Would Jesus Support the Buffet Tax Law?

May 14, 2012 in Taxes with 0 Comments

A few weeks ago, the Senate rejected a new tax initiative to tax the wealthy of the United States. The senate’s rejection on what is being called the Warren Buffet Tax law is stirring up some debate about tax initiatives. The law was inspired by Warren Buffet’s declaration that wealthy individuals are paying lower effective tax rates than the middle and lower classes. With a tax structure that is already designed to tax the wealthy at higher rates, many individuals are asking whether it is fair or right to tax the wealthy more.

Influence of Politics

If not already obvious, one’s perspective on this tax law (or any tax law in general) is largely shaped by one’s political stance. There are many reasons why it is opposed. Many individuals believe that taxing the wealthy more would reverse this sense of capitalism which fuels our economy. In other words, it would encourage them not to earn more money and therefore stimulate the economy. Perhaps even more convincing, many suggest that taxing the wealthy would limit their ability to provide more jobs and/or business for the economy. If the government took more money, they would cause greater expense to them and limit the money they are able to invest in growing sustainable commerce.

On the other perspective of things, it is the wealthy who live comfortably. Despite the recent economic recession, the wealthy were not burdened with the worry about making ends meet as much as the middle and lower class. In the same way that the Widow’s offering. Where, as we learn in the bible, she gave out of her poverty. While the importance of that story is to emphasize that it’s the sacrifice that matters, it also reminds us that it is much more difficult for those with less money to give. Those in favor of the tax bill are also fueled by the fact that Mitt Romney had an effective tax rate of 13.9% on his some 20+ million dollar income in 2010.

Would Jesus Support Higher Taxes on the Wealthy?

In light of the recent debate, I felt it would be interesting to investigate Jesus’ response to the situation. What would Jesus do? I am sure many of you recall the popular WWJD bracelets from the 90′s. They were a popular fad. Many of my friends in high school had them and wore them proudly. Despite the good intentions behind this product, these became more about proclaiming one’s identity as a Christian than asking a genuine question to follow in Jesus’ footsteps.

While I don’t want to carry over the negative connotations with these bracelets that many people have in their minds, I do want to ask the question of what Jesus’ response would be – as this will help inform what a Christian response might be. Despite my initial assumption, I have actually come to understand that it isn’t as clear as we would like. Life is never that simple, is it?

Paying the Tax to Caesar

One of the first passages that came to mind when preparing this post was Matthew 22:15-22 – the challenge to Jesus about paying taxes. It reads:

15 Then the Pharisees went out and laid plans to trap him in his words. 16 They sent their disciples to him along with the Herodians. “Teacher,” they said, “we know that you are a man of integrity and that you teach the way of God in accordance with the truth. You aren’t swayed by others, because you pay no attention to who they are. 17 Tell us then, what is your opinion? Is it right to pay the imperial tax[a] to Caesar or not?”

18 But Jesus, knowing their evil intent, said, “You hypocrites, why are you trying to trap me?19 Show me the coin used for paying the tax.” They brought him a denarius, 20 and he asked them, “Whose image is this? And whose inscription?”

21 “Caesar’s,” they replied.

   Then he said to them, “So give back to Caesar what is Caesar’s, and to God what is God’s.”

 22 When they heard this, they were amazed. So they left him and went away.

The first thing to point out about this passage is that the people posing this question, according to Matthew, were trying to trick Jesus. They wanted to limit him to a simple “yes,” or “no,” as they often do in the gospels. Jesus saw through their scheme and does something quite remarkable.  Here’s a brief video by Shaine Claiborne, explaining his understanding of this passage.

In other words, Jesus’s response is not trying to place emphasis on making sure to pay your taxes. Instead, he is dismissing their simplistic question by saying taxes don’t matter. In other words, he finds a nice balance between the two extreme positions.

While it may be a healthy question to ask whether Jesus would support this law, we shouldn’t limit Jesus into picking one of two extreme positions. Doing so would greatly limit Jesus’ radical beliefs and actions. Jesus’ primary concern seems to present a way of live that is full of love and lacking mistreatment, injustice, etc. I would suggest that both positions are flawed and we have to use our best judgment to decide between the two options. This is another reason why financial rules of thumb are inadequate.

