Archives For December 2009

       If your income falls in the low to middle range, you can get your tax returns prepared for free. How? By using AARP’s Tax-Aide Program.

What Is AARP Tax-Aide?

       AARP Tax-Aide is the nation’s largest, volunteer-run tax preparation and assistance program. It’s part of the IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) Programs. It is available to taxpayers with low and moderate incomes and gives special attention to people age 60 and older.

How Low Does My Income Need to Be?

       The IRS refers to moderate income as $50,000 or lower, but as an AARP Tax-Aide volunteer I can tell you this guideline is loosely followed. If you make $60,000/year, you’ll probably still be able to get help.

Not for Complex Returns

       If you have rental properties, a Schedule C (not C-EZ), a complex Schedule D, a Schedule F, or an otherwise complicated tax return, then AARP Tax-Aide (or any VITA program) is not for you. You should hire an experienced tax preparer – preferably a CPA.

Where Can I Go for Help?

       If you’d like to find an AARP Tax-Aide location near you, you can find one on their website starting in late January. If you can’t find an AARP Tax-Aide location near you, you can try calling 1-800-829-1040 to locate a VITA location near you.

How Well-Trained Are the Volunteers?

       AARP does not let just anyone volunteer for the Tax-Aide program. All volunteers are required to undergo a thorough training course mandated and created by the IRS. They are well-trained in how to handle the 1040 Form and the standard schedules.

       You may also find that many of the volunteers have a background in tax preparation or finance. For example, I volunteer and I’ve had two years of professional tax preparation experience. The local coordinator for my volunteer site was a CPA before she retired, and we had at least one other CPA volunteer last year. So the help you get may be quite good.

Can I File Electronically (E-file)?

       Electronic filing with direct deposit is the fastest way to get your tax refund from the IRS. Most AARP Tax-Aide sites offer electronic filing with no charge to the taxpayer. Many more sites are gaining the capabilities to e-file every year.

What If I Just Have a Tax Question?

       AARP offers free, year-round tax assistance via the Web for 24/7 help. You can find more information at the AARP Tax-Aide website.

I’d Like to Help! How Can I Volunteer?

       If you’d like to volunteer with AARP’s Tax-Aide program to help with the 2009 tax season, there’s still plenty of time. Go to their website to read more about becoming a volunteer and to fill out a volunteer form.

Tithing in the Bible: Summary

Corey —  December 16, 2009

       Last week, I finished my series on Tithing in the Bible where we looked at every single Bible verse that talks about tithing. The purpose was to see what God’s Word says about tithing and to compare that with what is taught in the church today. What we found was that men have twisted the Bible’s teaching on tithing and giving out of ignorance or ulterior motives. They’ve added to the Bible’s definition and explanation of tithing to make it fit their own ideas. This post is a summary of what we learned from the Scriptures about tithing. You can click the titles of each heading to read the entire post relating to those verses.

Abram’s Example – Genesis 14:18-20

  1. Abram gave 10% to Melchizedek only from the spoils of war – not his own money.

  3. Abram gave the remaining 90% of the spoils of war to the King of Sodom.

  5. Abram only gave a tithe once that we know of. We have no other examples of tithing as Abram’s model for giving.

  7. Abram’s example was never used in the New Testament to teach Christians how much they should give.

  9. The Bible does not say that Abram was commanded by God to give the tithe to Melchizedek.

       Conclusion: Abram’s example of tithing to Melchizedek does not set a precedent for Christians to follow.

Jacob’s Example – Genesis 28:20-22

  1. Jacob’s promise to tithe was completely conditional. He told God that he would tithe if God would bless him.

  3. God did not ask Jacob to give a tithe. Jacob chose to promise it to Him (again, only if God would bless him).

  5. Jacob would not have had a local temple (church) to give his tithe to. Neither would God have taken the tithe directly from Jacob – He does not need it. Jacob would most likely have given his tithe directly to the poor and needy or in showing hospitality to strangers.

       Conclusion: Jacob’s example of tithing is not taught by tithing advocates because it was completely freewill, conditional, and would not support the idea of giving your tithe to your local church. It also does not set a tithing requirement for Christians to follow because it was Jacob’s choice – not God’s commandment.

The Tithe is Holy to the Lord – Leviticus 27:30-33

  1. Many other aspects of the Law were considered “holy to the Lord”, including: grain offerings, sin offerings, trespass offerings, the feasts, holy days, the sanctuary, the high priest’s crown, the priests’ clothes, and the fruit a tree produces in its fourth year.

  3. The tithe only came out of increases from the land, flocks, and herds – not income the Israelites earned in any other way. The tithe was only food and never included money.

  5. The tithe was not the best tenth. The tithe of the herds and flocks was the tenth animal to pass under the shepherd’s rod, and the shepherd was not allowed to change it. The tenth animal could have been the best or the worst.

       Conclusion: These verses do not establish the tithe as an eternal statute for all who follow God merely because it was considered “holy to the Lord”. There are several other Old Testament statutes we should be keeping if that is our method of discerning eternal statutes. Also, modern tithing advocates twist the Scriptures to include money in the tithe instead of just food and to teach that the tithe should be your best 10%.

