Question

Prepare a 100 - 200  word devotional entry responding to these questions.

1. In what phase of the financial life cycle are you (self-preservation, accumulation, or distribution)?

2. How do you feel God would like you to reallocate His resources? What changes can you make to better align your financial decisions with God’s plans for your life?

Answer 1

In a relay race, each runner is responsible for completing a leg in the race. The first runner begins the race by running as quickly as possible, building momentum for their teammates, essentially setting the foundation for the rest of the race. The second runner then begins running, feeding off that momentum, to execute a seamless handoff. Most people believe the first or last runner has the most impact on the success of the team; however it’s actually the handoff between runners that could mean the difference between victory and defeat.

There are three key phases of someone’s life as they plan for retirement.

1. The Accumulation phase.

2. The Preservation phase.

3. The Income and Distribution phase.

“THE ACCUMULATION PHASE”

This phase starts when a person enters the workforce. Think about your very first day on your very first job. Then fast forward in your mind every day since then. A lot of blood, sweat and tears have gone into our working life. It’s an important part of your life and will hopefully set you up for the next two phases.

                                         We believe that most of our children or grandchildren are going to be retiring standing on one leg. Meaning, their own personal savings and investments could be their main source of income during retirement.

                                          We would recommend you also consider the amount of risk you’re able to take in this phase. Because you’re so far from retirement, and have time to recoup losses and you can take more risk. Most of the people we work with are in phase three, are don’t have time to recover losses.

“THE PRESERVATION PHASE”

This phase begins when an individual first begins to prepare for retirement.

Just like the accumulation phase, you are still working; however you’re now in the “retirement red zone”.

                                      In the preservation phase, you want to begin to decrease the amount of risk you’re taking with your investments. Instead of having most of your money exposed to the risk of the market, you may want to take less risk with a calculated and reasonable rate of return.

                                         This is something we do better than anyone else out there when it comes to building a portfolio. Many times we sit down with people and they tell us their current advisor hasn’t ever spoken to them about any of this.

“THE INCOME AND DISTRIBUTION PHASE”

                   This starts when you end your working career and you’re now using your retirement nest egg for income.

                                            Just like in the relay race example, it’s important smoothly transition your assets into a steady income stream. This income stream will need to cover, not only your required expenses such as bills, but also your lifestyle expenses. We like to call them your “paychecks” and “paychecks”.

                     Your paycheck is used to cover your basic expenses such as your mortgage, water and food bills. You won’t want to guess if you’ll be able to pay your water bill every month, so we recommend you have a guaranteed source of income for these expenses. Your “paycheck” on the other hand can be more variable and doesn’t need to come from guaranteed income sources. Your paycheck allows you go to out and play! You may want to golf every day in retirement, go on trips, or out to dinner. These are luxuries you could technically live without.

2. What changes can you make to better align your financial decisions with God’s plans for your life?

three Principles of Financial Planning God’s Way

                     Financial stress can affect all facets of life. In some cases, it can even lead to severe anxiety and depression.

1. You have to either make more or spend less: It really is that simple. It is imperative to begin with a budget that takes into consideration short, mid and long term goals. Next, start eliminating credit card debt on any and all revolving account(s). Finally, at some point you have to stop borrowing from the future to pay for the temporary pleasures the purchases of today may bring. It requires self-control. Galatians 5:2-3 says self-control is one of the fruits of the Spirit. Ask God to grow this fruit within you as it will help you along your journey toward achieving real financial freedom

2. You must recognize discipline is imperative: With each purchase you feel you need to make outside of food, shelter and healthcare begin the “three day rule.” For the next three days list out why you feel the purchase of each item is imperative. Set aside some time each day to ask God to give you wisdom over your financial decisions. The Bible says, “If any of you lack wisdom, you should ask God who gives generously to all without finding fault, and it will be given to you.”(James 1:5). After three days you should have clarity and peace to either move forward with or abandon the items on your purchase list.

3. You must transform the way you view money: We all have a relationship with money and for many of us—it is unhealthy. Finances become an idol when we look to them to bring us the fulfillment that only God can supply. See life is not all about money, yet too often we make it all about money by allowing it to define our identity, become our source of security, and ascribe to us a sense of significance and rule over our marriages and homes. Money becomes a false god when we find ourselves worshipping it. The truth is all false gods eventually lead to our downfall. Jesus makes it clear that money is often God’s main competition for our hearts.