Do YOU think Jesus would support increasing taxes on the wealthy?

U.S. Companies Exploit International Workers – Lack of Fair Wages

May 7, 2012 in Economy, Politics with 0 Comments

I know I am not the only one to call up various service lines to be connected overseas with international phone representatives. It’s always amazing to me to see how popular and frequent this is becoming these days. The reality is that U.S. companies are outsourcing labor in order to cut costs.

I have already made it clear that I consider most people in the U.S. rich by world standards, so it should be obvious that I am not trying to suggest that international workers do not have the right to these jobs. Instead, it is the unfortunate reality that U.S. corporations are taking advantage of international regulations to minimize expenses and maximize profit.

Recent Illegal Allegations on Infosys

A couple weeks ago, the story came out that Infosys, a major tech company, was illegally bringing workers to the U.S. with incorrect visas. Instead of issuing work related visas, Infosys was bringing workers over on B-1 visas. According to an article on Infosys, the company was issuing recommendations on what to say when going through customs to avoid suspicion. Not only were there allegations of illegal visa activity, Infosys was paying these workers Indian wages without withholding income tax of any sort.

This is a blatant attempt to lower expenses in labor costs, avoid major taxes, and maximize profit. It is another reason why greed can be so deadly. Not only were they breaking major laws, they were treating international workers poorly.

Religious Response to Excessive Outsourcing

Again, I feel it important to clarify that it is not my intention to promote any U.S. only labor laws. I believe immigrants have the right to compete for jobs. However, I find the system which tries to increase the profit of high end executives at the cost of nearly dehumanizing entry-level workers a major atrocity. No person deserves to be paid significantly lower wages just because they were born in another country.

God cares for all of humanity – not just rich Americans. While the nature of business is to seek a maximum profit, it should be within proper business ethics with a ground work of fair wages.

I hate to think what will happen to all of the persons and families that worked for Infosys as a result of the exposure to Infosys’s illegal activity. I can’t imagine the difficulty of working for a company for significantly lower wages than workers from another country and to be forced to leave your new home and job after something like this. While I know that international workers will adapt and continue to use their hard work ethic to give themselves an advantage in a time of high unemployment, it doesn’t make it okay to treat others this way.

How to Handle Medical Bills like a Pro

May 3, 2012 in Miscellaneous with 0 Comments

Ah, medical bills.  We all hate them but they have been part of our life since birth.  As the old, wise saying goes, “there is no such thing as free lunch.”  Oh how that is especially true with medical bills!  I was just at the doctor’s office for a typical check-up and it cost me $20!  no treatment, no nothing, but it still costs me money.  I guess I should be thankful I’m not paying thousands because of cancer treatment!

However, my point here is that medical bills are part of life and the sooner we accept that, the sooner we can properly manage them.

If you find yourself in a position where you have a gigantic medical bill looking back at you, what do you do?  I know you didn’t ask for a big medical bill but sometimes real life can be quite the shocker.

I want to share with you some tips for lessening the burden of a medical bill.  Some of these tips might surprise you because hospitals and pharmaceutical companies simply don’t want you knowing about them!

Never pay full price

Did you know that you don’t have to pay full price for your medical bills?  If you’re surprised, you’re not the only one!  Hospitals assume that you will just pay the price tag of whatever treatment you had.  It amazes me how people blindly walk into medical bills and write a blank check.  Stop forking over money for the full bill!

Hospitals understand the economy and are typically willing to negotiate bills.  Another thing you should consider is negotiating the price of a medical procedure before you get the bill.  It’s not uncommon for hospitals to slash their price by 25% or more to retain your business.  Remember, hospitals and medical companies are run like a business; they don’t want to lose you and your family’s business!

Don’t assume the bill is correct

Medical bills are like traffic tickets, there are typically errors that can lessen the amount of the bill.  Did you know that the average medical bill passes through five sets of hands?  It can actually be more than that for certain hospital organizations.  Because of this arduous process, you need to make it  a habit to double check medical bills.  Hospitals could care less if you overpay for something that is not correct.  You care because your wallet cares!