The Statute of Tithing – Numbers 18:20-32

  1. The tithe was instituted among Israel to provide specifically for the priests and the Levites.

  3. In exchange for the right to receive offerings and tithes, the priests and the Levites had to give up all rights to inheritance or land ownership.

  5. The Levites – not the priests – received the tithe from Israel.

  7. The Levites then gave the priests a tithe of the tithes, or 1% of all Israel’s agricultural increase.

  9. The tithe was still only food items and never included money.

       Conclusion: The tithe does not apply to Christians because it was specifically for the Israelites to support the Levitical priesthood. Christ’s death abolished that priesthood and replaced it with a priesthood of believers with Christ as the high priest. Tithing advocates do not teach that those who receive the tithe should give up inheritance and land ownership rights or that the priests should only receive 1%. Again, the tithe only contained food items and not money.

Eating Your Tithe – Deuteronomy 12, 14, & 26

  1. Tithing is just one among many statutes and ordinances the Israelites were commanded to observe.

  3. The Bible talks about eating your tithe before God which is never taught today. It also means the tithe was only food and not money. Israelites were only allowed to use money if the journey to the Temple was too long for them to carry their tithe. Once they arrived at the Temple, they had to use that money to buy food and drink so they could celebrate before God.

  5. This could have been a second tithe (the festival tithe), which means the Israelites tithed at least 20%.

  7. The Bible also talks about tithing every third year (the poor tithe). This tithe was kept within each Israelite city to care for the poor. It did not go to the Temple.

       Conclusion: Tithing advocates do not teach that Christians should observe all of the statutes and ordinances of the Law – only tithing. They also don’t teach about eating your tithes or giving your tithes directly to the poor. They usually teach that you should give it directly to your local church. These are not Biblical teachings.

2 Chronicles 31

  1. The tithe was still only food items from Israel’s agricultural increase. That’s why the tithing stopped after the seventh month – the harvest was over for that year.

  3. The Temple was not the storehouse for all the tithes – reinforcing the fact that only 1% went to the Temple and the Levites kept the other 9% in the Levitical cities where they lived.

       Conclusion: Again, those who teach tithing today twist the Scriptures to make it include money even though the Bible says it was only food.

Background for Malachi – Nehemiah 10, 12, & 13

  1. The blessings promised by the Law required the Israelites to keep all of God’s commandments, statutes, and ordinances. Breaking any one of those meant you were cursed under the Law.

  3. Again, the tithe went to the Levites and then they gave a tithe of the tithes to the priests. It didn’t all go to support the priests – only 1% did while the remaining 9% went to the Levites.

  5. During the time of Nehemiah and Malachi, the priests were often guilty of breaking the Law and stealing the tithes by not giving the Levites their portion while they were serving at the Temple. This gives us some background for what we read in Malachi.

       Conclusion: Christians are not under the curse of the Law because Christ has taken away that curse. This is important to understand before reading Malachi 3:8-12. Many have misinterpreted those verses and told Christians they will be cursed if they do not tithe.

Malachi 3:8-12

  1. God required the Israelites to keep all of His commandments, statutes, and ordinances – not just those concerning tithing.

  3. If the Israelites failed to keep all of the Law, they were cursed with “the curse” – even if they only failed in one point of it.

  5. The tithe was still only food.

       Conclusion: Teaching Christians that they will be blessed if they tithe or cursed if they don’t completely ignores Christ’s sacrifice. We are no longer under “the curse” of the Law but have been freed from death by Christ’s blood. Therefore, Christians will not be cursed if they do not tithe, and the promise of blessing in this passage does not apply to us. It was for the Israelites only.

       Note: I did not include Amos 4:4-5 in this study because it barely mentions tithing and is not relevant in our study.

Did Jesus Teach Tithing? – Matthew 23:23 & Luke 11:42

  1. Jesus was under the Law and so were the Pharisees He was speaking to. The New Covenant did not begin until after Jesus died, so He would not have taught the Pharisees to break the Law. However, Jesus never taught Gentiles to keep the laws or statutes that applied specifically to the Israelites (like tithing and ceremonial cleansing rituals). Christians are not under the Law of Moses; therefore, we are not required to tithe.

  3. The tithe still only contained food and never money.

  5. You can tithe and still be sinning. God held justice, mercy, faith, and sharing His love as higher and more important than whether or not an Israelite tithed. He still feels that way today. God would rather have us actually live a holy life than to have us tithe and feel holy even though we neglect the more important things.

       Conclusion: Jesus was not advocating tithing for all of His followers for all time. He was speaking to a specific group of people who were under all of the Law of Moses. He used this time to teach us that love trumps giving every time. It is foolish to think that tithing will save us or that failing to tithe will condemn us.

Boasting about Tithing – Luke 18:9-14

  1. Jesus used this parable not to support tithing but to condemn the self-righteous. God will humble us if we boast in the things we do, and He will exalt those who humble themselves.

  3. Tithing is only mentioned twice in the Gospels, but Jesus takes many occasions to teach about generous giving to the poor.

       Conclusion: We should look at all of Jesus’ teachings about giving to determine God’s will for Christian giving. He spoke more about generous giving than tithing. Even when He talked about tithing it was not in a positive light.

