May 2015 Newsletter
April was an exciting month of reaching new audiences with the message found in Smart Money with Purpose (SMWP).
I had originally planned to post a short blog entry this month with some thoughts on how to plan a purposeful vacation based on my recent trip to South Africa.
However, in mid-April I got a call from Joel Belz, founder of World Magazine!
Wouldn’t you be excited if an influential Christian leader wanted to read your book and called you!?
Joel said he had been sitting on SMWP for some time, and decided his readers could benefit from a review of the contents of the book.
I was ecstatic!
On April 17, when his article was posted online, book sales began to go up.
New subscribers (like yourself most likely) began to appear from all over the country.
I got a call from Pilgrim Radio to do an interview about the book. In short, it’s been a fantastic month of seeing the positive message of SMWP spread in an almost viral fashion.
The World article can be found here:
http://www.worldmag.com/2015/04/everybodys_problem
During the radio interview I was asked a question for which I was not prepared:
“How does your message differ from Dave Ramsey?”
I’m not sure what I said, but my response was not as well thought out as it should have been, because I am very familiar with the work of Dave Ramsey.
Traveling around the mountains of Montana visiting my bank branches, I’ve had lot of entertaining times listening to his satellite radio show…
His humor has kept me laughing and his ability to connect with listeners has been impressive.
Being a financial counselor, and hearing his listeners call in with problems, I’ve enjoyed considering how I would advise them by comparison with Dave.
He’s amazing in his ability to quickly discern problems in a short radio call.
Even more impressive is the way he inspires folks to focus on getting out of oppressive debt.
These skills Dave Ramsey possesses have served him well in getting churches to use his Financial Peace University program.
A book called Pound Foolish estimated annual revenue from his efforts to be around $20 million to $25 million in 2007.
Let’s just say SMWP is not doing quite that well!
So if you or your church have used the Dave Ramsey program, does it make any sense to spend time reading SMWP?
I think so and here are some reasons why:
Reason #1: Behavior Change
SMWP is very complementary to the Ramsey teaching.
Dave focuses on behavior change. In fact he often mentions that personal finance is more about behavior than knowledge. My intention in writing SMWP was to focus on changing the way we think about money.
I am passionate about helping folks think biblically about money. I believe that behavior change will last if we have a well-considered Christian worldview about money.
SMWP will solidify the thinking in those who have already changed dysfunctional behaviors and give an intellectual foundation to those who need to change.
Reason #2: Retirement Planning
SMWP will give a different perspective on some very important issues.
I was leading a community group through a discussion about money about two years ago when a retired gentleman approached me on the side and said that he was spending 10% of his retirement savings every year.
He had heard some guy on the radio say that, if he put his money all in growth stock mutual funds, he could earn 12% a year.
But his wife was having doubts about that advice…
I was glad he asked for another opinion as I advise spending no more than 4% a year in most cases and only after having assets that are diversified.
When facing major decisions, such as spending down accumulated assets in retirement, it’s good to get a second opinion rather than run the risk of running out of money when you are unable to work late in life.
Reason #3: Debt Management
Two perspectives on debt will help a discerning reader come to their own conclusion.
Dave had a bad experience with debt and filed for bankruptcy many years ago.
He doesn’t seem to like any type of debt. I’ve loaned money for 37 years and found that there are three types of debt:
1) Regrettable,
2) Productive and
3) Immoral.
Dave and I agree on two of the three…
No one should loan money at interest to the destitute.
Assisting the poor is part of Christian charity, and churches have always condemned charging interest to the poor.
High interest rate consumer debt is also usually not helpful, and Dave and I agree we should counsel others out of it.
However, as a banker, my experience has been that 99 times out of 100, productive debt creates great good.
The many businesses I have served using debt productively and prudently have proven over and over that debt is an instrument for good in the hands of the wise.
Think, for example, about the major innovations in the twentieth century: autos, planes, trains and steel mills to name just a few that would never have existed without debt financing!
I argue in SMWP that productive debt is an instrument used by God to create wealth and lift others out of poverty by using resources productively and wisely.
Reason #4: Life Insurance
Life insurance is another important financial product about which Dave and I have large areas of agreement but room for discussion.
For instance, I agree that most people need to have a large amount of term insurance to cover basic needs if they die and leave others behind.
However, SMWP offers an alternative view of the value, at times, of whole life insurance.
My wife and I, for example, took out some whole life policies on our children when they were small.
The premiums are completely paid now, and the policies are growing in cash value every year by almost 6%, tax-free!
The insurance company is Mass Mutual, which is very safe.
I have heard Dave counsel folks on the radio to always cash in whole life policies.
In my opinion, my children would be extremely foolish to follow this advice because they would be giving up a super safe investment that is earning a great yield and is a great source of diversification for them.
My wife and I also have some whole life policies that additionally have some potential as long-term care insurance coverage.
SMWP suggests that decisions about life insurance are nuanced and may be different than what is taught in Dave’s course.
Final Thoughts
As you can see, I’ll be better equipped to answer that question the next time I get interviewed about SMWP.
Dave and I have complementary approaches to the topic of money…
I think any church would be well served to disciple its members in a Christian worldview by using material from both sources.
Next month I’ll get to that South African vacation!
Hi Joe,
I just came across this blog post today. I was one of those people who bought your book based on Joel Belz’s recommendation in WORLD. I was so impressed with it that I bought a copy for every one of my siblings. And I continue to recommend it to people.