How to handle medical debt

Medical debt is never fun, but sometimes it happens.  A great example is someone who goes through cancer treatment and their insurance only covered 50% of it.  If the rest was taken out on credit, you will need to tread carefully.

Most medical organizations will not request the full amount owed.  Instead, you can negotiate payments and end up paying the price in full.  For a hospital to go to collections is quite the process and can be spendy for them.  They are typically extremely open to negotiating with you.

Going forward…

After reading this article, hopefully you are more self-aware and will be better prepared for medical bills in the future.  Taking action and learning about these things will benefit you down the line especially if you feel it doesn’t matter now.  Don’t assume these situations will never happen to you.  You never know what the Lord has planned for your life, and as Christians, we are called to a standard of wisdom and not simply following the Lord blindly through life.  Be prepared for the worst and the Lord will take care of the rest!

Seven Deadly Sins and how they lead to Financial Disaster

April 30, 2012 in Miscellaneous, Prosperity with 1 Comment

Christianity, by tradition, has long affirmed the recognition of seven deadly sins. For those unfamiliar with them or the Christian tradition, they (as listed on wikipedia) are wrath, greed, sloth, pride, lust, envy, and gluttony. These seven deadly sins are considered unhealthy vices. Christian history has used these speculate what a healthy lifestyle would look like. Basically, take all of these things – make sure you don’t do any of them – and you are set.

While it may not be this simple, it is essentially the point. The truth is though, that the seven deadly sins is often ignored or forgotten. Despite learning about them from the financially successful Hollywood film ‘Seven’ by Andrew Walker, starring both Brad Pitt and Morgan Freeman, I would wager a bet that most people in my generation have not learned of the seven deadly sins. In fact, even as a Seminary student (who also grew up in a Christian family), I had to look up the seven. I new a few of them from memory, but there is no way I could name them all.

As a result of which, I thought it would be interesting to use the seven deadly sins as a structure for a financial article. What might these teach us about smart financial management and how might our lives be different if we did or did not follow them.

1. Wrath: Wrath  is often used in the Christian tradition to refer to God’s anger. This the essence of what this deadly sin refers to. Falling victim to excessive amounts of anger can do terrible things for one’s financial state. Making decisions based on anger can lead one to ignore all signs of wisdom or advice. It is always important to try and reflect on your financial state with a sound mind.

2. Greed: Greed is the strong desire for wealth, money, goods, etc beyond a healthy limit. If you are interested in reading more about greed, be sure to check out my article What is Greed? Greed can also cause all sorts of unbalance with your finances. It can cause you to be disconnected from your family or gamble away your money. It’s always important to balance your desire for more wealth with things that truly matter.

3. Sloth: Other than the movie film’s character Sid the sloth from Ice Age, the word sloth is not often used in popular conversations. This may make it hard to understand, but refers (in this case) to apathy. Apathy or sloth can cause a huge financial disaster. Not caring about monitoring your finances or even budgeting can lead to financial ruin. Before you know it, you can overspend and find yourself wondering how you are going to pay off debt. Financial management is an on-going activity that requires action and attention.

4. Pride: I am sure everyone has felt proud of an accomplishment. There are certain degrees of pride that are healthy – such as celebrating an achievement. However, there are also forms of pride that take control of your life. Before you know it, you can feel unstoppable and take risks that are unnecessary and unprecedented. It’s always important to critically question your actions when managing your finances. Can I afford to take this risk? Would I lose to much? Is my reasoning for doing so justified? These are all important questions to ask.

5. Lust: Lust, the cheap version of love, is often understood as some sort of sexual fantasy. While it doesn’t have to be limited to this definition, even this understanding helps us understand something about finances. Ignoring lust teaches us to place value on something long-term – something more than just an momentary feeling of satisfaction. The inherent message of resisting temptation and holding on to previous commitments also parallels advice given for retirement – that is, buy and hold. Thinking long-term for financial investments is a great strategy.