Change of the Priesthood, Change of the Law – Hebrews 7

  1. This is the only time tithing appears after Jesus’ death.

  3. Jesus’ high-priesthood is superior to and replaces the Levitical priesthood.

  5. Since the Levitical priesthood has been replaced so has the Law that was instituted under it. Christians are not under the Law of Moses.

  7. We have a better hope through the high-priesthood of Jesus and His sacrifice. We have a better hope for salvation that comes through faith in Jesus – not in keeping the Law of Moses. And we have a better hope for giving that’s based on a close relationship with God through prayer and the guidance of the Holy Spirit – not on percentages.

       Conclusion: God has created a better covenant with Christians that allows us to draw near to Him through Jesus. We shouldn’t place ourselves under the statutes of an inferior Old Covenant when God desires a deeper relationship with us through His New Covenant.

New Covenant Giving

       In our study of tithing, we’ve seen that modern tithe teachers have grossly misrepresented what the Bible says about tithing. Tithing is not a requirement for Christians, and God has a better plan for Christian giving than tithing. If you want to learn more about giving under the New Covenant, check out these articles:

       I’ll also be spending more time in the future looking at Jesus’ teaching on giving and what the New Testament teaches about giving. So make sure you’ve signed up for free updates to Provident Planning if you want to learn more. If you have any questions or comments about tithing in the Bible, feel free to leave them below!

       If you’re the least bit interested in investing, I’m sure you’ve heard of ETFs (exchange traded funds) by now. They’re often touted as the lowest-cost option for investors who don’t want to pick individual stocks. Even my beloved Vanguard has begun pushing their ETFs much more than their index mutual funds – citing the lower expense ratios of the ETFs.

       But in all the fanfare about how cheap ETFs are, we seem to lose sight of the fact that you have to pay commissions when you buy or sell ETFs on the stock market. On the other hand, there is no cost to buy or sell mutual funds directly from Vanguard. There’s also the problem of bid/ask spreads on ETFs and premiums/discounts over the NAV (net asset value) of ETFs. I don’t have the data to analyze those costs, and it’s not possible to fully know the impact of those costs (because it depends on future prices as well).

       However, we can ask ourselves if the lower expense ratios on ETFs will offset the trading costs we have to pay to buy and sell them. This is a relatively easy question that just requires some math.

How Often Are You Trading?

       The more frequently you buy or sell ETFs, the more you’ll pay in trading commissions. So if you’re investing a certain dollar amount every month (also called dollar cost averaging), you’re going to pay one commission fee for each ETF in your portfolio every single month. (The same applies if you’re selling every month to generate income from your portfolio, though you probably won’t sell from every single ETF every month.)

       Those trading costs can add up very quickly and easily overcome your savings on the expense ratios.

A Cost Comparison

       Let’s use a simple example to see why you need to carefully consider all the costs involved with ETFs. We’ll assume you’re investing in a 100% stock portfolio that duplicates the world markets. That means you’d have 40% in U.S. stocks and 60% in International stocks. You could do this using Vanguard’s Total Stock Market Index and Total International Stock Index mutual funds. Or you could use Vanguard’s Total Stock Market ETF and FTSE All-World ex-US ETF. Your portfolio expense ratio for a 40% U.S./60% International mix would be:

  • Vanguard Mutual Funds – 0.28%

  • Vanguard ETFs – 0.19%

       That’s a difference of 0.09% – meaning that you’d save 0.09% of your portfolio value every year if you used Vanguard’s ETFs instead of their Mutual Funds. So what does that mean in dollars? It depends on how much you have to invest.

  • $10,000 to invest = $9 saved per year
  • $25,000 to invest = $22.50 saved per year
  • $50,000 to invest = $45 saved per year
  • $100,000 to invest = $90 saved per year

       This holds true until you have $250,000 invested, because at that point you can get a lower expense ratio on the Total Stock Market Index mutual fund – bringing the total expense ratio for the mutual fund portfolio down to 0.24% and lowering your savings to 0.05%.

  • $250,000 to invest = $125 saved per year
  • $500,000 to invest = $250 saved per year
  • $1,000,000 to invest = $500 saved per year

       So you can see the cost savings isn’t quite as great as the media makes it out to be. Yes, $500 saved is $500 saved – but you need $1,000,000 to invest before you’ll realize that kind of savings every year!

       Then we need to consider your trading costs for using the ETFs. The lowest commissions I’ve found are at TradeKing where they charge $4.95/trade or Zecco where they charge $4.50/trade. Here’s what your costs would look like for a 2 ETF portfolio if you’re using TradeKing (you’d save a little more by using Zecco):

  • Trading once per year – $9.90

  • Trading twice per year – $19.80

  • Trading six times per year – $59.40

  • Trading twelve times per year – $118.80

       So if you’re trading six or more times a year (buying or selling both ETFs in your portfolio) and you have less than $25,000 invested, you’re better off just getting the mutual funds directly from Vanguard (because you won’t have to pay trading costs). You could lower your trading costs by only buying one ETF at a time and only buying or selling once or twice a year, but that is not how most people invest.

