My daughter used to ask me this when she was 4 years old. I always answered that yes, we are rich in every way that matters. We have health, we have insurance, we have each other. Nothing else matters.
I am amazed at what the lenders are willing to lend. My husband and I have lived in our house for 17 years so have a fair amount of equity plus decent income and no consumer debt. I plugged our numbers into a mortgage calculator and it said we should be buying a $1.2 million dollar home!!! Holy smokes! I live in downstate Illinois so that would be quite a house. I think I'll stay in my $400,000 house and pay for my kids' college tuitions, retirement, heat and food.
My dad always taught me to have cash handy since I was young (many moons ago). The logic was you never know where you might be with work, travel, leisure, etc. and some places might just not accept cash alternatives. Well, everyone takes cash. Dad's always given me $100 cash to tuck away for emergency use in my wallet since I was young and I've kept that habit to this day.
I also hate going to the bank for any purpose, including using ATMs so I just go to the teller, withdraw enough and use it up, usually in a month or two. This also saves me time from always "having to stop by the bank" when I go out. That gets annoying when my friends have to do it 2-3x a week so I won't do it to them.
I actually spend less in cash than on my cards, even though I have cash on me. I save the cash for something that calls for it, either for convenience (small items), when it is not accepted by certain merchants (some local Chinese restaurants) or stores where you can negotiate a better price in cash.
Cash is not obsolete, far from it, even in a metropolis like L.A. where I live. There's been tons of situations where I had to lend friends cash because the merchants did not take anything else. Getting all the cash I lent out, now that's a different matter...
Thanks a lot for using photo and for sending me a link with your very nice write up.
I have here some of my outlook about money and this is more on the views from the Bible.
How Can You Keep a Balanced View of Money?
Love of money and a desire for possessions are not new; nor is the Bible silent about them, as if they were some recent phenomena. They are very old. In the Law, God instructed the Israelites: “You must not desire your fellowman’s house . . . nor anything that belongs to your fellowman.”—Exodus 20:17.
LOVE of money and possessions was common in Jesus’ day. Consider this report of an exchange between Jesus and a “very rich” young man. “Jesus said to him: ‘There is yet one thing lacking about you: Sell all the things you have and distribute to poor people, and you will have treasure in the heavens; and come be my follower.’ When he heard this, he became deeply grieved, for he was very rich.”—Luke 18:18-23.
A Proper View of Money
It would be wrong, however, to conclude that the Bible condemns money itself or any of its basic uses. The Bible shows that money provides a practical defense against poverty and its attendant troubles, enabling people to procure necessities. King Solomon wrote: “Wisdom is for a protection the same as money is for a protection.” And: “Bread is for the laughter of the workers, and wine itself makes life rejoice; but money is what meets a response in all things.”—Ecclesiastes 7:12; 10:19.
The proper use of money is approved by God. For example, Jesus said: “Make friends for yourselves by means of the unrighteous riches.” (Luke 16:9) This includes contributing toward the advancement of the true worship of God, for we definitely should want God as our Friend. Solomon himself, following the example of his father, David, contributed large amounts of money and valuables toward the building of Jehovah’s temple. Another Christian mandate is to give material assistance to those in need. “Share with the holy ones according to their needs,” said the apostle Paul. He added: “Follow the course of hospitality.” (Romans 12:13) This often involves spending some money. However, what about the love of money?
‘The Fondness of Silver’
Paul discussed extensively “the love of money”—or literally, “fondness of silver”—when he was writing to his younger fellow Christian Timothy. Paul’s admonition can be found at 1 Timothy 6:6-19. He commented on “the love of money” as part of his broader consideration of material things. We do well to study carefully Paul’s inspired comments, in view of the emphasis today’s culture puts on money. Such an examination is definitely beneficial because it brings in the secret of how to “get a firm hold on the real life.”
