Al Gore.  And I also don't like the fact he looks so much better in a suit than I do....  {Attention:  Mike Hucakbee and Bob McKewen -- where are you?  Bob, you are the clearest communicator in the Republican party since Reagan.  Why can't we have someone like you?}
Having said that, let's turn our issue to the question of Romney's Mormonism.  Does it matter?

Are Mormons Christians?

First of all, there seems to be confusion as to whether Mormons are Christians.  So let's settle that.

The four anchors of the Christian faith are these:
  • Jesus is God-incarnate, born of a virgin.
  • Jesus lived a sinless life.
  • Jesus died a substitutionary death whereby His death pays the penalty for the sins of those who receive Him as Savior.  Salvation cannot be earned -- only accepted and received.
  • Jesus did not remain in the grave but rose again the third day.
Mormonism fails at least two of the anchor tests.  Mormons believe that Jesus is an incarnate angel, not incarnate God.  Mormons believe that you must work (keeping the "word of wisdom" -- not drinking alcohol, tea, or coffee is one part of this), serve the Mormon church, and undergo certain ceremonies (complete with secret handshakes) in order to eventually progress to become your own god.  Brigham Young articulated this with, "As man is, God once was.  As God is, man will become."  Christianity does not believe that men are or will become gods.  Christianity does not believe that men are or will become angels.  God alone is God.  God alone will be God.  Angels are beings created by God.  But they cannot experience salvation.  They are sent to minister to men.

Is Mormonism a cult?

People aren't sure what a cult is.  The occult is that which is associated with witchcraft, Satanism, necromancy, ghosts, ghouls, demons (kind of what people celebrate Halloween about).  A cult, however, is something that associates itself with Christianity in name but departs from the major Christian tenets.  There are four tests for a cult
  1. Mormons ADD to the Word of God.  Mormons add 5 books of their own to Scripture and say that these 5 books are all superior to the Bible.
  2. Mormons SUBTRACT from the deity of Christ.  In spite of Romney's assertion that he believes Jesus is the Son of God, Mormons do not believe this.  Mormon doctrine teaches that Jesus is an incarnate angel -- not God.
  3. Mormons MULTIPLY salvation requirements.  Salvation comes by confessing our sins, admitting our need of a Savior, asking Christ to forgive us of our sins and be our Lord and Savior.  That simple.  Mormons want to add rituals and rule-keeping so that one day they can become gods just like God and go out in the vast cosmos somewhere and run their own planet.  (They also believe that babies are born whenever God has sex with some member of his celestial harem.)
  4. Mormons DIVIDE the body of Christ.  Several years ago the Mormon church sent a large number of their "evangelists" to the Dallas / Fort Worth area.  These are the guys riding bikes with "Elder" so-and-so on their name tag wearing dark pants and a white shirt.  They are highly trained to control the conversation.  Their target?  Baptists.  They targeted Baptists to convert and bragged later that they converted enough Baptists in DFW each day to fill one average Baptist church.  They made a deliberate effort to divide the body of Christ rather than seeking out lost souls who have never heard of Jesus.
So Mormons deny the tenets of biblical Christianity but meet the tests for a cult.  (You can find more of what they believe by clicking here.)  Given those facts, Mormons may associate with Christians, but they are not Christians.  They have their own unique religion and need to be honest about this.

So does it matter that Romney is a Mormon?

Frankly, I wish every man or woman that will ever occupy the oval office would love God and choose to obey Him and to seek His wisdom.  That has not always been the case nor will it be.  Obama claims to be a Christian but has also admitted to being a Muslim on one occasion.  He courts Christians but seems to follow many of the tenets of Islam.  Only history can decide what Obama really was. 

And people can always change while in office.  They can have a conversion experience while President. 

We have been taught that we live in a secular society and that politics and faith should not mix.  However our founding fathers started 54 Bible societies.  And Thomas Jefferson -- pointed to as a deist who helped to establish the separation of church and state (a misinterpretation of his answer to a specific question) -- used to teach Sunday school in the U.S. Capitol building.  One of the first appropriations of Congress was to print Bibles.  The Capitol Rotunda has paintings -- one of which includes a Christian baptism.  Faith and politics were intended from the start to work together.  However, the State (Federal government) was not to establish a particular denomination as the official church.

