Posts Tagged ‘finance’

Brain Drain??

October 27, 2009

I read an article the other day about the steep reduction in pay being forced upon the executives of the large banks that had received a government bailout.  The concern that was expressed was that these individuals were brilliant in their fields, and that if they were not paid what they thought they  were worth, that they would quit their jobs to work for someone else.

If they are so brilliant, then why did the government need to bail them out?

For most people, if their area of responsibility had failed miserably, they would be looking for a new job, not cashing bonus checks.  Are they going to put on their resume  “We oversaw the destruction of our last company, now what can we do for you”???

If the government had not bailed them out, either they would have worked themselves out of the hole, or they would have been fired and replaced, or their entire business would be consumed by other businesses that were run more efficiently.  The business world can take care  of itself.  The strong survive, the weak are devoured.

Why did we interfere?

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Adjust

October 26, 2009

As a pastor, I am paid after the last Sunday of the month.  We made this arrangement years ago, when I was working a full-time job outside of the church.  The church set my salary at what they would like to pay me, and then paid me at the end of the month, after the bills were paid.   If there was money available. 

 It was my idea.  I was, and am, willing to trust God to provide for us.

 Sometimes I got a full check, and many times I did not.  Over the years, the church has become financially more stable.  I went to working a part time job.  (My wife also works outside of the church.)  The months that I did not receive a full check became less and less.  Now it is a rarity, but it still occurs occasionally.  ( Twice this year, so far. )

I practice what I preach. 

When the income drops, I adjust the family budget for the month.  Need versus want,  is applied as the budget must be adjusted.  Hard decisions about where the money will be used must be made if our monthly budget is to balance.  I am thankful that God has blessed me with a wife who is willing to live within a budget, and who volunteers ways to reduce our spending, that affects her personally.

God provides enough for us, even as I blogged earlier in a post titled “Enough”.  Not only do I practice what I preach; I believe what I preach.  Our church income this month was significantly reduced.  We will adjust.  It will not be without sacrifice, but  it will be enough.

Need versus Want

October 20, 2009

Early in our married life, my wife and I often had conversations about the difference between “need” and “want”.  There are some things that we need, there are many things that we want.

Our government could learn from this simple life lesson.  There are many things that our government is spending money on that are not needs.  When our deficit for a single year tops a trillion dollars, as it has this year, we need to make changes. Change is going to be painful for some, but our governmental leaders should really take a hard look at where our money is going, and they should greatly reduce or completely eliminate things in the budget that are not needed. 

It’s painful, but necessary.  Whether it is personal finance, corporate finance or government finance, the basic principle is still the same.  You need to have more money coming in, than you have going out, or you are in trouble.

As a country, we are in trouble.

Serious Side Effects

September 21, 2009

Congress is considering a bill which will require everyone to obtain health care.  It will also require all companies to provide health care to their employees.  What it doesn’t say is how the individuals, or the companies, are going to pay the cost. 

Most people, and most companies do not have the same opportunity as the government to spend money that they do not have, at least not for very long, and not without serious consequences.

I am very concerned that the cure that congress is offering for our health care issues is going to have serious side effects.  I see a disruption of our economy and our health care system that will be detrimental to the well being of our country.

What’s the Plan?

February 11, 2009

President Bush was severely criticized for not having an exit strategy for Iraq. 

What is the plan to pay back the debt that we are accumulating?  As our congress, pushed by our president, is about to pass legislation that will saddle us with yet another huge bill to pay, I want to know, what is the exit strategy?  How will we get our country out of debt?  Can we even pay the interest?  Before we sign for a loan, can we know the terms?  Where is this money coming from and how will we pay it back?  I don’t hear anything about those little details.

The current crisis in the banking industry has come about because banks made loans to people who couldn’t afford to pay them back.  The loans were bad for both parties. 

At what point are we as a country going to learn that we cannot borrow and spend our way out of our troubles?

At some point, families, businesses, and yes, even countries, must realize that they need to make changes.  They must make hard choices.  They must work on a budget.  They need to make more money than they spend. 

What is the cost?  We are going further into debt by astronomical numbers, lead by our president who proclaims that this is the way.  One thing about debts, they do not just go away.  Sooner or later you have to pay the bill.

Can a country declare bankruptcy?  What happens when the creditors demand payment and we don’t have the money?  Who are the creditors?  Isn’t one of them China?  Does anyone else think it is a bad idea to be deeply in debt to another country?  Especially a communist country? 

What is the exit strategy?

Just Say No!

October 22, 2008

Enough already!!  I like free money as much as anyone, but I really don’t think that the government giving away yet more money in the form of stimulus checks is a good idea.  There comes a time when it is necessary to tighten the belt and start being fiscally responsible, and we are way past the time.

Is the national debt simply going to go away?  Do we simply close our eyes and pretend it isn’t there?  If we thought it was bad when financial institutions fell apart because of loan practices, how bad will it be when the U.S. government falls apart financially?  Will we start to make better choices or will we run full speed into the wall?

Will somebody please do something about overspending?  Our government is like the person who has maxed out their credit cards, so they get a new one so they can charge more.  Sooner or later you are going to have to pay the bill.  Congress reminds me of a person who, while driving,  begins to slip on an icy road, and in a panic over steers, and loses control.  They are making a bad situation worse.

We keep adding to the debt.  When and how are we going to pay it back?

Economic Security

September 18, 2008

This past week has not been a good week for the stock market in the USA.  There have been two days of major drops and there are still two days of trading left in the week.  I suspect that some people are truly being devastated by this economic upheaval. 

I am not worried at all.

I have a four part plan for economic security. 

First,  I understand the difference between needs and wants.   We need the basics of food, clothing and shelter.  Beyond that, it is what we want to have that gets us into trouble.  One of the biggest problems that people have today is that they want to live beyond their income.  Credit is available, and people overextend themselves to have something today that they will pay for dearly tomorrow.  Often these are things that people want, but don’t need.  We don’t need steak, designer clothing or large homes.  I understand the diffence between needs and wants, and am willing to live within my income.

Secondly, I create and stay on a budget.  I believe in planning ahead.  I believe in saving for large ticket items, rather than paying the interest on a loan.  I am thankful that my wife agrees with me about this issue, because it takes both of us being willing to work together to make a budget work. 

Third, I have told my sons since they were toddlers, that I will take care of you for the first eighteen years of your life, if necessary, you will take care of me, for the last years of my life.  I hope that it will never come to that, but it is an option that has been used for generations, long before social security or pensions. 

Fourth, and most importantly, since I was sixteen, I have been faithful in giving back to God a tithe, plus offerings, of my income.  I believe that God blesses my finances, at least partially, because I have always trusted that God is my ultimate provider.  He is my true source of economic security.