Studies have continually shown that small businesses create more than 70% of the new jobs in America, and most of these are family run businesses(1). The most powerful drive to succeed is family and family is held together by faith. This is the basic infrastructure that has sustained America’s prosperity and growth. If you think about it, most of the largest corporations in the world started out as family owned small businesses. A portion of what you accumulate is meant to be a blessing to your children. When you receive an inheritance from your parents, you are receiving the fruits of their labors. It represents their time, their passions, their labor and wisdom passed on to you.
An olive tree is a picture of a generational blessing passed on to the next generation. The Psalmist said, “I am like an olive tree flourishing in the house of God; I trust in God’s unfailing love forever and ever.” When a Hebrew farmer planted an olive tree, he would be planting it for his children. If we are to flourish like an olive tree, we need to start thinking in a long-term framework. The leaves of an olive tree were considered to signify abundance. Many times an olive tree lived and produced fruit, for 500 years.
Train your children to be givers. Let them see you be generous with others. Teach them God’s economy. This applies to both your spiritual children and your natural children. To train means teaching them the information, demonstrating for them to observe and see, giving them the chance to do it and coaching them afterwards. Most will learn your financial values and be good stewards of what you pass on to them.
1 Data from the Small Business Administration and the Bureau of Labor Statistics show this is true when talking about the new jobs created in the private sector, which provides the majority of the jobs in the U.S.
The truth is as we calculate our net worth, it might even result in a negative number. This is not a cause for alarm. It is reality. It doesn’t matter as long as we see this as a starting point and believe to increase this number. The issue is not how much you own, it is how you think about what you own. You are a manager of what God has given you. Determine your net worth and make a plan to increase it. In discussing net worth, I want to be clear that financial net worth in no way minimizes the fact that we are all of great worth to the Lord Jesus. We are of worth to him because we are created in his image and he loves us. Understanding our financial net worth will help us fulfill our destiny.
This is a simple matter of listing all of your assets and how much they are currently worth after subtracting what you owe on them. Part of the process is to determine how much equity you have in your house if you own one. To do this you determine the fair market value of your house and subtract the amount you owe on it in a mortgage. You do the same for your furniture, your cars, everything you own. You might have some retirement funds. These are added to the asset side of your net worth. If you have debt, like credit cards, this is subtracted on the liability side. When you add all the assets together and subtract all the liabilities this gives you your net worth. It will take time and some research to complete this calculation. It will be worth it.
Remember, if the net worth you determine is small or even negative this is not a problem because you are changing your thinking. When I first started to calculate my net worth I did it every six months. It was amazing to watch it grow little by little. This was really encouraging because in the midst of a busy life of paying bills, kids in sports, birthdays, buying food and clothes, etc., it really didn’t “feel” like we were getting ahead. But then I would calculate my net worth halfway through the year, and sure enough, it was increasing because of some decisions we made at the beginning of the year.
If you don’t know your net worth be brave and calculate it now. There will be more tips in upcoming posts.
The powerful thing about calculating net worth is that it moves you away from thinking about hourly wages and your next raise and to thinking in terms of assets and liabilities. Do not think in terms of an hourly wage, this is limiting and disappointing. If you are thinking in terms of your next hourly raise, this can only happen at the end of the year or at an annual review. And when it does you will find that generally as wages increase so do your taxes. Hand to mouth living is not God’s will. Think in terms of your net worth. This is essential to prosperity.
We learn from the Bible that a portion of what you accumulate should be a blessing to your children. An inheritance-consciousness helps you think and act prosperously today. It causes you to think of increasing net worth on a long-term basis.
A good man leaves an inheritance for his children’s children, but a sinner’s wealth is stored up for the righteous. Houses and wealth are inherited from parents, but a prudent wife is from the Lord (Proverbs 19:14; 13:22).
…You still the hunger of those you cherish; their sons have plenty, and they store up wealth for their children (Psalm 17:14b).
Do not just live to meet your needs. This is selfish. Why would we live and believe for merely enough to meet our needs, when we have the capacity in God to believe for more, meet the needs of others and pass the balance on to our children?
My friend, a pastor, looked at me with wide eyes as if my skin color was green and I had just walked off a spaceship from Mars. He and I had gone for a brisk morning walk along a beautiful river in rural Canada as we were preparing for a church service. Our conversation had turned to finances and I was sharing with him what I was learning about net worth. He could not understand the concept and had no idea what it meant. I patiently explained to him that calculating net worth is a valuable tool to determine and accumulate wealth.
