Strongtower Financial

The Process 

Identify long-term objectives first

• Prudence:  Luke 14:28 “Calculate the cost to see if you have enough…”

  • How much is enough?
  • How much is too much?
• Patience:   Avoid the cultural temptation to “get rich quick” and “keep up with the Joneses.” 
  • Proverbs 21:5 “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.”
  • Proverbs 28:20,22 “A faithful man will abound with blessings, but he who makes haste to be rich will not go unpunished…A man with an evil eye hastens after wealth, and does not know what want will come upon him.”
• Perspective:  The longer term the perspective, the better the current decision.
  • Short-term objectives are the means to accomplish long-term objectives (not get rich quick schemes).

Identify ALL the risks (Proverbs 22:3)

• Spiritual risks (the biggest, most impactful risks)
  • The temptation to indulge
    • Spend/consume versus save/invest (pride, envy)
    • The cost of waiting
    • The cost of not reinvesting
    • The power of compounding and reinvestment
  • The temptation to hoard
    • How much is enough?
    • How much is too much?
    • The foolish rich man
  • The temptation to speculate (get rich quick)
    • Dangers of market timing
    • Risk smoothed over time
• Financial risks
  • Inflation risk—equities, ladders
  • Tax risk
  • Investment risk
  • Market risk
  • Credit risk

Use a steady, methodical, tax-efficient growth strategy

• Use leverage
  • Matching funds (employers, etc.)
  • Sheltered accounts (annuities, tax frees, etc.)
  • Qualified funds (IRAs, 401Ks, etc.)
  • (NOT margin accounts)
• Diversify the portfolio (Ecclesiastes 4:12)

Asset Allocation

• Use of asset allocation—key determinant of long-term performance
  • Asset classes
  • Managed accounts
  • The importance of re-balancing
  • An eternal approach to asset allocation: use your balance sheet instead of your income statement to record giving to the church
• Use the power of compounding and reinvestment
• Use insurance (2 Corinthians 8:14)
  • Income protection
  • Asset protection
• Advanced products and solutions

Provide for an inheritance

• Wills and estate planning
• The Church
• Legacy gifts

Biblical versus worldly wisdom

• Assess the tradeoff:  current gratification versus creation of long-term value

Short Term and Long Term Objectives