Paul warns: “The love of money is a root of all sorts of injurious things, and by reaching out for this love some have been led astray from the faith and have stabbed themselves all over with many pains.” (1 Timothy 6:10) This text does not say that money itself is evil—nor does any other scripture. Neither does the apostle say that money is the fundamental cause of “injurious things” or that money lies at the root of every problem. Rather, the love of money can be a cause—even if not the only cause—of all kinds of “injurious things.”
Guard Against Greed
The fact that money itself is not condemned in the Scriptures should not blunt Paul’s warning. Christians who begin to love money are vulnerable to all kinds of problems, the worst of which is that of straying from the faith. This truth is reinforced by what Paul said to the Christians in Colossae: “Deaden, therefore, your body members that are upon the earth as respects . . . hurtful desire, and covetousness, which is idolatry.” (Colossians 3:5) How may covetousness, greed, or “love of money” amount to idolatry? Does this mean that it is wrong to want a bigger house, a newer car, a more profitable job? No, none of these things are evil in themselves. The question is: What is the heart attitude that makes one want any of these things, and are they really necessary?
The difference between normal desire and greed might be likened to the difference between the small campfire that cooks food and the blazing inferno that consumes a forest. Wholesome and well-placed desire can be constructive. It motivates us to work and to be productive. Proverbs 16:26 says: “The soul of the hard worker has worked hard for him, because his mouth has pressed him hard.” But greed is dangerous and destructive. It is desire out of control.
Control is a core issue. Will the money we accumulate or the material things we want serve our needs, or will our needs serve money? That is why Paul says that being a “greedy person . . . means being an idolater.” (Ephesians 5:5) To be greedy for something in reality means that we surrender our will to it—in effect, we make it our master, our god, the thing we serve. In contrast, God insists: “You must not have any other gods against my face.”—Exodus 20:3.
Our being greedy also indicates that we do not trust that God will follow through on his promise to supply what we need. (Matthew 6:33) Greed, then, amounts to a turning away from God. In this sense too, it is “idolatry.” No wonder Paul warns so clearly against it!
Jesus also gave a direct warning against greed. He commanded us to guard against longing for something that we do not have: “Keep your eyes open and guard against every sort of covetousness, because even when a person has an abundance his life does not result from the things he possesses.” (Luke 12:15) According to this passage and Jesus’ subsequent illustration, greed is based on the foolish belief that what matters in life is how much one has. It may be money, status, power, or related things. It is possible to be greedy for anything that can be acquired. The idea is that having that thing will make us content. But according to the Bible and human experience, only God can—and will—satisfy our real needs, as Jesus reasoned with his followers.—Luke 12:22-31.
Today’s consumer-oriented culture excels at kindling the fires of greed. Influenced in subtle yet powerful ways, many come to believe that whatever they have is not enough. They need more, bigger, and better things. While we cannot hope to change the world around us, how can we personally resist this trend?
Contentment Versus Greed
Paul offers the alternative to greed, which is contentment. He says: “So, having sustenance and covering, we shall be content with these things.” (1 Timothy 6:8) This description of all that we really need—“sustenance and covering”—may sound rather simplistic or naive. Many people are entertained by television programs where viewers visit celebrities who live in luxurious homes. That is no way to attain contentment.
Of course, servants of God are not required to live in self-imposed poverty. (Proverbs 30:8, 9) However, Paul does remind us what poverty really is: lack of food, clothing, and shelter adequate for survival where one lives. On the other hand, if we have those things, we have the basis for contentment.
Could Paul be serious about such a description of contentment? Is it really possible to be satisfied with merely the basics—food, clothing, and shelter? Paul should know. He experienced firsthand the wealth and privileges of high rank in the Jewish community and of Roman citizenship. (Acts 22:28; 23:6; Philippians 3:5) Paul also suffered severe hardships in his missionary activities. (2 Corinthians 11:23-28) Through it all, he learned a secret that helped him to maintain contentment. What was that?