The first two questions asked of anyone who walks into the bank for any advice or funding are as follows: What do you owe (your liabilities)? How much do you own (your assets)? The bank wants to know your equity, or in simple terms, your net worth. This is a commonly used evaluation tool in the financial world to measure your financial status, however most Christians don’t think in these terms when considering their own financial situation. If this is how bankers and wealthy people measure wealth then maybe we should take a look at it. It states in Proverbs that our house contains great wealth and stores of choice food, so maybe we should learn how to measure it.
The house of the righteous contains great treasure, but the income of the wicked brings them trouble (Proverbs 15:6)
As I dialogued with many Christians I found that very few even understood the concept of net worth. When you hear the term millionaire you are hearing about a person who has a net worth of more than a million dollars. Please understand, I am not saying everyone should be a millionaire, I am only asking you to think like a millionaire. The point here is to change our thinking to a more prosperous manner of thinking. This is why I am challenging you to calculate your net worth. Details to follow…
Hopefully I am convincing you to develop a budget if you do not already have one. The best way to build a budget is to start by writing down everything you spend for a three month period. I mean everything. This will at least give you a window into what categories to set and what a yearly budget could look like. After three months of collecting data, you are ready to take your first stab at setting a budget. Only now instead of just tracking what you are spending, you decide how much you want to spend in a certain area.
Expenses and income must be calculated on a monthly basis. Some bills like your electric bill already come monthly. Others, like maybe your trash collection, might come every three months. Then again your paycheck might come every two weeks. All these transactions are averaged into what they are monthly and this gives you a basis to compare, track past expenses and project how much you want to spend in the future by budgeting. You might be above or below for a certain month; however, your expenses should be evaluated quarterly to see if they are on track.
I will not go into a detailed lesson on budgeting since this will be read in various countries with different currencies and various costs of living. I have included a sample North American budget in A Practical Path to a Prosperous Life in Appendix E. Many financial teachers have done a lot of work in this area and have done a far better job than I do. There are a lot of budget helps available on the internet or by purchasing software that helps you with budgeting. Don’t’ wait…start now. Take dominion over your finances. It will make you more prosperous.
In the last post we were discussing covenants and how they affect our finances. It is important to note that for those of us who are married, the single worst financial decision you could ever make is to break the marriage covenant with your spouse and get a divorce. This is the most important boundary to keep in place. The wisdom of Proverbs backs up this idea when discussing the pitfalls of immorality and the adulteress women. Simply stated, in addition to all the other pain associated with the violation of the marriage covenant, it will lead to financial ruin:
Keep to a path far from her, do not go near the door of her house, lest you give your best strength to others and your years to one who is cruel, lest strangers feast on your wealth and your toil enrich another man’s house (Proverbs 5:8-10).
Your budget should contain money set aside to nurture this most important relationship in your life. This is an investment you cannot afford not to make. In the book The Millionaire Next Door, data shows that most millionaires are married with an average of three children. Family is very important to them. It is a prosperous mindset to keep the agreements you have made and to value your spouse, children and grandchildren.
So spend some money on your spouse today.
A budget helps establish boundaries that you want in place. You have to fulfill the financial commitments you have already made before you start to spend on new commitments. For example you have made an agreement with the electric company when you asked them to provide electricity to your home. If you give money to a homeless person on the street when you can’t pay your electric bill, you are stealing from the electric company and breaking the commitment you made with them. This is stealing and Christians who steal will not prosper. God cannot bless people who steal and break financial commitments they have made. Those unaware of this simple, profound truth will find it difficult to get ahead financially.
If you rent a video when you haven’t paid your house rent, you are stealing from the person from which you rent your house. If you pay your neighbor’s rent when you have not paid your own, you are stealing. Also, in taking responsibility which is not yours, you will interfere with what God is doing in the lives of others. When we try to “save” other people, we often times teach them to be more dependent upon people like us. In fact, often times the recipient ends up resenting us.
To help the poor you can’t be one of them
Boundaries are good! Take care of those inside your boundaries before giving to those outside. God will give you authority only over that for which He has given you responsibility. You have a covenant to provide for your family. You do not have primary responsibility for other children. To help the poor, the best thing you can do is not be one of them. By keeping your commitments, you can bless many children. You cannot save the world when you can’t pay your bills. It doesn’t work that way.