Romney certainly has the right to run for President.  We should defend his right to do so.

However, I have the right to not vote for him.  And my choice could be based on religious reasons.  Here's a few things about Mormonism that concern me:
  • Mormons teach that if they live a good enough life, they can one day become gods and rule planets of their own.  I've had a number of Mormon friends through the years, but they all suffered from arrogance.  I guess believing you'll rule your own planet some day makes you a bit hard to live with here on Earth.  A good President needs humility -- not arrogance. (We are seeing the latter now.)
  • Mormons don't subject their faith to any kind of logical scrutiny.  They just take it all on faith.  Some examples:
    • The Book of Mormon contains the book of Ether. This book describes the exodus of a group from the valley of Nimrod. These people left because they did not agree with the construction of the Tower of Babel. They made ships out of large trees and put holes in the top and bottom of the vessel (the hole in the bottom of the vessel was to let air into the boat in the event it turned upside-down -- a design which any shipmaker can tell you is doomed to instant failure).   This book also says God told them not to put glass in the side of the boats or it would break.  But glass wasn't invented until the 14th century B.C. by the Phoenicians.
    • Until 1958, the Mormon church taught there were a race of 9-foot-tall people who lived on the moon and dressed like Quakers.
    • The Mormon church denies polygamy but it is still taught in their Doctrine and Covenants. 
    • Mormons believe Joseph Smith translated Reformed Egyptian tablets (a language for which there is no evidence) by using the Urim and Thummim from the priestly ephod of Aaron which he had found.  But his wife later testified that Joseph Smith spoke the words of the Book of Mormon while looking through a single "peep stone" he often carried.
Since I did much of my graduate work looking at Mormons and their doctrine, I could give you many more examples.  But let me just sum it up this way.  If a man is a member of a cult that believed until 1958 that 9-foot-tall beings lived on the moon and dressed like Quakers, do you think that he possibly lacks judgment or discernment?  If Romney hasn't used good discernment in this area of his life, what will HE do when he hears rumors of weapons of mass destruction?  What will he do when the U.S. is threatened militarily. 

Just about anyone is going to be a better President than Obama (whose constitutional qualifications are still in doubt).  But I want a President who shows evidence of wisdom and discernment.  I would also like it if this man were a man of faith who knows what it means to be redeemed by Jesus Christ.  I want a man who will be both a fiscal and social conservative.  In my opinion, Romney fails one or more of these tests.  I support his right to run for President.  But I'm not enthused about him being my alternative choice to Obama.

As I said, I do not yet know for whom I will vote in the primaries.  But I am praying that God will raise up at least one person of real integrity for the election for whom I can vote.  I hope you are doing the same.

Monday, October 3, 2011

Should you take your kids to see a movie?

As a rule, I do not frequent the theaters.  However, once in a great while there is an exceptional movie worth seeing and worth paying theater prices in order to support the movie producer so that they will make more great films.

Recently, two such movies have made their debut in the theater.  The first is entitled "Seven Days in Utopia."  The writer/producer is Dr. David Cook – who has a long history of publishing Christian education materials.  This rather unique movie begins with a recently-turned-pro golfer who is doing well at his first official tournament when he blows it on the last hole in a totally humiliating fashion.  In anger, he drives off and has a car accident which leaves him stranded in a small community called Utopia while awaiting his car to be repaired.  Here he meets an older golfer who also had once played the pro circuits and from whom he learns important golf lessons and even more important lessons for life.  The movie is very engaging and will easily captivate you – even if you are not a golfer.  Unfortunately, there is at least one profanity clearly heard in the movie and there might be others said under the breath but they are not truly noticeable.  Still, it all works together to give a breath of realism to the environment of the movie.  The most remarkable thing about this movie is the ingenuity of its ending.  At the end of the movie, you are left with one nagging question which requires you to visit a particular website in order to find out what happened just after the screen went black.  When I returned home from the movie, I visited the website which instantly answered my curiosity but also delivered another important life lesson.  There was an opportunity to click a link to allow me to interact with that life lesson by taking action on what I have learned.  Clicking that link took you to a page with a very clear and succinct presentation of the Gospel.  This was ingenious.  I would highly recommend taking your friends who may not know Christ to see this movie and then encourage them to do the follow-up to see how the movie ended.  This is a highly creative way to share the gospel in a relevant fashion.  Not many theaters will carry this movie, but find one that does not go see it.