6. Envy: When was the last time you were envious of your neighbors new car or nicer house? Is is this effort to keep up with the Joneses that puts a lot of American families in consumer debt. Envy, or wanting to have what other people have, can lead to unnecessary spending. Take extra care not to place value in possessions – for you will never be satisfied and always wanting more.

7. Gluttony: Gluttony or the over-indulgence is a theme that I think Americans know all too well. Traditionally, Americans are known for their big houses, big cars, and many possessions. It’s unfortunate but true to a certain degree. I know that I personally have realized how much stuff I can accumulate over time. It is a struggle at times not to satisfy that urge to buy more or even eat more, but it is a healthy practice to avoid doing so. This reminds you that giving should be an important aspect of your life as well as keeps you from completely buying into the consumerism myth that possessions will make you happy.

I didn’t realize it when I started writing this post, but it’s remarkable how well the old, Christian traditions still speak to the experience of contemporary American culture. Managing your finances is never black and white, but full of shades of gray. It means weighing options and deciding which is the best one. Hopefully these deadly sins will give you an idea of what not to do.

Is Starbucks’ Support of Gay Marriage a Marketing Ploy?

April 24, 2012 in Marriage, Politics with 1 Comment

Gay marriage and/or rights has been a recent controversy within Christian circles. While many still believe that homosexual behavior and feelings are against God’s will, others believe the exact opposite. But, it isn’t just Christians talking about same sex marriage. In fact, in the past few months major corporations have joined the conversation in support of Gay marriage. Starbucks has officially joined the conversation, supporting gay marriage in Washington. As a result, social networks have flooded with either support for or against Starbucks.

Why Starbucks’ Support for Same Sex Marriage is Important to Some

To say that this topic has polarized Christian groups would probably be an understatement. Despite the validity of each position, I would like to focus on the recent events, with particular attention to the undying support of Starbucks as a result of their stance on gay marriage. Whether you would identify yourself as part of this group, there is a large group of progressive or liberal (to apply restricting labels) Christians who are in favor of same sex marriage and rights. It is their belief that equality is a fundamental aspect of Christianity and the only way to promote this is through equal rights on all fronts. These groups and churches often focus more on social justice issues than anything else.

As a result of the recent stir around Starbucks’ support, many of said Christians expressed their undying support of Starbucks’ action via facebook, twitter, and any other popular social networks. Truth be told, I was inundated from these to social networks by numerous people – regardless of Christian affiliation (or lack there of). For those in support of these corporations’ stance on this legislation, it is often in response to the hostility that gay and lesbians have received. Therefore, support of Starbucks action is not about a corporation or some legal issue, but the person or persons who have been harassed by others. It is a bold claim that no one deserves to be treated this way.

What does Support of Starbucks Pro Gay Marriage Stance Mean?

Regardless of the reasons behind this issue (especially within Christianity), I can’t help wonder the motivation behind corporations actions to support such rivaled issued. Why would Starbucks want to support a cause that could lose them business? As a business, whose mindset is to earn a large profit for them and their shareholders, is it really about the issue?

While I would like to see that major corporations and businesses actually care about social issues, my hunch is that marketing experts know this. Starbucks has long faced criticism for its failure to abide by fair trade regulations. I believe they have learned their lesson they can no longer sit on the sidelines while legislation that affects the society is being played out. Instead, by playing an active role in this issue, they not only jump to the forefront of the media, but also gain back some of that mistrust with those still upset by their decision to ignore fair trade regulations.

We all know that politics is a game of hot-button issues. When you ask people who they are voting for in the upcoming elections or what party they will vote, many people have now learned to reply with one simple sentence…

“I vote according to the issues”

Whether we want to recognize it or not, this is what I believe is being carried out here. Starbucks is in need of public support and this is an easy way to do it. While it may push some business away, it will most likely gain support of former Starbucks protesters and increase revenue. Unfortunately, the motivation of greed is a strong force and continues to play a larger influence in political affiliations.

Readers, why do you think Starbucks is supporting such a debated issue? Is it out of genuine interest or do they have ulterior motives.

