Sunday, November 13, 2005

what would you do with a million dollars?

What would you do with a million dollars? I started out our seminar at church this morning with just that question. What would you plan to do if you were given a million dollars? Would you tithe? Would you pay off old debts and bills? Invest some and enjoy receiving interest payments instead of paying them? Buy a new car? New furniture? Remodel the house or get a new house? Put some away for your old age? Maybe have some fun by giving part of it away. Say, pay off the pastor’s mortgage or hand out $100 bills to folks who are struggling?

Would you want to be like the folks who win the lottery and then a few years later have run through the money, not knowing where it went, ending up back where they started? No most people would plan how to use the money. Most people don’t want to blow their riches.

Wouldn’t this be the end to all your financial problems? Wouldn’t you want to get the most out of the million?

Go ahead, have a little fun. Plan how you would use your imaginary million bucks.
. . . .

Guess what? This million dollars is not imaginary. God is giving you a million bucks!

. . . .

That’s right. Did you know that almost everyone reading this will earn over a million dollars during their lifetime? That is a very conservative estimate. A million is earned with an average of just $25 thousand per year over 40 years. That is just an average. Almost everyone under the age of 40 will be able to do that. Most younger people will earn multiple millions in their lifetime.

How do you plan to use your million dollars?

Even we older folks would earn a million during our working years if we adjust our past incomes from earlier years for inflation. I started thinking. Often when I start thinking, especially when I start thinking abut spiritual matters, it becomes like the reverse of one of those “good news-bad news” jokes. Except unlike the jokes, I think of the bad news first. First, the bad news is…I have run through so much money and not done very much with it. I could have done so much better if I had started approaching my finances in a Godly way at an earlier age…If I had only been more diligent when I did learn Godly principles. What wasted opportunities. I feel like such a loser.

I find this first part very depressing. It is not a joke and it is not funny.

The good news is that God is not done with me yet. I started figuring out how much time, if the Lord willing, I have left. I’m in my early 50’s. A male my age who doesn’t smoke, who is in reasonable health, on average, lives to be about 79. (I fully expect to beat that: I’m competitive enough that life expectancy numbers just provide me a challenge that I will try to figure out how to beat.) I’ll have probably a dozen or more years of working at my current job. (As many years as I want since profs have no mandatory retirement age.) I have more than 25 years left.

I have a third of my life left to go. If my life were a hockey game, I’d only be at the intermission between the second and third periods. (In fact if you count only my years as an adult, I’m still in the second period!) There’s be plenty of hockey left. The game is far from over.

Anyway, so I added it up. I have at least my future income, my retirement funds, and future social security benefits. I should have over a million dollars left to steward if the Lord gives me the time. This is double cool. I still have time to plan what to do with the next million.

And so do you. You may have more than or less than a million left. However, God has given you significant resources yet to manage. C’mon now, this is Good News! The past is past. God hasn’t replaced you. You are a Godly steward. God is still going to use you to manage His resources.

This is what Christian personal financial management is about. This is what planning, the budgets, living debt-free, and the blah , blah, blah, is all about: Living your life for the Lord. Being a good manager or good steward of all that God has given you.

So what are you going to do with your million dollars? This is not a hypothetical question. This is a reality, not a fantasy. Are you going to plan so you won’t blow it, so you won’t fritter it away with nothing to show?

How are you going to serve God?

Be blessed!

RB

4 comments:

Anonymous said...

Hey Bob, great stuff here on your blog!! I enjoyed reading about the million dollars and also your entry from Friday.

I've spent the evening developing a budget and have a couple of questions.

There are some expenses that don't occur every month and I'm wondering how you handle them in your monthly budget? I also usually take money out from one of my retirement accounts to pay for the property taxes and school taxes when they are due. It is kind of hard to include this as income in a fixed monthly budget that is done for the year.

Thanks.

RB said...

Thank you.

Expenses that don't occur every month? Typically you’d just total up what you expect them to be for the next 12 months, divide the total by twelve, and put in the monthly budget. Then the problem would be to make sure you don’t spend this amount in the months when the expense doesn’t occur. Some people actually have a separate bank account to put such irregular budgeted amounts until needed.

In your case it is a little more complicated. One way to go about this is to take the money for say property taxes out of a retirement account but then don’t put property taxes in your regular budget.

You need to specify in writing ahead of time which expenses are paid out of retirement funds. If you don’t, there is always the danger that any unexpected (unplanned?) expense that pops up will end up coming out of these funds. You could easily lose control over spending. (“Where did our retirement money go?”)

So you’ll need to make sure the retirement funds are not depleted in an unexpected way by these irregular payments. If you are not already doing it, you need at least an annual plan for the retirement funds. How much are the funds earning, how much income taxes need to be paid from these earnings, which expenses (and how much) go out, how much goes out monthly to support the regular budget’s “income,” etc.

In your case you might have a monthly budget and also then a retirement-fund budget. The bottom line is to make sure all income and all expenses are accounted for somewhere.

Hope this helps. If I missed your point, please try again.

RB

Anonymous said...

Bob,

Thanks for the input. It is helpful.

Will we be covering developing an annual plan for retirement funds in your next class? I've never thought about doing this, but would like to learn more.

So far, I've only taken money out from the retirement account to pay for the yearly taxes and I haven't included the taxes in my annual budget.

RB said...

I don't think we'll have time to talk about that. The topic for Sunday is saving and investing. Today I'm trying to figure out what we're not going to talk about given the limited time.

RB