Here are links to the carnivals I was in this week:

• Carnival of Personal Finance – How to Get Out of Debt: Step 10 – Don’t Get Trapped Again!

 

• Festival of Frugality – Raising a Cow for Beef: Month 12

       Here are some interesting articles I found this week that I’d like to share with you:

• Bad Money Advice – The Reality of Saving Energy, Money, and the Planet – [Frank points out some of the flaws with the green movement and the misguided efforts of many who are interested in either saving the environment or saving money.]

 

• Dollars & Doctrine – Does Christianity Support Communism? – [Rob shares his perspective on whether the Bible teaches communism. He comes to similar conclusions as Joe from Personal Finance by the Book but with a little different emphasis.]

 

• FiscalGeek – Why a House or Mortgage Payment Should NEVER Own You – [Kevin from Out of Your Rut offers some great tips on housing payments in his post at FiscalGeek.]

 

• Cash Money Life – When Companies Go Too Far – [Ryan talks about MonaVie's tactics against Lazy Man and Money (who I mentioned in my post on Monday) and why he'll never do business with MonaVie regardless of whether it's a scam or not.]

 

• Man vs. Debt – Belief, Without Action, is Dead – [Adam Baker shares some great wisdom about taking action from James 2:14-17.]

 

• The Oblivious Investor – Hedge Fund Expenses: They’re Not Cheap – [Mike does the math on a "cheap" hedge fund. Hint: it ain't cheap!]

 

• Faithful with a Few – Do You Really Need An Emergency Fund? – [Khaleef shares his thoughts on emergency funds. I mostly agree with him, except I don't think everyone needs a 12 month emergency fund. How much you need in an emergency fund depends on your situation.]

       Have a great weekend!

       In the last part of this series, we continued talking about practical applications when we take on God’s View of the World, Money, and our lives. How should we act and what should we do when we take on God’s View and live out His will? We’re still continuing that discussion today.

       How does God want us to deal with our circumstances? Paul provides us with some insight in 1 Thessalonians 5:16-18:

       ¹⁶ Rejoice always. ¹⁷ Pray without ceasing. ¹⁸ In everything give thanks, for this is the will of God in Christ Jesus toward you.

1 Thessalonians 5:16-18 (WEB)

       I’ve talked about 1 Thessalonians 5:16-18 before, so I won’t go into as much depth here. This passage clearly sets out God’s expectations for how we should live, regardless of our circumstances. We are to always rejoice, pray without ceasing, and give thanks in everything. God wants our lives focused on the Gift He has given us, becoming closer to Him, and enjoying the good things He has blessed us with. There’s no room for greed or materialism when our hearts are focused on those things. That’s God’s will for us—that we’re focused on Him instead of this world.

       So we know by now we shouldn’t be focused on material things or amassing great wealth, but we still have needs while we’re living on Earth. What should we ask God for, and how much of it should we request? Agur gives us some good guidelines in Proverbs 30:8-9.

     ⁸ Remove far from me falsehood and lies.
     Give me neither poverty nor riches.
     Feed me with the food that is needful for me (my daily bread);

     ⁹ lest I be full, deny you, and say, ‘Who is Yahweh?’
     or lest I be poor, and steal,
     and so dishonor the name of my God.

Proverbs 30:8-9 (WEB)

       Agur asks God for his daily bread—just enough. If we have too much, we become inclined to believe we did it all ourselves and begin to deny even the existence of God. It is very easy to start relying on our wealth more than we rely on God. We get too focused on our material well-being and no longer see the need for God in our lives, so we disown Him and pretend He doesn’t exist. On the other hand, if we have too little we may become inclined to steal. This would dishonor God because it is sin—against God for not trusting in Him and against our neighbors for not loving them.

       This idea of our daily bread should be quite familiar to most Christians. It’s part of the Lord’s Prayer—Jesus’ example of how we ought to pray and where our hearts should be focused when we pray. Jesus wanted us to realize that this request for our daily bread is important. Asking God for just enough, being modest and content, and not letting materialism rule our lives—these are the things that allow us to honor God sincerely in our lives. It is such an important concept that Jesus included it in His example for prayer (not to mention all the time He spent telling parables and teaching about contentment and a focus on heavenly treasures).

       We see two main practical applications here. First, we should be content with our circumstances because it is God’s will for our lives. If we’re focused on the gift of eternal salvation, we don’t have to be as worried about the things of this world. We’re free to be joyful always, pray continually, and give thanks in all circumstances. Second, we should be asking God for just enough to get by each day—not for millions of dollars, or a huge house, or a BMW—just our daily bread. We bring nothing into this world, and we won’t take anything out when we leave it. This is why Paul says we should be content if we have food and clothing (1 Timothy 6:8). That’s all we really need to get by (though a warm shelter is nice as well, it’s not completely necessary). When we start worrying about getting more than that, we take our focus off of God and put it back onto the World. And that’s a sure way to keep ourselves from fully serving God.