       After you have $25,000 to invest you could use Zecco and get 10 free trades every month. But that $25,000 minimum balance for free trades applies to only one account, so if you have multiple accounts (more than one IRA, or an IRA and a taxable account) you can only get the free trades on one of them. If you’ve only got one account and you’ve got more than $25,000 to invest, then using Zecco to buy Vanguard ETFs could be a good choice. But there is a $30 annual fee for IRAs at Zecco, which will still eat into your cost savings (plus another $30 IRA closing fee if you ever decide to move to another brokerage firm). If you want to open an account at Zecco, you can go to their website.

It Only Gets Worse

       We only looked at a very basic portfolio in that cost comparison. But what if you want to invest in a more diversified portfolio or you want to add bonds? The trading costs only get higher and higher, unless, of course, you can use Zecco’s or another brokerage firm’s free trades program.

       However, as I pointed out, those free trades programs are generally quite limited and may carry other costs like annual service fees. You also have to deal with the uncertainty of whether those programs will continue. Once the terms of the free trades program changes (as they have in the past), you may end up paying a lot more in commissions than just $4.95/trade.

       You won’t run into those problems if you’re buying and selling mutual funds directly from Vanguard. And in many cases, you’re better off going that route anyway. Especially considering that the cost savings on ETFs don’t really amount to much even if you have a large portfolio. Add in those unknown costs of the bid-ask spread (probably negligible) and NAV premium/discount (could be a problem depending on when you buy/sell) and you have another variable in the equation.

Make Sure ETFs Make Sense for You

       The point of all this is not to say that you should never use ETFs. The point is that you should carefully weigh the costs of using ETFs against the savings. That’s the only way you’ll know for sure if ETFs are actually a good choice for you.

       Or you can just ignore the math, listen to all the financial “experts” on the TV, and do what they say. It’s up to you.

       Chapter 7 of Hebrews is the last example of tithing in the Bible that we are going to examine in this series, and it’s also the only mention of tithing that occurs in the Bible after Jesus’ death. For this reason, we should pay close attention to what is said here since it applies specifically to Christians.

       Hebrews is a book of better things. It talks about how Jesus and the New Covenant surpass Moses, the Law, the priesthood, and the Old Covenant. Chapter 7 in particular discusses how the high-priesthood of Jesus has replaced the Levitical priesthood. It also makes it clear that a change of the priesthood requires a change of law (from the Law of Moses to the Law of Christ). Since tithing was commanded to the Israelites as part of the Mosaic Law, it has been replaced by the Law of Christ which requires generous giving to anyone in need.

After the Order of Melchizedek

       The author of Hebrews begins chapter 7 by explaining how the high-priesthood of Jesus surpasses and replaces the Levitical priesthood. Since God declared Jesus to be a priest forever after the order of Melchizedek, the author of Hebrews uses the example of Abraham giving a tenth of his spoils of war to Melchizedek to highlight the reasons why Jesus’ priesthood is higher and better than the Levitical priesthood. You can read Hebrews 7:1-10 for the actual text, but here are the main points:

  1. The Levites only took tithes from the Israelites because of a commandment that was part of the Law that came from God. That tithe was clearly connected to the Law of Moses.

  3. Melchizedek accepted a tithe of the war spoils from Abraham and blessed him – showing that Melchizedek is “greater” than Abraham.

  5. The Levites receive tithes but die, while Melchizedek received a tithe but Psalm 110:4 testifies that the priest after the order of Melchizedek (Jesus) lives forever.

  7. We can say that Levi and all his descendants (the Levites) paid tithes to Melchizedek through Abraham.

       All of these facts indicate that a priest after the order of Melchizedek, Jesus, is higher than the Levitical priesthood. After His death, Jesus replaced the entire Levitical priesthood and became the high priest of all those who choose to follow Him. His sacrifice replaces all the sacrifices the Levitical priests made, and it is through Him that we draw near to God (where previously only the Levitical priests could draw near to God).

A Change of the Priesthood Requires a Change of Law

       This change of the priesthood necessitates a change in law, because the Law of Moses is what established the Levitical priesthood and tithing is how the Levitical priesthood was supported. If the Levitical priesthood has been abolished and replaced, then the statutes and ordinances surrounding that priesthood have also been abolished and replaced.

       11 Now if there were perfection through the Levitical priesthood (for under it the people have received the law), what further need was there for another priest to arise after the order of Melchizedek, and not be called after the order of Aaron? 12 For the priesthood being changed, there is of necessity a change made also in the law.

Hebrews 7:11-12 (WEB)

       The Law made no one perfect. If it had, then Jesus would not have needed to die on the cross for our sins. We could have simply followed the Law of Moses and received our salvation that way. But we all have sinned and no one but Jesus has kept the Law perfectly. Therefore, God chose to replace the Old Covenant with a new and better covenant through His Son. Since we now have Jesus as our high priest and we are the priesthood of believers, the Old Covenant and its rules about the Levitical priesthood (including tithing) no longer apply to us as Christians.

The Priesthood of Jesus Brings Us a Better Hope

       We no longer have high priests who are weak and just as unable as we are to avoid sin. Instead, we have Jesus as our high priest forever. And it is through Him and the hope that He brings that we can draw near to God.