“I Have Learned the Secret”
Paul explained in one of his letters: “I know indeed how to be low on provisions, I know indeed how to have an abundance. In everything and in all circumstances I have learned the secret of both how to be full and how to hunger, both how to have an abundance and how to suffer want.” (Philippians 4:12) Paul sounds so confident, so optimistic! It would be easy to assume that his life was rosy when he wrote these words but not so. He was in prison in Rome!—Philippians 1:12-14.
Given that sobering fact, this passage speaks powerfully on the issue of contentment not only with material possessions but with circumstances as well. Extremes of wealth or hardship can test our priorities. Paul spoke of spiritual resources that enabled him to be content regardless of material circumstances: “For all things I have the strength by virtue of [God] who imparts power to me.” (Philippians 4:13) Rather than looking to his possessions, many or few, or to his circumstances, good or bad, Paul looked to God to satisfy his needs. The result was contentment.
Paul’s example was especially important to Timothy. The apostle urged that young man to pursue a life-style that put godly devotion and a close relationship with God before wealth. Paul said: “However, you, O man of God, flee from these things. But pursue righteousness, godly devotion, faith, love, endurance, mildness of temper.” (1 Timothy 6:11) Those words may have been addressed to Timothy, but they apply to anyone who wants to honor God and to have a really happy life.
Timothy needed to watch out for greed just like any other Christian. Apparently, there were wealthy believers in the congregation in Ephesus, where he was when Paul wrote to him. (1 Timothy 1:3) Paul had entered this prosperous commercial center with the good news of Christ, making many converts. No doubt, a number of these were wealthy people, as is true of some in the Christian congregation today.
The question, then, especially in the light of the teaching at 1 Timothy 6:6-10, is: What should people with more than the average amount of money do if they want to honor God? Paul says that they should start by examining their attitude. Money has a tendency to create feelings of self-sufficiency. Paul says: “Give orders to those who are rich in the present system of things not to be high-minded, and to rest their hope, not on uncertain riches, but on God, who furnishes us all things richly for our enjoyment.” (1 Timothy 6:17) People of means have to learn to look beyond their money; they need to look to God, the original source of any wealth.
But attitude is only half the battle. Sooner or later, wealthy Christians need to use their wealth well. Paul admonishes: ‘Work at good, be rich in fine works, be liberal, ready to share.’—1 Timothy 6:18.
“The Real Life”
The thrust of Paul’s counsel is that we need to remind ourselves of the relative worth of material things. God’s Word says: “The valuable things of the rich are his strong town, and they are like a protective wall in his imagination.” (Proverbs 18:11) Yes, the security that riches can provide is in the end only imagined and is actually deceptive. It is wrong to center our lives on them rather than on gaining God’s approval.
The uncertainty of material wealth makes it far too fragile to fix our hope on. Genuine hope must be moored to something strong, meaningful, and lasting. Christian hope is fixed on our Creator, Jehovah God, and his promise of everlasting life. While it is true that money cannot buy happiness, it is even more true that money cannot buy salvation. Only our faith in God can give us such hope.
So whether we are wealthy or poor, let us pursue a course in life that will make us “rich toward God.” (Luke 12:21) Nothing is more valuable than an approved standing with the Creator. All efforts to maintain it contribute to our ‘treasuring up for ourselves a fine foundation for the future, in order that we may get a firm hold on the real life.’—1 Timothy 6:19.
In my financial planning career, I saw way too many young people get in way over their head with mortgages they couldn`t afford simply because their eyes were too big for their wallets, they didn't take into account other home ownership expenses, the interest rates were low, and the bank was willing to lend them more than they could realistically afford.
Frankly, not being able to get through to these people and watching them make huge mistakes was one of the reasons I burnt out and got out of the business.
Thank you all for the comments! Some great points have been brought up. Just a few responses:
Denise: Both my parents are musicians! And although they never bragged about their incomes or lack thereof, I can attest to seeing different strategies of making money within the same profession. Luckily, both of them are good entrepreneurs and have essentially stayed ahead of the income curve in their field. I wonder if those who are inclined towards the arts sometimes lack the oh so important entrepreneurial skills to maximize their incomes...