Note: I do not mean that we should completely neglect our material needs, but it’s all about where our hearts are focused. Wherever your treasure is, that’s where your heart will be also. So if you’re consumed with thinking about material things and wealth, your heart can’t really belong to God. That’s the only true sin, because once God gets your heart He’ll get everything else with it. It’s all He really needs from us—and that’s why it’s so vitally important that we don’t give our hearts to materialism.


Want to read the entire Bible study series on Contentment? Download your free copy of Contentment Is Wealth: A Bible Study on Contentment now!

       I pulled this out of our mail the other day:





       Seriously? Someone at the Pennsylvania Lottery must be playing a joke. Big Savings? Let me get this straight. You’re going to use a coupon to buy a lottery ticket, and that’s going to bring you big savings? Let’s think about this just a bit.

What Are Your Chances of Winning?

       Let’s use the September coupon for our example. This coupon gives you one $2 Mega Millions with MegaPlier ticket for free if you buy one $2 Powerball with Power Play ticket. Basically, this is just one set of numbers because a regular ticket costs $1 for one play and the Power Play (or MegaPlier) doubles the cost of the ticket.

       The Pennsylvania Lottery’s website says your overall chances of winning a prize with a Powerball ticket are 1 in 35.11.

       We can figure out your chances for winning any of the specific prizes with some simple math. If your chances of winning a prize are 1 in 35.11, that means you have a 2.8482% chance ((1/35.11)*100) of winning every time you play Powerball. (Not very good, huh?) Basically, you can only expect to win something once out of every 35 tickets you buy. But that doesn’t tell us how much the ticket is really worth because your prize can range from $3 to $14,000,000 (or $6 to $14,000,000 if you buy the Power Play option) given the current jackpot. To figure out the value of your ticket, we’ll need to do a little more math.

What’s Your Ticket Really Worth?

       By using the odds given for each specific prize level, we can figure out the average prize for a winning ticket. Overall, you have a 2.8482% chance to win on any given ticket. You can use the same process to figure out your chances of winning a given prize. For example, the Pennsylvania Lottery website says you have a 1 in 61.73 chance of winning the lowest prize of $3. That’s a 1.61996% chance ((1/61.73)*100) of winning $3 on any given ticket. Since you have a 2.8482% chance of winning any prize, you’d expect a little more than half of your winning tickets to have a $3 prize. (The math is simple: 1.61996/2.8482 = 0.568766 * 100 = 56.8766%.)

       Continuing this process for each prize level, we can figure out your chances of winning a specific prize any time you have a winning ticket. This table shows those chances for a regular Powerball winning ticket.

       Now we can figure out the value of a winning ticket simply by multiplying the prize by your chance of getting that prize on any given winner. Doing that tells us that the average winning ticket for regular Powerball is worth $7.65 ($8.65 – $1.00 for playing). Adding the Power Play to the mix changes the prize values, so the average winning ticket for Powerball plus Power Play is worth $24.04 ($26.04 – $2 for playing). (And technically, it would be worth a little less than that because there’s always the chance you might have to split the jackpot with someone else. But I don’t feel like finding the stats on that or doing the math.)

       That leads us to the next question. If the average winning ticket is worth $7.65 (or $24.04 for Power Play), then what is the average ticket worth? You only have a 2.8482% chance of winning that $7.65 (or $24.04). We need to take into account the cost of your losing tickets, which you’ll have 97.1518% of the time. Remember, you have to buy 35.11 tickets before you can expect to have a winning ticket (based on the odds). That leaves you with 34.11 losing tickets. If you’re playing regular Powerball, you’ll need to spend (that is, lose) $34.11 to win $7.65. If you’re playing Powerball with Power Play, you’re looking at a cost of $68.22 to win $24.04.

       Our last bit of math will tell us the average value of any given ticket. Let’s check regular Powerball first. On average, you’ll spend $34.11 to win $7.65 leaving you with an overall loss of $26.46. Divide that by the total number of tickets you had to buy (35.11) and you’ll find that the average regular Powerball ticket is worth -$0.75. To put it another way, instead of buying a $1 Powerball ticket you might as well throw three quarters in the trash. (Oh wait, I forgot…the Pennsylvania lottery benefits older residents – every day. So maybe you should just donate the three quarters instead.)