       18 For there is an annulling of a foregoing commandment because of its weakness and uselessness 19 (for the law made nothing perfect), and a bringing in of a better hope, through which we draw near to God.

Hebrews 7:18-19 (WEB)

       By so much, Jesus has become the collateral of a better covenant.

Hebrews 7:22 (WEB)

       We no longer seek righteousness through the Law but through Jesus. We claim redemption of our sins through the blood of Jesus (an eternal sacrifice) and not through animal sacrifices. These are ways the New Covenant is better than the Old.

       In the same way, we no longer determine our giving based on the Old Covenant statute of tithing. We are to be led by the Spirit to be generous, cheerful, and sacrificial givers to the poor and needy. How is Spirit-led giving better than tithing? Because we must draw near to God through Jesus under the guidance of the Holy Spirit to know His will for our giving. You can’t figure out how much you should give by using a simple calculation. New Covenant Giving requires a close relationship with God, constant prayer, and careful discernment in order to glorify Him. Giving becomes a continual act of worship – we seek God’s will through prayer, we give according to His will, and then we repeat. This is a process that draws us nearer to God and helps us become more like Jesus.

Why Go Back?

       Now that we have a New, Better Covenant, why would we choose to go back to the Old? When you choose to limit how you give by the Law of Moses you are rejecting the guidance of the Holy Spirit and God’s desire for New Covenant Giving. Allow God’s Word to teach you how He wants you to give according to the teaching of Jesus and the examples we have in the New Testament. Here are a few articles that outline New Covenant Giving principles for Christians:

       Seek the guidance of His Spirit before deciding how much you should give. His will for you may be to give much more than just 10% or it may be to give less or nothing at all depending on your circumstances. Let God determine how much you should give instead of leaving it up to arbitrary percentages.

Why I Use Vanguard

Corey —  December 10, 2009

       Last week, I outlined my reasons for using and recommending index funds. Today, I’m going to give you my reasons for using and recommending Vanguard‘s index mutual funds in particular. I don’t have any affiliation with Vanguard. I have just found them to have a great product and great service, so I feel comfortable recommending them to you. There are no affiliate links in this post, and nobody paid me to write this.

Low Costs

       On average, Vanguard has the lowest cost index funds available in the market. Yes, there are a few competitors like Schwab and Fidelity who beat Vanguard’s expense ratio on the S&P 500 index fund. But that’s generally the only index fund category where anyone comes close to Vanguard’s low expenses. By and large, Vanguard beats the pants off everyone else who offers index funds.

       In addition to their low-cost index funds, Vanguard charges no commissions when you purchase their mutual funds directly through them. They also won’t eat you alive with account fees. They only fee they charge is $20 for each fund where your balance is less than $10,000, but they’ll waive this fee if you sign up for electronic delivery of your statements!

       Three of their mutual funds have purchase fees, but these are only international funds and the fees are below 0.75%. These fees are used to offset the costs of purchasing international companies. (However, I don’t recommend using any of the funds with a purchase fee.) Several of their mutual funds have redemption fees, but I only recommend three of these. Within the three I recommend, two of them don’t have a redemption fee after 2 months and the other one doesn’t have a redemption fee after one year. The redemption fees Vanguard charges are all meant to discourage active investors from short-term trading in Vanguard’s funds. This is good for the long-term investor because short-term investors create extra costs for everyone else when they actively trade in mutual funds. (Those extra costs would include trading costs and tax costs.)

       It’s hard to beat Vanguard when it comes to low costs, and that’s because of my second reason for using them.

Client Owned

       Vanguard is different from the other mutual fund companies because it’s not publicly traded or privately owned. Vanguard is owned by the mutual funds it manages, and those mutual funds are owned by the clients. So Vanguard works like a credit union for mutual funds.

       What does this mean for you? It means Vanguard has no conflicting interests. Their main goal is to keep your costs as low as possible – not to give big profits to private owners or dividends to stockholders. Vanguard keeps the interests of it’s mutual fund shareholders in mind and always seeks ways to provide great service while keeping costs low. Those low costs mean you get to keep more of your investment dollars.

Excellent Customer Service

       Vanguard has a long history of excellent customer service. When you call, you’ll speak to a human in less than a few minutes. I’ve only had great experiences with their customer service representatives, and they always seek to help you with any problems you might encounter. Even if they didn’t have such low costs, you’d probably consider using them just for their customer service.

Extensive Selection of Index Mutual Funds

       Vanguard has the largest selection of index mutual funds available, which means I can easily construct a diversified portfolio with low-cost funds. This factor also plays into the low cost point I explained above. You see, when you go to Schwab or Fidelity for index funds you’ll find one of two things:

  1. They charge much higher fees than Vanguard on their other index funds.

  3. They don’t have many other index funds to choose from.

       For other mutual fund companies, their low-cost index funds are a loss-leader. They use the promise of a 0.07% expense ratio on their S&P 500 index fund to suck you into buying their 1% expense ratio funds for other asset classes. Think of it like a sale at the grocery store. The hot dogs are half price, but they’ve marked up the buns, ketchup, mustard, and relish.