Bob: One of the most rewarding parts (and a personal mission of mine) when I worked as a financial planner was just that - getting multiple generations to communicate about their finances and redefine their relationships with money and ultimately each other. I am so glad to hear that somebody else is taking that approach too.
Sistah Ant: You also bring up a great point about being judged. If only the world wasn't like that...
Why reference MaltaStar? Maltastar is an internet based news website funded by a Maltese political party. Except for local news, which is always composed by Maltastar news team, most international news are generally sourced from foreign news feeds, and understandably, only appear some time after the topic is reported foreign media.
A very good post and equally sound comments. I sometimes think that I am fortunate that my internal "wiring" makes me a bit risk averse and so unwilling (unable?) to make purchases beyond my means. My wife and I are in our mid-30s and have been considering our own dream home for some time. Although we could afford it, it certainly would have caused sacrifices elsewhere in our budget. The recent downturn has actually helped us in that it has forced us to postpone our plans...enabling us to continue saving more money and hopefully finding a more economical price when we do decide to buy.
What do you get when you combine dumb borrowers who don't understand what they are stepping into, greedy mortgage brokers who don't do their due diligence and qualify any schmuck who walks in off the street to make commission and a housing market so over heated it had to collapse?
You get falling home values, sky high foreclosure rates, sinking interest rates and equity markets that tank.
Ain't it great?
As I sit here typing this now the markets are down huge, again.
So tonight when you get home and pull up your brokerage/retirement accounts and see another 1%+ of your wealth gone be sure to thank all the brain dead buyers, let me process this no doc loan so I can get my commission mortgage brokers and the housing speculators who drove prices to unsustainable heights.
I'm sure you'll do great with your home inspection (and the use of a home inspector who can catch hidden items, like a roof cracking under shingles, per my experience), along with your visual and handyperson skills but I'm glad that helped. Just getting a contractor out to your house, rearranging your schedule to accommodate work, and shopping for supplies are all time-consuming (not to mention the cost).
That may take me a while but in the meantime, you could download and make changes based on your situation -- perhaps one spreadsheet to determine the original calculation (payment per year) for a starting point on the new spreadsheet, which you create and then enter contributions manually to see how you could lower your payment now and increase it by a certain percentage each year. (I can more easily customize a spreadsheet for an individual with fixed assumptions than I can create a spreadsheet that allows multiple variables). Hope this helps for now.
I, too, am one of those don't-overextend-yourself-on-a-mortgage people, though I have been around long enough to see housing busts and booms (which can vary by region and city) as well as swings in interest rates up to double digits and back to low rates now.
I also remember when tapping into your home equity was termed a "second mortgage" (ask your dad!) and spoken of in whispers about a neighbor who was in a financial jam.
There are smart ways of building wealth with real estate and even leveraging with home equity but as with any investment, there can be risks and rewards. Risk taking is one thing, though, and overextending is another -- it's smart to know what you are getting into when you buy a home and get a mortgage, glad you explored this topic from a new homebuyer's perspective.
Many commenters imply that the banks make no money if the card user does not carry a balance. That is not the case.
Visa, MC, AmEX and all others charge the retailers a few percentage points on every transaction. So while Citibank might not make as much money when you reconsile your balance every month, they are still getting income from your business.
I'm saving now for a home, and I'm thinking ahead about what I can afford. I'm considering home maintenance (if no yard, then no landscaping), utilities (if no oil heat, no oil bill), and monthly payments - (either my BF or I must be able to afford an entire mortgage payment if the other one loses income). The point is to try to get a house that's WELL within our means. As you say, we're young (late 20s) so there's no need for a dream house now. We can earn that later.