Top 5 Mortgage Mistakes

April 19, 2012 in Budgeting, Investing with 2 Comments

As someone who is looking forward to purchasing a condo next year, I have been doing a crazy amount of research on mortgages.  Honestly, I keep stumbling upon mistakes that people have made with mortgages.  Since I don’t want to be someone who makes a mistake with their mortgage, I’m planning on soaking in all useful advice and attempting to make the wisest decisions I can going forward!

So, what are the worst mortgage mistakes one can make?  Well, I’ve compiled the top five mortgage mistakes and hopefully you can learn from what other people have done wrong and not make the same mistake!

1- Taking out an adjustable rate mortgage

Can someone say 2008?!  This is what caused our most recent recession among some other things.  An adjustable rate mortgage plays into the greedy side of Americans and allows you to buy a bigger house than you can afford.  The first few years, you’ll have a really low interest rate but then this rate ends up shooting up over time.  The problem with this is that you’ll end up drowning in interest payments and more than likely lose your home!  Talk about humiliating…

2- Settling for a reverse mortgage

For the crowd of age 62 and older, a reverse mortgage may seem inviting but it’s designed to bite you in the butt.  What a reverse mortgage does is provides a stream of income by pulling out funds from your home equity.  This can be paid out through an annuity or monthly payments.  It’s up to you what poison you pick because either way, you’ll be faced with hefty fees and you will slowly lose ownership over your home and have to hand it all over back to the bank.  Does not sound like fun to me!

3- Skipping the down payment

If there is one thing you need to remember from this article, it’s that you NEED to put down a down payment!  Why you ask?  It’s not unusual to find yourself upside down with your mortgage if you don’t.  You can end up owing more money than your home is worth.  At this point, it’s flat out painful.  You want to avoid this situation.

4- Can anyone say exotic mortgages?

I bet you’ve never heard of these bad boys.  Exotic mortgages may sound enticing but they are dangerous financial vehicles!  Instead of building up your equity, exotic mortgages produce negative equity.  Yes, you’re naming your payment price, but at some point, all the debt you took out for your mortgage is going to come due.  As the years go on, you are increasing the amount you owe.  It’s counter-intuitive and I advise that you avoid this at all costs.  Owning a home is not worth this risk!

5- Liar, liar, pants on fire: liar loans

Liar loans make me sick just thinking about them.  Not only are they irresponsible to take out but they can ruin your financial life.  At the core of a liar loan is that you don’t need to produce any verifiable documentation in terms of income and job stability.  In theory, people can lie on these loans and the bank will just assume you’re telling the truth.  Because you lied on your income statement, you will soon find yourself not being able to make the monthly payments.

Don’t fall for these mistakes!

In conclusion, don’t fall for these bad decisions.  While they may seem cool and unique, they are designed for your failure.  There is something to be said about ethical mortgages and choosing responsibility over showing off a big house.  At the end of the day, you should only be buying enough house for your needs.  It’s anti-American to do that but times are changing!

Should You Give Away All of Your Wealth?

April 17, 2012 in Personal Finance Bible Verses, Stewardship with 2 Comments

One of the most obvious bible passages that relates to personal finances is the story of the rich young ruler. The passage, which is found in all three of the synoptic gospels (Matthew, Mark, and Luke) tells the story of a man asking what he needs to do to obtain eternal life. The question is one of the most pertinent questions because since those of us living in western society are the rich, it forces us to ask whether we need to give away all of our wealth. Does God’s message suggest those who are following Jesus to give away everything we have? Such an extreme message seems to suggest that financial planning of any sort is the opposite of what Jesus commands. This seems to be the opposite of what this blog is about, but if we refuse to go the extreme, do we lost the identity as Christians. This paradox is one that has puzzled the church for some time, so I thought I would spend some time reflecting on it.

