5 Key Principles for Financial Success

November 21, 2004

I.  Two “Keys” for Financial Success

A.  Discipline:  Spend less than you earn over the long haul!

Input: What happens when you don’t follow that principle?

> DEBT usually results – we’ll deal more specifically with that in a minute

- so much of our Christian life is related to personal discipline

Q:  How is that achieved? 

> through the Holy Spirit – as we learn to make decisions based not on our desires only – but our desires as controlled and directed by the Word of God!

- sometimes the most godly thing to do is to say NO to a purchase – or even to WAIT

- or to pray about that issue, talk to your spouse, learn to walk away and think about it, compare the purchase with your budget, etc.

B.  Consequences:  Opportunity cost of consumption

- once it spent, it’s gone . . . for eternity!

Input: What does this principle compel us to do?

>  Ask for wisdom in the use of those funds entrusted to us!

- image the misuse of $2.74 per day for 1 year = $1000 at the end of the year – multiply that $1000 times an interest rate of 15% each year compounded annually for 5 years:

>$1000 x 15% annual compound return = $2011.35 !! ($1,011.35 in interest earned – or in this case LOST due to consumption $2.74 per day!

> if you continue that formula for the next 5 years (10 years total) – that $2.74 per day for one year could have become $4,045.54 – or a $3,045.54 cost of consumption!

Q: Is it important that you make wise choices daily?

III.  Five Key to Financial Success

A.  Understand the Biblical truth related to finances:

1.  We should realize that having money is not wrong in itself.

  • 1 Samuel 2:7 "The LORD makes poor and rich; He brings low, He also exalts.”

- being wealthy is not a sin – but how you use what God has entrusted to you can a sin!

Q:  Who are some OT examples of wealthy people who trusted in God?

  >  Abraham, Job, Solomon

2.  Money is a gift from God. [READ Deut. 8:11-18] – interesting that Moses had to remind the children of Israel this!

> . . . but you shall remember the Lord your God . . .

3.  We must be willing to part with money as God directs your steps.

  • Matthew 19:27 Then Peter said to Him, "Behold, we have left everything and followed You; what then will there be for us?"
  • Job 1:21 He said, "Naked I came from my mother's womb, And naked I shall return there. The LORD gave and the LORD has taken away. Blessed be the name of the LORD."

- many times the sovereignty of God comes into play –in trials and other events in our life

e.g. my old Honda died in Jan of this year – then Caleb had an emergency appendectomy – the Laurie lost her diamond – Keri had braces – and we’ve launched Delight Music! WOW – what a year!

Point: It’s all about stewardship . . . trusting God for wisdom in the use of what He has entrusted to us!

4.  Those who have money must not be given preferential treatment – cf. James 2:1-10

Q: What is wrong with that? [all sorts of reasons!]

5.  We must not be proud, nor seek security from money.

  • 1 Timothy 6:17 Instruct those who are rich in this present world not to be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy.
  • Proverbs 11:28 He who trusts in his riches will fall, But the righteous will flourish like the green leaf.

6. We must never make the pursuit of money that highest goal of our lives!

  • Matthew 6:33 "But seek first His kingdom and His righteousness, and all these things will be added to you.

7.  We must use our money for eternal purposes.

  • Luke 16:9 "And I say to you, make friends for yourselves by means of the wealth of unrighteousness, so that when it fails, they will receive you into the eternal dwellings.

8.  Money must not be loved!

  • 1 Timothy 6:10 For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.

Pont: Our satisfaction, joy, delight, direction, is all GOD-CENTERED – cf. Psalm 73:25!

B.  Adopt a non-consumptive lifestyle.

- the best way to financial success is simply this:  Live within your means!

- be content with what God supplies

- learn the distinction between WANTS and NEEDS!

Ill: Think about our brothers/sisters around the world that do not have what we have!

C.  Avoid the use of debt and/or be cautious in the use of it (well-advised/planned out!)

1.  Two primary dangers of debt

a)  Presumes upon the future – and you don’t know what that holds (James 4:13-17)

b) May deny God an opportunity to work in your life!

  • Philippians 4:19 And my God will supply all your needs according to His riches in glory in Christ Jesus.

- ever try praying for something before you make the decision to get it?

Ill:  Looking for a piano in Florida – thousands – got a used baby grand, Kawai for $2000!

2.  Not that all debt is wrong – but there are cautions/warnings:

  • Proverbs 22:26 Do not be among those who give pledges, among those who become guarantors for debts.
  • Proverbs 22:7 The rich rules over the poor, and the borrower becomes the lender's slave.

D.  Maintain high liquidity (i.e. savings!)

- it has been recommended that at least 3 months of your salary be in salary put reserved for emergency use

- it takes time to build that up – remember the $2.74 per day illustration!

E.  Set long-term goals

-  Regarding emergency funds / car funds (act like you’re buying a car because you HAVE to and make the payments to yourself to a saving account so you will have the money [or most of it] when you do have to buy a car!

- set long-term goals for repairs for your house / college tuition for your children, etc.

Note:  Talk about the parenting implications to this series – teaching your children these truths

Pont: There should be LITTLE or no financial pressure in our homes if we have carefully thought out, discussed, planned how and when to use our finances for the glory of God!

- and it’s all about HIM – bringing glory to the God who created us and breathed into us the breath of life

- God established work –and said if a man doesn’t work, he doesn’t eat – and whatever we have, we have because of the grace of God

Q:  How gracious are you with your money?

Q:  How disciplined are you with your cash flow?

Q:  How often do you stop your self before making a financial decision and ask yourself, “Will God be glorified by this purchase, or more glorified if I say NO to the purchase?”