Tithing benefits the person who is doing it. In Winds of Change, Rick Joyner says:
Abraham the father of faith, paid tithes hundreds of years before the Law, which is noted in the New Testament (see Hebrews 7:8-9) because the writer of this book was reminding Christians of this. Under the New Covenant we are a part of the Melchizedek priesthood and Melchizedek received tithes. If this was not more clearly spelled out, it is only because it was so obvious that it did not need to be.2
Alan Vincent, a church planter and trainer from San Antonio, Texas, gives the example of someone who came to him saying, “I can’t afford to tithe and make my house payments.” Alan told him to tithe in faith and if he couldn’t pay his house payment then Alan would cover it for him. The young man started to tithe and he never came back to Alan because he couldn’t make the payment. In fact, Alan observed that he soon received a promotion and a new car.
Jerry Stoltzfoos is an Assembly of God church planter and senior pastor from Gettysburg, Pennsylvania. He has planted multiple churches. He teaches on tithing and actually guarantees that the church will pay back a person’s tithe if they don’t see a significant blessing or turn around in their finances after they start to tithe. He has been saying this for many years and has not paid back any tithes to date.
Simply stated, I am recommending that the number one building block of your personal financial budget should be the ten percent tithe to God. If you get involved in his 10% he will get involved in your 90%.
Gene Strite is a church leader, author and businessman from Chambersburg, Pennsylvania, who takes tithing a step further. When he was a pastor his goal is to teach everyone to tithe ten percent and save ten percent. The saving ten percent will also give people the money they need stored up for financial opportunities that come their way.
Harold Eberle, a former pastor who is now a traveling teacher and author from Yakima, Washington, relates that as a local church pastor he spent four continues weeks teaching every Sunday on the principle of tithing. He instructed everyone to write their current income inside their Bible cover. At the end of four months of tithing, 80% of the congregation saw an increase in their income or some kind of financial breakthrough.
The tithe is a biblical principle found throughout the Bible, and all of your budget should be built around this ten percent. Abraham tithed to Melchizedek before the law was in place, it was included in the law and Jesus affirmed it after he fulfilled the law. Malachi speaks of the tithe:
Will a man rob God? Yet you rob me. But you ask, “How do we rob you?” “In tithes and offerings. You are under a curse-the whole nation of you—because you are robbing me. Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that you will not have room enough for it. I will prevent pests from devouring your crops, and the vines in your fields will not cast their fruit,” says the Lord Almighty. “Then all the nations will call you blessed, for yours will be a delightful land,” says the Lord Almighty (Malachi 3:8-12).
I have tithed all of my Christian life, and I know that it works. The tithe is the first ten percent. Giving starts after you have paid your tithe into the storehouse. I am not looking for an argument or debate. No one is forcing you to tithe. Sometimes Christians think tithing is something they are forced to do by the church. It is not. Tithing benefits the person who is doing it. That works for me.
Cyril Parkinson first wrote “Parkinson’s Law” in 1955 to define the nature of government bureaucracies to expand and never get smaller1. It could be generally stated as the following. “The demand upon a resource tends to expand to match the supply of the resource” or as what is helpful for our discussion about budgeting and sometimes now known as Parkinson’s second law, “expenditures rise to meet income”. Simply stated…as your income rises so will your expenditures naturally rise to distribute that income. We know this is true. Unless a budget is developed to control the spending and provide for savings and investing, the money will disappear. Savings also eliminates the feeling that your finances are out of control and brings a sense of freedom and dominion.
A few years ago I was teaching in a financial seminar. Dave Yarnes, a businessman from Charlotte, South Carolina, was also speaking at this conference on the subject of wealth accumulation. Dave is the owner of multiple businesses and is involved in many projects helping the poor in developing nations. He stated an interesting concept about wealth accumulation. He and his wife decided what standard of living they would live at independent of how their income would increase. He feels this is one reason the Lord has blessed them with considerable resources to extend the kingdom of God. This is another reason to budget and plan how much it costs you to live.
Personally, I want to know how much I gave away last year so that I can continue to challenge myself in giving. I want to know how much I spent on food to feed my family last year so I can plan to feed them this year. I want to know how much I am spending on vehicle maintenance because this helps me decide when it is time to get a new car that takes less maintenance. I want to know how much I am spending on interest each year because interest can sometimes be the biggest killer of giving, savings and investing. A budget helps me do all of this.