The best movie of 2011 – and perhaps of the century – is the movie Courageous.  Sherwood Pictures has superseded its previous three films – Flywheel, Facing the Giants, and FireproofFlywheel revolved around the lines of used car salesmen and what happened when the owner of the business decided to run his business by God's principles.  Facing the Giants focused on the life of a coach and his football team and what happened when they committed their ways to Christ.  Fireproof showed the restoration of a seemingly impossible marriage in the life of a fire captain.  With Courageous, we see God working in the lines of five men – four of whom are Sheriff deputies.  It is rated PG-13 for its scenes of action and violence.  However, there is not a single word of profanity in this movie.  For those concerned about the style of music, there is no dominant rock beat in any of the music until after the closing credits begin to roll.  This movie should be mandatory for every man to see.  It highlights the duties we have as dads to disciple our own children.  But it also highlights the duties we have the mentor those who were not our children but who have need of a father to speak truth into their lives.

Many are not aware of the significant of definite articles in Malachi 4:6 – "And he shall turn the heart of the fathers to the children, and the heart of the children to their fathers, lest I come and smite the earth with a curse."  God says that his profit will come to turn the heart of fathers to THE children and to turn the hearts of the children to THEIR fathers.  When a young person comes to you for counsel,you should always seek to honor their father and to turn their heart toward their father whenever possible.  The heart of children should be turned toward their own dads.  However, God expects me as a man to not only love my own children, but to love all children.  Therefore, he says that his profit will turn the hearts of fathers to THE CHILDREN.  God does not want us to only love her own children but also the children but do not really have a dad.  Do you take time to mentor children whose father is absent – whether through divorce or death?  You should.   God expects it of you.

I would also encourage anyone who has sons who were not saved to take their sons to see Courageous.  It will give them an opportunity to see the reality of men living Christian lives fleshed out in front of their faces.  I believe this will ultimately result in them being more willing to receive Christ.  Unfortunately, in our day and time, many young people regard Christianity as a woman's religion – often because the only real Christian they know well is their mother.  Give your sons an opportunity to see men trying to live out their faith in a real and practical way.

Now Christian parents have a real challenge when taking their children to see a really great faith-based movie.  The movie can be perfect, but you have to endure the previews.  When I took my family to see the movie Courageous in the Premier 14 theater in Burleson, Texas, the vast majority of previews were family friendly.  Still, my wife had the children look at the floor and keep their ears closed until the previews had concluded.  She did this, because she knows that you never know what to expect from the movie previews that precede the feature film.  Still, we are thankful for that theater in Burleson Texas for being sensitive to run family friendly previews prior to the movie.
The following evening, however, I saw the Courageous movie again at the Cinemark theater in Mansfield Texas.  This theater totally lacks sensitivity to the nature of their audience.  They showed previews with mature themes, one movie with an open mockery of Christianity starring Dolly Parton, and several movies with an occult or Satanic theme.  This theater will likely be losing my business in the future.