       Vanguard has more index funds than anyone else and they’re consistently low cost. There are no loss leaders here.

No Noise

       Finally, Vanguard doesn’t bombard you with useless financial noise. They don’t come on TV (another reason they have such low costs) telling you that you should meet with an advisor now to buy more because the market’s going up or to sell more because the future is so bleak. If you check out Vanguard’s website, you’ll see that they teach you to focus on the long-term and watch your costs. They’ll tell you to avoid:

  • Trying to time the market

  • Worrying about day-to-day price changes

  • Trading for the short term

  • Listening the the market “noise”

       That’s the same thing you’ll hear from me, The Oblivious Investor, and others who don’t have a vested interest in selling you something that’s overpriced or making you think they can “beat the market”.

       So those are my reasons for using Vanguard. If you want to figure out how to invest in a diversified, low-cost portfolio of index funds at Vanguard, I recommend checking out my free Vanguard portfolio allocator. It provides portfolio advice based on your age and the amount of money you have available to invest. If you’ve used Vanguard in the past, let me know about your experience in the comments!

       The Gospels only mention tithing twice: once in Matthew 23:23 & Luke 11:42 (parallel verses) and once in Luke 18:12. Both times, Jesus condemns the Pharisees who believed they were righteous because of how carefully they tithed. The Pharisees believed tithing was more important than doing justice, showing mercy, having faith, or sharing the love of God. But Jesus attacked their hypocrisy and the wrong attitudes in the held in their hearts. Jesus explained that God cares more about how you love others and what is in your heart than about how carefully you follow the tithing laws.

       9 He spoke also this parable to certain people who were convinced of their own righteousness, and who despised all others. 10 “Two men went up into the temple to pray; one was a Pharisee, and the other was a tax collector. 11 The Pharisee stood and prayed to himself like this: ‘God, I thank you, that I am not like the rest of men, extortioners, unrighteous, adulterers, or even like this tax collector. 12 I fast twice a week. I give tithes of all that I get.’ 13 But the tax collector, standing far away, wouldn’t even lift up his eyes to heaven, but beat his breast, saying, ‘God, be merciful to me, a sinner!’ 14 I tell you, this man went down to his house justified rather than the other; for everyone who exalts himself will be humbled, but he who humbles himself will be exalted.”

Luke 18:9-14 (WEB)

Condemning the Self-righteous

       Jesus did not use this parable to support the idea that only those who tithe would go to heaven. Instead, He explained that those who exalt themselves above others and believe themselves to be righteous because of the things they do will not be justified before God. Rather, we are to humble ourselves and accept the righteousness that comes by faith in Him.

       The Pharisees looked down on others because they felt that they were the only ones keeping the tithe correctly. They used very strict rules about tithing and made it a point to tithe even the tiniest herbs that grew in their gardens. Since most other Jews did not observe the tithing statutes so strictly, the Pharisees believed they were more righteous than everyone else.

       I see this today among those who believe Christians are bound to tithe if they are to glorify God. Among those who support tithing as a requirement for Christians, you have some who believe you must tithe on your gross income and others who believe you can tithe on your net income (after taxes). The gross-tithers often seem to have the same attitude toward the net-tithers as the Pharisees had toward the other Jews. Tithing on your gross income is obviously more righteous than just tithing on your net…

       Again, those who believe tithing is a requirement for Christians and practice it themselves often believe themselves to be more righteous than those Christians who do not tithe. I have seen numerous comments on blogs and forums where tithers condemn Christians who do not tithe. I’ve seen people say that the church (their church) is only able to keep going because of their tithes and those who do not tithe are just “free-loaders”.

       Tell me, after reading Luke 18:9-14, what do you think Jesus would say about such attitudes? Those who exalt themselves will be humbled. I don’t care if you believe tithing is a requirement for Christians or not – if you boast in your giving and believe you are more righteous than others because of how much you give, you will not be justified before God! God is more concerned with the state of your heart than He is with how much you give. We see this reflected in Jesus’ words in the Sermon on the Mount.

       23 “If therefore you are offering your gift at the altar, and there remember that your brother has anything against you, 24 leave your gift there before the altar, and go your way. First be reconciled to your brother, and then come and offer your gift.”

Matthew 5:23-24 (WEB)

       God desires that you offer your gifts with a humble, pure heart. The gift given with self-righteousness, unforgiveness, or neglect of God’s love will not be honorable to God.

No Support of Tithing

       As I said before, the Gospels only mention tithing twice – here and in Matthew 23:23 & Luke 11:42 (which discuss the same event). When Jesus taught about giving He never said “tithe and you’re good”. Instead, He focused on making sure your heart is right before God – humble and sharing His love. He told us to give generously and freely to anyone who asks. He told us to give to the poor – not the rich. When He taught about the Law, He rejected legalistic interpretations of God’s Word and taught us to live according to God’s nature by seeking the guidance of His Spirit.