I think people simply don't want to be judged based on what they do or don't have or earn. It's unfortunate but that does happen. I'd love to be more open with people I know personally about money, but I fear they'd talk about my decisions behind my back, and that people will draw conclusions about my income or debt if they know too many specifics. I speak in generalizations when I talk about money, unless I'm on my blog. But if I had rich friends, I'd love to talk with them, learn from them, and pick their brains.
Rising expenses don't help either. Our house payments with insurance are a bit lower than renting something a knotch down in size and quality. We saw the going rate for our property go up 20 to 50 grand since we bought it based on what other properties are being listed for. So far we are not seeing a big panic in the market here but we also have some decent state sponsored loan programs.
What is really squeezing people are stagnant wages combined with really high grocery prices and higher than average gas prices and we have virtually no public transit.
When we bought our first place I didn't even know what the mortgage payments would be! 10 years latter we finally crawled out of the house. I'm much more careful with impulse purchases these days.
The reason for the bubble was the disconnect between lending and owning of the mortgage. Do you really care if the person can afford the payments, once it's closed you sell the loan off. Your interest is in generating fees not interest income.
From Dr Housing Bubble
The Foreclosure Story: $130,000 income to Foreclosure
...and while I can't say that we were fortunate enough to be able to put down 20%, we put down over 5% while sticking to a limit of our price range. We knew what our top dollar amount was for a house, and despite the bank offering us 20% more than that in a loan, we stuck to our limit. We figured that our current rent + our monthly mass savings for this house down payment should be more than the monthly mortgage, and we were able to hit those numbers pretty well. We got a great deal on a house that we'll be in for 20+ years, as well as have enough room to care for our parents at the appropriate times in their lives, as that was important to us.
We have zero credit card debt, which helps us substantially. We did not want to overextend ourselves and be up a creek, but we are both in our early 30s and want to stay in this house for a long time. The market here (in NH and VT) has been incredibly stable without a great deal of dropping off (mostly due to an overall lack of housing).
We knew what we could afford, and stuck to it. Friends of ours who bought a house as recently as the spring are telling us time and again that we picked the right time, as the market was entirely in our favor.
What really kills you when you have less than 20% is the Private Mortgage Insurance -- basically, you pay a couple extra hundred dollars a month to make sure the bank doesn't lose on their investment. This continues until you hit 20% equity. Ouch. Of course, if you lose your ability to pay the mortgage, you have no insurance. You're paying the bank twice, in essence. Once we get rid of that (in about 6 years), our payments will be a breeze as we'll both be more advanced in our careers.
To this you can add the Galbraith showering system - follow the outline of your body, then broad strokes to front and back, a little extra attention where needed, and rinse.
A simpler way to wash your hair is to dilute some shampoo in enough water to saturate the scalp, then work it to the ends and rinse. You only need more if you're dusty/dirty. Cornmeal also works well as a dry hair cleaner, better if it's too cold for any shower.
One thing to be aware of is that water-saving showerheads are not compatible with all tankless/demand water heaters. When the shower switch is off, it can trip the sensor on the heater, and you have to turn the water on and off and let it warm up again.
When my Wife and I were ready to buy our first house, we started by looking at our home budget and deciding on what would be a comfortable amount to pay each month, keeping in mind, that my Wife wanted to leave her job when we had our first child.
We then went to the mortgage broker and presented our desired monthly payment, and asked him to tell us what size mortgage that would give us, based on the money we had to put down. That number was about 2.5 times smaller than what the bank would have been willing to lend to us. They offered us more, but we turned it down, rather staying in the monthly payment, and a fixed rate, that we knew we would be able to afford.
Once that was figured out we went to our Real Estate agent with the total amount we could afford for a house, drew a circle on the map noting the areas where we were interested in owning a house, and asked him to find us houses in that range. We were not interested in seeing any houses for more than our mortgage amount.
We made an offer on a house in just under 2 weeks. We have had the house for several years now, and my Wife did leave her job when our son was born.