       What about Powerball plus Power Play? It certainly looks like a more attractive value proposition at first glance since the average winning ticket is worth so much more. On average, you’ll spend $68.22 to win $24.04 leaving you with an overall loss of $44.18. So that means the average Powerball plus Power Play ticket is worth -$1.26. This time, instead of donating three quarters rather than buy a Powerball plus Power Play ticket you should donate five quarters! In terms of absolute dollars, you lose more with Power Play but the % loss is better than regular Powerball. (In regular Powerball, you lose 75% of your money forever. With Power Play, it’s “only” 63%. Granted, it starts looking a little better when the jackpot is very large, but your chances of splitting the prize increase as more people buy tickets. This means the lottery is always going to be a losing bet.)

       Let’s put this all into a little perspective. Buying a Powerball lottery ticket would be the equivalent of getting a $10,000 gift, going out into your back yard, and then proceeding to burn $7,500 of it for “fun”. Big Fun – according to the Pennsylvania Lottery.

You Want Big Savings? I’ll Show You Big Savings.

       I’m not going to take the time to prove that the lottery (in any form) is a waste of your money. You can simply look at the July 2009 – June 2010 annual income and expense report from the Pennsylvania Lottery to see that they only end up paying out about 61% of their total sales to winners. Talk about a great business! I’d take a 30% net profit margin any day. (The other 9% goes to other expenses.)

       Looking at those numbers from the other end, we see that lottery players as a whole are buying something with a guaranteed return of -39%! You want big savings? Here’s a thought. Stop paying the poor people’s tax.

       Today’s Personal Finance Bible Scripture comes from Matthew 16:26.

       ²⁶ And what do you benefit if you gain the whole world but lose your own soul? Is anything worth more than your soul?

Matthew 16:26 (NLT)

       Jesus is asking us to consider everything in light of eternity. What good will it do us if we gain everything in the world but end up losing our souls in the process? How happy are you going to be if you work extremely hard all your life so you can have an amazing house, nice cars, and two European vacations every year, but you end up with an unhappy family in the process?

       Or what if you give up your passion to take a job you really hate because you can get paid four times as much? Do you think early retirement from the job that makes you miserable is going to make up for the years you neglected your true passion? Most people don’t even manage to save that higher income so they can later pursue their passion. Lifestyle inflation creeps up and they end up working in a job they hate for 30-40 years.

       The things The World offers us often fail to satisfy us when we finally get them, and they often come at the cost of relationships and true happiness, satisfaction, meaning, and purpose. The Gift of Jesus allows us to experience true wealth in this life while revealing our true purpose as well. And we don’t have to sacrifice our relationships to receive that Gift. However, we can only fully receive Jesus’ Gift when we give up our own dreams, desires, goals, wishes, and The World’s message. To find the Good Life, we must give up this life and fully submit to God’s plan for us.

       The Silicon Valley Blogger (SVB) had a post up Friday about MonaVie and the ongoing drama that Lazy Man and Money faces as he tries to expose it for what it really is. If you’ve been approached by someone selling MonaVie’s miracle juice, I strongly encourage you to read what Lazy Man has written about them.

       I left a comment on SVB’s post that I wanted to share with you all. She asked for thoughts on MLM, MonaVie, and the like. Here’s what I had to say:

My thoughts on MLM? I HATE IT!

I hate that people relentlessly pursue their family and friends (and their family and friends) just to try to make a quick buck (with a shoddy or overpriced product).

I hate the social obligation that we often feel to support people doing the above.

I hate that people get sucked in to what they think is a “real” business when all it really does is suck up their money and pass it up the line.

I hate the brainwashing that makes it impossible to talk any sense into your family and friends.

I hate all the wasted time and resources that go into these things when people could do so much more on their own or even just with a reputable company.

I say more power to Lazy Man! If he gets only one person to turn away from MonaVie (or any other MLM), he’s done the world a favor!!!

(Side Note: I think Primerica is another terrible offender in this arena because of the damage they and their products can do to unsuspecting consumers. I’ve seen this first-hand with my own mother.)

Now let’s see how many of your readers have already joined the MLM cults.

       Maybe I’m being harsh, but I just don’t have much tolerance for these shams – I mean, wonderful opportunities to become your own boss…

       What do YOU think about MLMs (any of them)? Let me know in the comments below! I’ll be happy to discuss this with anyone who wants to talk about it.

       P.S. If you’re considering getting involved in a MLM or buying from someone who is, I’d be glad to talk with you for free. Maybe we could find a better business model for you or look at the true value of what you’re about to buy.