       To understand what I mean, read the Sermon on the Mount (Matthew 5-7). Every time Jesus teaches about the Law he starts by saying, “You have heard that it was said…but I tell you…” Where the Law says “Do not murder.”, Jesus says “Don’t even get angry with another person.” Where the Law says “Do not commit adultery.”, Jesus says “Don’t even think sexual thoughts about (lust after) another person.” This pattern of teaching shows that Jesus desires us to strive not just for some minimum standard – He wants us to seek God’s nature and conform ourselves to Him.

       Now let’s apply that same line of reasoning to giving. Where the Law says “You shall tithe all the increase of your fields and livestock.”, what would Jesus say? Perhaps He would tell us to give to anyone who is in need as much as we are able. Although He didn’t give us any teaching about tithing in the Sermon on the Mount, He often spoke of giving to poor and needy throughout His ministry. That alone should give us some indication as to the type of giving God is interested in. Yes, we may need to support our churches and those who labor in teaching and preaching the Word, but meeting the needs of the poor and showing them love are far more important to God than buildings or giving to people who have more than they need.

       Consider this, would God rather we feed, clothe, and shelter a poor, homeless person or have us go to a religious conference? Would God rather that we give water to the thirsty or build bigger churches?

       I’m not saying these are always either/or questions or that it’s wrong to go to religious conferences or build bigger churches. I’m simply saying that the needs of the poor hold a special place in God’s heart. We know that through His Word and through the life of Jesus. And if we are to reflect His nature and become like Him, we must approach giving with the same mindset – a mindset focused on needs and not legalistic requirements. We must look at how we can meet the needs of the poor by carefully examining our own needs and wants.

Only One More

       We have just one more Scripture to examine about tithing, and then I’ll finish up with a summary post of what we’ve learned so far. Please feel free to share your thoughts so far in the comments below!

       There are only two places in the New Testament that tithing advocates can go to find any support of the idea that Christians should tithe: Matthew 23:23 and Luke 11:42. However, we’ll quickly see why these verses do not apply to Christians. Both of these verses discuss the same event – Jesus declaring the woes to the Pharisees and scribes for believing that carefully observing the Law in some things would bring righteousness while they continually neglected the Law in the more important matters. Here are the verses:

       23 “Woe to you, scribes and Pharisees, hypocrites! For you tithe mint, dill, and cumin, and have left undone the weightier matters of the law: justice, mercy, and faith. But you ought to have done these, and not to have left the other undone. 24 You blind guides, who strain out a gnat, and swallow a camel!”

Matthew 23:23-24 (WEB)

       But woe to you Pharisees! For you tithe mint and rue and every herb, but you bypass justice and the love of God. You ought to have done these, and not to have left the other undone.

Luke 11:42 (WEB)

       Tithing advocates use these verses to teach Christians that Jesus commanded us to tithe. He clearly says that you should not have left the other (referring to tithing) undone. But interpreting and applying these verses to mean that Christians should tithe completely ignores some very important facts surrounding these Scriptures.

Jesus Was Under the Law

       The first thing we have to understand when we look at these verses is that the New Covenant did not begin until Jesus died on the cross. These verses occur in the context of the Old Covenant and were directed to people who were still under the Old Covenant. Jesus was born under the Old Covenant and under the Law of Moses, as were all the Jews who were alive during Jesus’ life. It was necessary for Jesus to be born under the Law and to keep it perfectly so He could serve as the perfect sacrifice to cover the punishment of our sins.

       4 But when the fullness of the time came, God sent out his Son, born to a woman, born under the law, 5 that he might redeem those who were under the law, that we might receive the adoption of children.

Galatians 4:4-5 (WEB)

       During His life, Jesus kept the entire Law perfectly and by His death He redeemed us from the punishment of the Law. Through Him we receive the adoption of children and become God’s very own children. This would not have been possible if Jesus had not kept the Law. And Jesus would not have been keeping the Law if He had not taught others who were still under the Law to keep it as well.

Jesus Was Speaking to Those Who Were Still Under the Law

       It should also be very clear to us that Jesus was explicitly speaking to those who were still under the Law when He said they should tithe. Who was He speaking to? The scribes and Pharisees – Jews who were required to keep the Law. Jesus would never have taught the Jews to break the Law, and He would have never imposed the Law on Gentiles who were not part of the Old Covenant.

       Consider all the times Jesus healed people. The only times we ever see Him command people to go show themselves to the priests and make the appropriate sacrifice are the times when He is speaking to Jews. He never tells Gentiles to do this. Why? Because only the Jews were under the Law! If we were to follow everything Jesus said, we would still be bringing sacrifices to the altar and following the cleansing rituals required by the Law of Moses. Consider these words of Jesus:

       23 “If therefore you are offering your gift at the altar, and there remember that your brother has anything against you, 24 leave your gift there before the altar, and go your way. First be reconciled to your brother, and then come and offer your gift.”

Matthew 5:23-24 (WEB)

       2 Behold, a leper came to him and worshiped him, saying, “Lord, if you want to, you can make me clean.” 3 Jesus stretched out his hand, and touched him, saying, “I want to. Be made clean.” Immediately his leprosy was cleansed. 4 Jesus said to him, “See that you tell nobody, but go, show yourself to the priest, and offer the gift that Moses commanded, as a testimony to them.”