We avoided any serious financial trouble because we worked backwards from budget to house. House buying is the largest emotional purchase you will make. If you don't approach it logically, it is far too easy to get caught up in the emotions of it and buy a house or get a mortgage that you cannot afford in the long run.
Several years ago, I bought a house that was much smaller than what is usual for people in my occupation. The small house made it possible for me to save enough money for an emergency fund.
Recently, I had a period of unemployment caused by a health problem. I'm so thankful that I didn't have to worry about money during this difficult time when everything else was going wrong!
I've recently started back to work and everything is going to be all right. It would have been a stressful time if I had borrowed money for a "dream" house.
congrats! my boyfriend an I are taking advantage of this same situation - we saved the money and now we're getting a fantastic home that we can be in for several years to come before we feel the need to move.
My daughter used to ask me this when she was 4 years old. I always answered that yes, we are rich in every way that matters. We have health, we have insurance, we have each other. Nothing else matters.
I am amazed at what the lenders are willing to lend. My husband and I have lived in our house for 17 years so have a fair amount of equity plus decent income and no consumer debt. I plugged our numbers into a mortgage calculator and it said we should be buying a $1.2 million dollar home!!! Holy smokes! I live in downstate Illinois so that would be quite a house. I think I'll stay in my $400,000 house and pay for my kids' college tuitions, retirement, heat and food.
My dad always taught me to have cash handy since I was young (many moons ago). The logic was you never know where you might be with work, travel, leisure, etc. and some places might just not accept cash alternatives. Well, everyone takes cash. Dad's always given me $100 cash to tuck away for emergency use in my wallet since I was young and I've kept that habit to this day.
I also hate going to the bank for any purpose, including using ATMs so I just go to the teller, withdraw enough and use it up, usually in a month or two. This also saves me time from always "having to stop by the bank" when I go out. That gets annoying when my friends have to do it 2-3x a week so I won't do it to them.
I actually spend less in cash than on my cards, even though I have cash on me. I save the cash for something that calls for it, either for convenience (small items), when it is not accepted by certain merchants (some local Chinese restaurants) or stores where you can negotiate a better price in cash.
Cash is not obsolete, far from it, even in a metropolis like L.A. where I live. There's been tons of situations where I had to lend friends cash because the merchants did not take anything else. Getting all the cash I lent out, now that's a different matter...
Thanks a lot for using photo and for sending me a link with your very nice write up.
I have here some of my outlook about money and this is more on the views from the Bible.
How Can You Keep a Balanced View of Money?
Love of money and a desire for possessions are not new; nor is the Bible silent about them, as if they were some recent phenomena. They are very old. In the Law, God instructed the Israelites: “You must not desire your fellowman’s house . . . nor anything that belongs to your fellowman.”—Exodus 20:17.
LOVE of money and possessions was common in Jesus’ day. Consider this report of an exchange between Jesus and a “very rich” young man. “Jesus said to him: ‘There is yet one thing lacking about you: Sell all the things you have and distribute to poor people, and you will have treasure in the heavens; and come be my follower.’ When he heard this, he became deeply grieved, for he was very rich.”—Luke 18:18-23.
A Proper View of Money
It would be wrong, however, to conclude that the Bible condemns money itself or any of its basic uses. The Bible shows that money provides a practical defense against poverty and its attendant troubles, enabling people to procure necessities. King Solomon wrote: “Wisdom is for a protection the same as money is for a protection.” And: “Bread is for the laughter of the workers, and wine itself makes life rejoice; but money is what meets a response in all things.”—Ecclesiastes 7:12; 10:19.
The proper use of money is approved by God. For example, Jesus said: “Make friends for yourselves by means of the unrighteous riches.” (Luke 16:9) This includes contributing toward the advancement of the true worship of God, for we definitely should want God as our Friend. Solomon himself, following the example of his father, David, contributed large amounts of money and valuables toward the building of Jehovah’s temple. Another Christian mandate is to give material assistance to those in need. “Share with the holy ones according to their needs,” said the apostle Paul. He added: “Follow the course of hospitality.” (Romans 12:13) This often involves spending some money. However, what about the love of money?
