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Friday, May 29th, 2009Land of the Free, Because of the Brave
First Iraq, then Afghanistan, then Hollywood!
Work hard: millions on welfare depend on you
Archive for May, 2009
Dave, Debt, and Diapers
Thursday, May 21st, 2009A few weeks ago, in the context of a faculty discussion of a PEERS Test question on economics, Ken Holden said to me, “You sound like Dave Ramsey!”
I had never heard of Dave Ramsey – until that day. About a week later, when I punched the remote with the wrong number for the Fox News Channel and found Fox Business News instead, and, lo and behold, there was Dave Ramsey! Since I had just heard his name, I watched for a while…and I was hooked. Now I record the show all week and watch it on weekends. Some friends loaned us his audio CD series, Financial Peace University. Now the jokes around our house are, “Well, DAVE says…!” and “WWDD?”
For my birthday, Cindy gave me Dave’s bestseller, The Total Money Makeover. I don’t think it will make it into the 21st century additions to The Great Books of the Western World, but if you would like some Biblically-based, common-sense, and down-home funny advice on how to manage money in the modern world, I’d be happy to loan you this one.
The bottom line: Get out of debt and stay out. Your income is your greatest wealth-building tool if you don’t fritter it away in credit card interest and stuff you don’t need anyway. He starts his TV show this way: “This is the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has replaced the BMW as the status symbol of choice.” Of financial sacrifice and discipline, he is fond of saying: “Right now, you need to live like no one else, so that later on, you can live like no one else!”
The program to get out of debt is what Dave calls his 7 Baby Steps (and yes, he named it “baby steps” after the movie, “What About Bob?”):
- Save $1,000 as a Starter Emergency Fund so you won’t have to borrow or charge it when the car breaks down. By the way, Christmas is not an emergency: it comes in December every single year, so plan for it!
- Start the Debt Snowball. Line up all debts, from smallest to largest (regardless of interest rates). Make minimum payments on all of them, and plunk all extra money on the smallest until it is paid. Then do the same for the next in line, and so on. Quick victories give momentum and prevent discouragement.
- Finish the Emergency Fund, which is 3-6 months of expenses (not income, but expenses). Dave calls it “kicking Murphy out.” When life happens, you don’t have to panic, and borrow or charge. Even if you lose your job, you don’t have to panic, but can take your time and find another job you really like.
- Invest 15% of your income in retirement. This is not a glorified savings, but real wealth building. “Well, DAVE says…buy mutual funds” and watch the magic of compound interest over time. People who do this for 30-40 years “change their family tree.”
- Save for your children’s college expenses. (Fortunately, Cindy and I can skip Baby Step #5.)
- Pay off your home mortgage. Can you imagine what life would be like without car payments and house payments? You could invest some serious cash, and fast.
- Build wealth. What is the purpose of becoming and staying debt free? Just as John Wesley said: “Make as much money as possible. Save as much money as possible. Give as much money as possible.”
Other interesting or funny ideas:
Get rid of credit cards. You spend less when you actually have to lay down cash. So what if you earn skymiles or bonus points on your credit card? 75% of skymiles are never redeemed anyway, and Dave says he has never met a millionaire who said, “Yep, Dave, it was my bonus points that put me over the top on my first million!”
Dave is fond of quoting the Bible: “The borrower is slave to the lender.”
Why would you want to keep up with the Joneses? The Joneses are broke!
Dave talks about “stupid tax” – money wasted on living beyond your means (like rent-to-own) or on get-rich-quick schemes (gambling or the lottery).
20% of fiscal discipline is knowledge; 80% is behavior. People don’t like to change their behavior. “When it comes to money, we can be like the toddler in a soiled diaper: ‘I know it smells bad, but it’s warm and it’s mine.’”
If past is prologue…
Thursday, May 7th, 2009Amid the catalogue of Israel’s sins that brought down their final judgment as a nation was this: “They sacrificed their sons and daughters in the fire” (II Kings 17:17).
As unimaginably abhorrent and disgusting as this practice was, there was at least a certain perverse nobility about it: (a) they did this as a practice of religious devotion, because their gods required it; (b) this represented a genuine sacrifice for them, because extended families were their main protection against poverty in old age.
Nevertheless, despite their sadly misguided religious zeal, “…the Lord was very angry with Israel and removed them from his presence” (v. 18).
Fast forward to 21st century America. Since 1973, we have aborted over 40 million of our sons and daughters – and not for religious reasons, but purely for the sake of personal peace and affluence.
Child sacrifice is probably a sign of a society that is sick unto death, is a cancer within the human race, and needs to be removed before it metastasizes.
If past is prologue…then America, like Israel, has made the Lord very angry, and we will be removed from His presence.
When God turns away
Monday, May 4th, 2009Esau found out…(Hebrews 12:16-17)
Sodom found out…(Genesis 18-19)
Saul found out…(I Samuel 15)
Israel found out… (II Kings 17)
Judah found out…(II Kings 24-25)
Herod and Pilate found out…(Luke 23)
It happens for individuals; it happens for nations; it happens for civilizations.
There comes a time, a definite time, a point of no return, at which God turns His back.
Sometimes they know it right away and sometimes they don’t. That doesn’t change the fact that it’s too late.
We love to meditate on the verses about God’s grace and love and mercy. We probably need to spend more time reflecting on the verses about His justice and righteousness and holiness.
It’s very popular today to rhapsodize about God’s “unconditional” love. Just one problem: that’s not in the Bible. Redeeming love? Yes. Disciplining love? Yes. Unconditional love? Nope. That’s a wishful modern myth.
“For God so loved the world…” (John 3:16). That’s true. It’s in the Bible.
“The Lord was not willing to forgive…” (II Kings 24:4). That’s also true. It’s in the same Bible.
It’s not about going back to a primitive conception of a bloodthirsty deity that is no longer palatable to our seeker-friendly sensitivities. It’s about recognizing Him in all of His fullness.
The God who so love the world that He gave His only Son is the same God who loved Jacob and hated Esau, the same God who dipped into Saul’s mind and stripped him of his sanity, the same God who ordered His people to exterminate entire cities.
He didn’t stop being who He is.
God didn’t change from the Old Testament to the New Testament. He is the same yesterday, today, and forever.
There is a hell, after all.