Here’s the exact words from Mark 10:17-31:

17  And as he was setting out on his journey, a man ran up and knelt before him and asked him, “Good Teacher, what must I do to inherit eternal life?” 18 And Jesus said to him, “Why do you call me good? No one is good except God alone. 19 You know the commandments: ‘Do not murder, Do not commit adultery, Do not steal, Do not bear false witness, Do not defraud, Honor your father and mother.’” 20 And he said to him, “Teacher, all these I have kept from my youth.” 21 And Jesus, looking at him, loved him, and said to him, “You lack one thing: go, sell all that you have and give to the poor, and you will have treasure in heaven; and come, follow me.” 22  Disheartened by the saying, he went away sorrowful, for he had great possessions.

23 And Jesus looked around and said to his disciples, “How difficult it will be for those who have wealth to enter the kingdom of God!” 24 And the disciples were amazed at his words. But Jesus said to them again,“Children, how difficult it is[a] to enter the kingdom of God! 25 It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” 26 And they were exceedingly astonished, and said to him,[b] “Then who can be saved?” 27 Jesus looked at them and said, “With man it is impossible, but not with God. For all things are possible with God.” 28 Peter began to say to him, “See, we have left everything and followed you.” 29 Jesus said, “Truly, I say to you, there is no one who has left house or brothers or sisters or mother or father or children or lands, for my sake and for the gospel, 30 who will not receive a hundredfoldnow in this time, houses and brothers and sisters and mothers and children and lands, with persecutions, and in the age to come eternal life. 31 But many who are first will be last, and the last first.”

Initial Commentary on Rich Young Ruler Passage

There are a few preliminary points that I need to point out before reflecting on the question of whether you need to give away all of your wealth. The first, and perhaps more important, is our understanding of “eternal life.” Most often, in Christian circles, this is understood as the path to Heaven. When understood this way, the rich ruler’s question to Jesus seems to be phrased as such: “Jesus, what do I need to do in order to get into Heaven?”

This couldn’t be further from the truth of what he is asking Jesus. Instead, eternal life is more accurately referring to a way of life. In the same way that the “kingdom of God” is referring to a movement that Jesus is starting (instead of some place you go after you die), so is eternal life.  This interpretation is supported by Jesus’ response. He instantly refers to the commandments. The commandments were a part of the covenant of Israelites with God – it was about their life with God right now – in this world. Therefore, the rich young ruler’s question, when paired with this understanding of ‘eternal life’, affirms the importance of our action now.

A Possible Interpretation of Rich Young Ruler Passage

The question remains then, what should be the Christian response when it comes to using our wealth. Does this passage suggest that we need to give everything away?

While it may be tempting to support such an idea, I think reading the passage in this way is too simplistic and misses the point of the passage. Jesus’ point is not that everyone who is rich should give away everything that they have, but instead to point out that we are too strongly connected to our possessions. After all, verse 22 says,

 Disheartened by the saying, he went away sorrowful, for he had great possessions. (emphasis added)

I am not sure about you, but I know that I can relate to this state of being. I know that I am considered on of the richest people in the world. While I strive not to be tied down to physical items or consumed with buying the latest, fastest gadgets, it can be difficult at times. I think we can all relate to wanting the best stuff. The problem is too often we let our consumerism get in the way of following a better path. Instead of feeding the poor, or contributing to a better society, we are caught up taking care of our items. It was just today that I had to run to the DMV before work, drop off my car to get the oil changed, and will have to do several other errands this just to take care of my car. While it is a blessing to have such items, it can also be a curse, as it has the potential to drain all of my free time.

If we understand this passage this way, it helps re-affirm our act of being intentional with our finances. Planning, one of the core fundamental values of this blog, is supported. Following Jesus or even caring for others does not mean that we do the opposite of financial planning, but the exact opposite. In order to help others, we need to weigh the options and be purposeful to not get caught up in consumerism. Jesus asks us to step away from the distractions for the benefit of others. Last but not least, it is important to point out that I am not saying that you should forego giving. This isn’t in support of the idea of hoarding all of your wealth to yourself because it is yours and we are supposed to be wise with our money. Instead, this is an attempt to hold in tension the willingness to help others while also planning ahead for the financial needs that will come up with your family.

Do you identify with the rich young ruler? Is it difficult to avoid buying the latest items?

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