‘The Fondness of Silver’
Paul discussed extensively “the love of money”—or literally, “fondness of silver”—when he was writing to his younger fellow Christian Timothy. Paul’s admonition can be found at 1 Timothy 6:6-19. He commented on “the love of money” as part of his broader consideration of material things. We do well to study carefully Paul’s inspired comments, in view of the emphasis today’s culture puts on money. Such an examination is definitely beneficial because it brings in the secret of how to “get a firm hold on the real life.”
Paul warns: “The love of money is a root of all sorts of injurious things, and by reaching out for this love some have been led astray from the faith and have stabbed themselves all over with many pains.” (1 Timothy 6:10) This text does not say that money itself is evil—nor does any other scripture. Neither does the apostle say that money is the fundamental cause of “injurious things” or that money lies at the root of every problem. Rather, the love of money can be a cause—even if not the only cause—of all kinds of “injurious things.”
Guard Against Greed
The fact that money itself is not condemned in the Scriptures should not blunt Paul’s warning. Christians who begin to love money are vulnerable to all kinds of problems, the worst of which is that of straying from the faith. This truth is reinforced by what Paul said to the Christians in Colossae: “Deaden, therefore, your body members that are upon the earth as respects . . . hurtful desire, and covetousness, which is idolatry.” (Colossians 3:5) How may covetousness, greed, or “love of money” amount to idolatry? Does this mean that it is wrong to want a bigger house, a newer car, a more profitable job? No, none of these things are evil in themselves. The question is: What is the heart attitude that makes one want any of these things, and are they really necessary?
The difference between normal desire and greed might be likened to the difference between the small campfire that cooks food and the blazing inferno that consumes a forest. Wholesome and well-placed desire can be constructive. It motivates us to work and to be productive. Proverbs 16:26 says: “The soul of the hard worker has worked hard for him, because his mouth has pressed him hard.” But greed is dangerous and destructive. It is desire out of control.
Control is a core issue. Will the money we accumulate or the material things we want serve our needs, or will our needs serve money? That is why Paul says that being a “greedy person . . . means being an idolater.” (Ephesians 5:5) To be greedy for something in reality means that we surrender our will to it—in effect, we make it our master, our god, the thing we serve. In contrast, God insists: “You must not have any other gods against my face.”—Exodus 20:3.
Our being greedy also indicates that we do not trust that God will follow through on his promise to supply what we need. (Matthew 6:33) Greed, then, amounts to a turning away from God. In this sense too, it is “idolatry.” No wonder Paul warns so clearly against it!
Jesus also gave a direct warning against greed. He commanded us to guard against longing for something that we do not have: “Keep your eyes open and guard against every sort of covetousness, because even when a person has an abundance his life does not result from the things he possesses.” (Luke 12:15) According to this passage and Jesus’ subsequent illustration, greed is based on the foolish belief that what matters in life is how much one has. It may be money, status, power, or related things. It is possible to be greedy for anything that can be acquired. The idea is that having that thing will make us content. But according to the Bible and human experience, only God can—and will—satisfy our real needs, as Jesus reasoned with his followers.—Luke 12:22-31.
Today’s consumer-oriented culture excels at kindling the fires of greed. Influenced in subtle yet powerful ways, many come to believe that whatever they have is not enough. They need more, bigger, and better things. While we cannot hope to change the world around us, how can we personally resist this trend?
Contentment Versus Greed
Paul offers the alternative to greed, which is contentment. He says: “So, having sustenance and covering, we shall be content with these things.” (1 Timothy 6:8) This description of all that we really need—“sustenance and covering”—may sound rather simplistic or naive. Many people are entertained by television programs where viewers visit celebrities who live in luxurious homes. That is no way to attain contentment.
