Financial advice for Christians in 2011

Many were bullish at early signs of recovery in 2010 … but these may only be a reflection of weaker prior years and conservative projections.  It is still to be seen if 2011 will see these jumps in incomes sustained …more likely there will be a flattening for the most cases. There will be a few winners.

The outlook is positive though fears of a future dip again into recession still persist and though companies are richer than in prior years – they will not be spending as generously as they used to.  The best tips for success could be as follows:

  1. Know/perfect what you are good at and remain in your area of strength – find where you excel/add value to others (where you can differentiate your product offering) and have developed cost advantages and continue to compete based on a lower cost excellent value strategy … moderation will remain the king of values in 2011. Frills will not sell.
  2. Stock prices are coming up … but these are yet to be proven as sustainable jumps.  Look beyond the numbers to understand why prices are coming up.  Well run companies with nimble structures that understand how to flex their costs to adjust to seasons are probably going to be winners.  Spot and stick to the winners and invest prudently.  Use simple investment plans you understand with a low-risk grow-rich-slowly vision.
  3. Many still project that real estate prices will still go further down before they rebound again. If you have spare cash you will not need in the medium term…it may be a good time to get an excellent deal on Real estate but be careful and get professional help.  Do not borrow to purchase real-estate …though banks will be more generous to target good credit customers.
  4. Online web-based creativity will continue to be rewarded although more charlatans will flock to this arena. Increase in expendable income will push a lot of expenditure into this space.  This is a no-brainer…web-based services are cheap and positioned for the mass-market with little barriers to entry and almost limitless reach even as infrastructure for the internet continues to improve globally.  The greatest gains in 2011 will perhaps be in this sector as a new army of internet entrepreneur warriors emerge.
  5. Maintain personal prudence –i.e.  Putting off purchases, eschew debt, save more…and watch your eating and physical habits to enhance health.  Spend much less than you earn.  Consolidate new financial habits and disciplines you imbibed in 2010…such as using a financial worksheet to project and plan expenditures and track net worth movements over the short/medium term.

Following are some of my favourite finance scriptures for meditation and some balance …so please be prayerful and watchful.

Psalm 37[16]  A little that a righteous man hath is better than the riches of many wicked.

Deuterenomy 28[12]  The LORD shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.

Ecclesiastes 5[12]  The sleep of a labouring man is sweet, whether he eat little or much: but the abundance of the rich will not suffer him to sleep. [13]  There is a sore evil which I have seen under the sun, namely , riches kept for the owners thereof to their hurt.

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Compensation and the Recession

 

“A chief executive officer of a Standard & Poor’s 500 company was paid, on average, $10.4 million in total compensation in 2008, according to preliminary data from The Corporate Library.”  Says 2009 Executive Pay watch.

The question has been asked what is fair to pay and reward a high performing executive in a bank or elsewhere? Recent interventions respond in outrage, as the recession hits hard, to cap compensation.  We’ve also seen how expectations of future bonuses led many into debts and bankruptcy as values of assets fell.  One also notes the exposure of greed and embarrassment of those who innocently received generous awards only to later discover that they could not have deserved these payments.

compensationBut God is not against compensation.  Although a God of grace and not merit, He is a rewarder.  Fairness and justice are major pillars in His throne room.  He is also able to accurately weigh actions and establish true and exact causes and consequences.  Unfortunately man cannot often establish the complete consequence of an action taken today nor know the real cause of a positive and negative performance.  God, on the other hand, dwells in absolute, perfect and complete knowledge and reigns in all of time at the same time.  At best it is fair to say our compensation models reward and punish only what we perceive and is enough a case to be conservative and cap our awards…for they are always at best faulty.  We should, for the same reasons, equally be cautious in the severity of our punishments as we often will misjudge the issues.

But God is a rewarder of diligence and His awards seem not to be capped or subject to human limits.  He also punishes the wicked justly – they do not escape.  Remember, He spared nothing to reward Solomon.

Isaiah 3[10]  Say ye to the righteous, that it shall be well with him : for they shall eat the fruit of their doings. [11]  Woe unto the wicked! it shall be ill with him : for the reward of his hands shall be given him.

IKings 3[11]  And God said unto him, Because thou hast asked this thing, and hast not asked for thyself long life; neither hast asked riches for thyself, nor hast asked the life of thine enemies; but hast asked for thyself understanding to discern judgment; [12]  Behold, I have done according to thy words: lo, I have given thee a wise and an understanding heart; so that there was none like thee before thee, neither after thee shall any arise like unto thee. [13]  And I have also given thee that which thou hast not asked, both riches, and honour: so that there shall not be any among the kings like unto thee all thy days.

2Chronicles 1[15]The king(Solomon) made silver and gold as common in Jerusalem as stones…

God does not approve the reward of the slothful and idle. It is perhaps more just in his sight to relieve the sick, save infants, the aged and those unable to work and afford basic necessities in the poorer nations than bail out wickedness or dole free handouts to the unemployed to sustain comforts.

2Thessalonians 3[10]  For while we were yet with you, we gave you this rule and charge: If anyone will not work, neither let him eat.

In addition, compensation that encourages more debt and lifestyle expenditures is a subtle trap. However, offering in a greater proportion more of deferred compensation in equity/or stake in the medium/long term future will perhaps tend to produce fairer and safer modes. 

We can also be careful in seeing compensation in mainly monetary terms.  Solomon had it all, but described it all as vanity, leaving behind a questionable legacy. Jesus Christ walked the earth apparently with modest means supported by the giving of others but inherited a glory that is unmatched.

The word of God does not begrudge our earthbound models of fairness as perhaps these are our best instruments.  In the parable of the talents Jesus Christ does present the God that rewards the diligent. God is not against reward or riches.

Proverbs 10[4]  He becometh poor that dealeth with a slack hand: but the hand of the diligent maketh rich.

However, the Bible does warn us in many references that we do not necessarily help people by making them rich. On the contrary, we often hurt them when we give them more that they need.

I Timothy 6[9]  But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition.

Indeed it is preferred to position our lives and all that we do to be always blessed  – by learning more about and being obedient to God.

Proverbs 10[22]The blessing of the LORD, it maketh rich, and he addeth no sorrow with it.

Genesis 22[17]  That in blessing I will bless thee, and in multiplying I will multiply thy seed as the stars of the heaven, and as the sand which is upon the sea shore; and thy seed shall possess the gate of his enemies; [18]  And in thy seed shall all the nations of the earth be blessed; because thou hast obeyed my voice.

More on God’s perspective on wealth can be found in my recently published book Wealth out of Ashes .

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Have a blessed day and may you never lose your reward – Amen.

Bode Ososami

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