       Here are links to the carnivals I was in this week:

• Carnival of Financial Planning – How to Create a Balance Sheet, or How to Calculate Your Net Worth

 

• Carnival of Personal Finance – I Am More Than My Income

 

• Festival of Frugality – Personal Finance Bible Study: Contentment (Part 7 of 12) – Practical Applications

       Here are a couple interesting articles I found this week that I’d like to share with you:

• Personal Finance by the Book – Does the Bible Teach Communism? – [I thought Joe did a good job looking at whether or not the Bible teaches communism. Many people assume this based on the actions of the early church, but Joe points out why it's not necessarily the case. I think generous, selfless giving is clearly taught, but I have to agree with Joe that this is not the same as communism.]

 

• Early Retirement Extreme – Slaying the “enough” dragon – [Slaying the "enough" dragon, or finding contentment, is so essential to financial success. But as you know since I've said it so much before, finding contentment is key to your spiritual success as well. Namely finding contentment in Christ is the only true path to success.]

       Have a great weekend!

       In the last part of this series, we started talking about practical applications when we take on God’s View of the World, Money, and our lives. How should we act and what should we do when we take on God’s View and live out His will? We’re continuing that discussion today.

       Without God’s View, we tend to worry—a lot. Even after we begin to fully follow Him, we still worry. Why do we worry? Because we haven’t begun to rely on God and trust in His goodness. But in Luke 12:22-31, Jesus tells us not to worry about worldly cares:

Do Not Worry

       ²² He said to his disciples, “Therefore I tell you, don’t be anxious for your life, what you will eat, nor yet for your body, what you will wear. ²³ Life is more than food, and the body is more than clothing. ²⁴ Consider the ravens: they don’t sow, they don’t reap, they have no warehouse or barn, and God feeds them. How much more valuable are you than birds! ²⁵ Which of you by being anxious can add a cubit to his height (or an hour to your life)? ²⁶ If then you aren’t able to do even the least things, why are you anxious about the rest?

       ²⁷ Consider the lilies, how they grow. They don’t toil, neither do they spin; yet I tell you, even Solomon in all his glory was not arrayed like one of these. ²⁸ But if this is how God clothes the grass in the field, which today exists, and tomorrow is cast into the oven, how much more will he clothe you, O you of little faith? ²⁹ Don’t seek what you will eat or what you will drink; neither be anxious. ³⁰ For the nations of the world seek after all of these things, but your Father knows that you need these things. ³¹ But seek God’s Kingdom, and all these things will be added to you.”

Luke 12:22-31 (WEB)

This passage is also found in Matthew 6:25-34.

       We can spend a lot of time worrying about the what-ifs in our life. What if I lose my job? What if I get a terminal illness? What if I can’t retire? What if I die? But do we help anything by fretting over these things that may never happen? Even if they do happen, is there anything we can do to stop them from happening? In truth, there’s little good that can come from worrying, so why do it?

       Instead of worrying about all possible future disasters, we should be focused on only one thing: seeking God’s kingdom. God knows what our needs are, and He will take care of us. Once we begin to rely on God and trust in His goodness, we can allow Him to provide the things we need. But until we let God change our hearts so we can fully trust Him, we will be so preoccupied with worry that we won’t be able to seek His kingdom and see His blessings in our lives.

       Does this mean we shouldn’t plan ahead for anything, or that we shouldn’t save for emergencies? Not at all. But it does mean that we shouldn’t be so worried about the cares of this life that we’re prevented from fully pursuing God’s kingdom. We should be so intensely focused on serving God and serving others that our worldly needs rarely cross our minds.

       Once we fully trust in God’s providence, we can begin to see that we have nothing to fear in this life. There are no worries to concern ourselves with when we’re fully resting in the Father’s arms.

       ⁵ Be free from the love of money, content with such things as you have, for he has said, “I will in no way leave you, neither will I in any way forsake you.” ⁶ So that with good courage we say, “The Lord is my helper. I will not fear. What can man do to me?”

Hebrews 13:5-6 (WEB)

       God has promised that He will never leave or forsake us. He is always there to help us, and He always will be. We may not always understand how He’s working in our lives, and we may not see Him when He’s by our side. But He has promised that He will always take care of us. With a promise like that from the Creator of the entire universe, what do we really have to fear? What can we possibly worry about? God is in charge, and He’s taking care of everything for us.

       So how do we use this practically? Realize that once you fully submit yourself to God and His will for your life, He will take care of all your needs. Plan for what you know (like retirement and random emergencies). Take control of the things you can actually control (like your spending and attitude, not the economy or the government). And leave the rest to God. If you belong to God, what can happen to you in this life that can ruin you forever? Even death has no power, because once you die you’ll be with God for eternity. The presence of God is the only thing we need ever concern ourselves with in this life.


Want to read the entire Bible study series on Contentment? Download your free copy of Contentment Is Wealth: A Bible Study on Contentment now!