Matthew 8:2-4 (WEB)

       Do we still take sacrifices and offerings (as required by the Law of Moses) to the altar? Do we require lepers and any others who would be ceremonially unclean to follow the cleansing rituals required by the Law of Moses? Why not? Jesus commanded those things to be done here in these verses. Why would we choose to continue enforcing tithing only and not these other things which Jesus told the Jews to do? Clearly, something is missing in such an application of Matthew 23:23 and Luke 11:42.

Christians Are Not Under the Law of Moses

       The reason this command does not apply to Christians is because we are not under the Law of Moses. We have received the adoption of children and have become the children of God – and this is through faith in Jesus. We live under grace and not the Law. We are justified by faith – not the Law! Any who choose to receive justification under the Law have rejected Jesus as Lord:

       1 Stand firm therefore in the liberty by which Christ has made us free, and don’t be entangled again with a yoke of bondage. 2 Behold, I, Paul, tell you that if you receive circumcision, Christ will profit you nothing. 3 Yes, I testify again to every man who receives circumcision, that he is a debtor to do the whole law. 4 You are alienated from Christ, you who desire to be justified by the law. You have fallen away from grace. 5 For we, through the Spirit, by faith wait for the hope of righteousness. 6 For in Christ Jesus neither circumcision amounts to anything, nor uncircumcision, but faith working through love.

Galatians 5:1-6 (WEB)
emphasis mine

       What good was Christ’s sacrifice if we still seek to be justified based on how well we keep God’s Laws? If you believe that Christians who do not tithe will be under “the curse” (which, by the way, is death), then why do we need Christ? All we’d need to do is tithe (and keep the other 600+ commandments in the Law) and we’d have eternal life. If you desire to live under the Law, then you’re really desiring to live a life apart from faith in Christ. Your faith is in the Law and its ability to save you.

       But we are not called to live under the Law of Moses. We are living under the Law of Christ. And the Law of Christ is a law of freedom from the punishment that is due to us (the curse, death, eternal separation from God), grace to be led by the Spirit, and justification that comes through faith in Christ (not through the Law of Moses).

       Does this mean that I’m saying Jesus abolished the Law of Moses or that the Law was not good? Does this mean we’re free to sin as much as we want? No! Jesus fulfilled the Law by calling us to serve under the Spirit and not the letter. He covered the debt of death that we owed to God for our sin and freed us to live the Law of Love.

       13 For you, brothers, were called for freedom. Only don’t use your freedom for gain to the flesh, but through love be servants to one another. 14 For the whole law is fulfilled in one word, in this: “You shall love your neighbor as yourself.”

Galatians 5:13-14 (WEB)
emphasis mine

       You see, there’s no need to require Christians to give a specific percentage of their income to the poor because we are called to love each other as we love ourselves! Following that Law of Love will meet the needs of all people and truly make God happy. Tithing because you want a blessing from God or because you fear a curse from God are not the ways to please Him. But giving because you love your neighbor will bring joy to His heart as He sees His children loving others.

       The New Covenant began at Jesus’ death when His blood was shed. After that point, all who believe in Him live by faith in His name and are called to be led by His Holy Spirit. We are called to live out the love of God and show it to those around us. And if we have faith in Christ and we are led by the Spirit, then we are under grace and not the Law of Moses.

The Tithe Was Still Only Food

       It may seem ridiculous to bring this up (again), but even here the tithe still only contained food. In the Bible, the tithe never contained money. But those who teach tithing today tell Christians to tithe on any and all income and only want Christians to give money in the offering plate – not food. You’ll see that Jesus noted the Pharisee’s focus on tithing their garden herbs – the least of all agricultural produce. The did not tithe money because it was not required by the Law of Moses.

       And we cannot say it is because they did not have money. Consider the numerous times Jesus discussed money or used money in His parables. The Jews had shekels, denarii, and other forms of currency available to them, but they never tithed their money. (Yes, there was money available when the tithe was enacted in the Law of Moses as well.) The addition of money as an object to tithe is a modern twist in an attempt to get as much money into the churches as possible. It is not Biblical and cannot be supported by any Scriptures at all.

You Can Tithe and Still Be Sinning

       Finally, the most important point in these verses is that tithing is less important than living a life that’s right before God. Even under the Law of Moses, God counted justice, mercy, faith, and sharing His love as more important than tithing. Even now, God does not desire your gifts if your heart is not right before Him. He loves a cheerful giver – not someone who is giving because of compulsion. He desires that you ask forgiveness of your neighbor before you try to give anything in His name. Your relationship with money has a huge impact on your relationship with God, but your relationship with other people is far more important.

       Jesus cursed the Pharisees even though they were keeping the tithing statutes as literally as possible. They were even tithing the tiniest of their garden herbs. But they did it with a wrong heart and neglected to do the things God desired most (justice, mercy, faith, and love). You can be tithing today and still be sinning. You can be giving 90% of your income, and God will still desire that you repent if you’re not doing justice, showing mercy, having faith, and sharing love. Love trumps giving any day.

Only Two Left!

       We only have two more Scriptures on tithing left to examine. Make sure you’ve signed up for free updates to Provident Planning if you don’t want to miss them!