So what can you do as a parent? Let me make a suggestion based on our own experience with eight children.  You have several alternatives:
  • Wait for the movie to become available on DVD – and then you do not have to suffer through the previews.  Pros: you save money over the cost of going to the theater and you get to miss the conflict in previews.  Cons: you miss the opportunity to support a Christian filmmaker at the theater (where your attendance is essentially a vote for the theater to show similar future films).  You also typically have to wait longer to see the film this way.
  • Get one or two of the most mature family members to reserve the seats in the movie auditorium. When the undesirable previews are over, Cindy text message (or call) to the other parent or older child who are waiting with the younger children in the hall to let them know it is now time for them to come in.  They will still have an opportunity to get into the auditorium before the movie actually begins, but avoid seeing or hearing the previews.
  • Train your children to keep their eyes closed in the years close during the playing of the  previews.  This is probably the least effective alternative since some sounds will no doubt reach your child's ears.
The middle option is the one my wife and I have chosen to employ on several occasions. My wife and I can sit in the auditorium until the previews are complete and then we can notify my oldest at-home daughter to bring in the rest of the children to take their seats.then we can immediately turn off all of our cell phones so as not to disturb others during the movie.  This allows us to support a Christian filmmaker at the box office, see the movie on the big screen, and still derive the important spiritual lessons from a truly great movie like Courageous.

Courageous will have you laughing until you cry, and then crying until you can laugh again.  It touches upon a plethora of human emotions and grabs every man's heart from the opening scene.  This is a must-see movie that every man and every boy over the age of 10 should see. And this movie has what may be the most succinct and clear presentation of the Gospel that has ever been filmed.  If you know a boy or a man without Christ, take them to see this movie today.  If you know a boy or man who claims to be a Christian but is not living that life to the fullest, by then movie tickets for this film today.  I cannot stress strongly enough how important this film could be to your life and the life of those you love.

Tuesday, September 6, 2011

Friday, September 2, 2011

Poor man's way to buy gold

Dads, it is your job to provide for and protect your family financially.  I've been encouraging friends and family to buy precious metals -- particularly silver -- for the last year.  It is my conviction that our dollar is in serious decline and inflation will be double-digit within just a few months.  To preserve purchasing value, you need to get out of currency (paper) and into money (gold, silver, or other things with intrinsic value).

Now I like for purchasing silver.  Prices are better than other places and shipment is quick.  But it is pretty hard for me to shell out money for gold -- it rose $45 last night to $1875/oz. as of this morning.  Long term, I believe silver will increase by the greatest percentage.  But in the short term, gold is the clear winner.  So if you want to get in on gold gains but don't have a bunch of currency laying around to buy several gold coins, what do you do?

Well, folks at SilverSaver have solved this problem.  You can set up an automatic bank draft to make a regular savings deposit to SilverSaver.  You then specify whether you want them to maintain your deposits in silver or gold.  When you make a deposit, it is converted into holdings of silver and gold within their vault.  You earn whatever your chosen metal earns.  So if you only deposited enough to own 1/10th of a gold coin ($187.50) and gold goes up $45 overnight, then you made $4.50 overnight (which is a LOT better than your savings account will do).  Of course you will also experience downward fluctuations.  But if you look at a graph of gold over the last year, you will wish you had known about these folks sooner.  I'm now a customer.  I hope this may be of help to you as well.  At the very least, this account should allow you to preserve your purchasing power instead of losing it.

Tuesday, August 30, 2011

Economic bubble popping!

Gold is about to zoom.  Better start buying now if you haven't already. (Silver will do at least as well and is more affordable.)  Here's why you need to buy now:
  1. With the stock market going down (part of an inevitable cyclical swing), people are looking for a safe place to put their money.  That typically leaves 2 alternatives:  US Treasury certificates and precious metals.  
  2. Thanks to Bernanke, US Treasury certificates are now paying about 2.19% for a 10-year note.  The only other time it has been that low was in the worst part of the Great Depression.  (What's THAT tell you?)   If you buy a treasury certificate (which some stupid people are), then you are getting 2.19% to lock in your money for 10 years in that certificate.  Anyone who would do that is a certifiable idiot.  
  3. Assuming there is still intelligent life on the planet, they all have to go buy gold and silver if they don't want to lose their money.  This is really starting to hit people.  Soon it won't matter what the government tries to do; gold and silver will rise no matter what.  We're reaching critical mass.
Here's the chart of 10-year treasury certificate yields.  Don't wait.  Invest in precious metals now so you can preserve the purchasing power of your family.  And if you want to know what rich people (more than $10 million in cash) are doing with their money right now, then you need to watch this video.  I did, and it has made a real difference in our preparedness.