Of course, servants of God are not required to live in self-imposed poverty. (Proverbs 30:8, 9) However, Paul does remind us what poverty really is: lack of food, clothing, and shelter adequate for survival where one lives. On the other hand, if we have those things, we have the basis for contentment.
Could Paul be serious about such a description of contentment? Is it really possible to be satisfied with merely the basics—food, clothing, and shelter? Paul should know. He experienced firsthand the wealth and privileges of high rank in the Jewish community and of Roman citizenship. (Acts 22:28; 23:6; Philippians 3:5) Paul also suffered severe hardships in his missionary activities. (2 Corinthians 11:23-28) Through it all, he learned a secret that helped him to maintain contentment. What was that?
“I Have Learned the Secret”
Paul explained in one of his letters: “I know indeed how to be low on provisions, I know indeed how to have an abundance. In everything and in all circumstances I have learned the secret of both how to be full and how to hunger, both how to have an abundance and how to suffer want.” (Philippians 4:12) Paul sounds so confident, so optimistic! It would be easy to assume that his life was rosy when he wrote these words but not so. He was in prison in Rome!—Philippians 1:12-14.
Given that sobering fact, this passage speaks powerfully on the issue of contentment not only with material possessions but with circumstances as well. Extremes of wealth or hardship can test our priorities. Paul spoke of spiritual resources that enabled him to be content regardless of material circumstances: “For all things I have the strength by virtue of [God] who imparts power to me.” (Philippians 4:13) Rather than looking to his possessions, many or few, or to his circumstances, good or bad, Paul looked to God to satisfy his needs. The result was contentment.
Paul’s example was especially important to Timothy. The apostle urged that young man to pursue a life-style that put godly devotion and a close relationship with God before wealth. Paul said: “However, you, O man of God, flee from these things. But pursue righteousness, godly devotion, faith, love, endurance, mildness of temper.” (1 Timothy 6:11) Those words may have been addressed to Timothy, but they apply to anyone who wants to honor God and to have a really happy life.
Timothy needed to watch out for greed just like any other Christian. Apparently, there were wealthy believers in the congregation in Ephesus, where he was when Paul wrote to him. (1 Timothy 1:3) Paul had entered this prosperous commercial center with the good news of Christ, making many converts. No doubt, a number of these were wealthy people, as is true of some in the Christian congregation today.
The question, then, especially in the light of the teaching at 1 Timothy 6:6-10, is: What should people with more than the average amount of money do if they want to honor God? Paul says that they should start by examining their attitude. Money has a tendency to create feelings of self-sufficiency. Paul says: “Give orders to those who are rich in the present system of things not to be high-minded, and to rest their hope, not on uncertain riches, but on God, who furnishes us all things richly for our enjoyment.” (1 Timothy 6:17) People of means have to learn to look beyond their money; they need to look to God, the original source of any wealth.
But attitude is only half the battle. Sooner or later, wealthy Christians need to use their wealth well. Paul admonishes: ‘Work at good, be rich in fine works, be liberal, ready to share.’—1 Timothy 6:18.
“The Real Life”
The thrust of Paul’s counsel is that we need to remind ourselves of the relative worth of material things. God’s Word says: “The valuable things of the rich are his strong town, and they are like a protective wall in his imagination.” (Proverbs 18:11) Yes, the security that riches can provide is in the end only imagined and is actually deceptive. It is wrong to center our lives on them rather than on gaining God’s approval.
The uncertainty of material wealth makes it far too fragile to fix our hope on. Genuine hope must be moored to something strong, meaningful, and lasting. Christian hope is fixed on our Creator, Jehovah God, and his promise of everlasting life. While it is true that money cannot buy happiness, it is even more true that money cannot buy salvation. Only our faith in God can give us such hope.
So whether we are wealthy or poor, let us pursue a course in life that will make us “rich toward God.” (Luke 12:21) Nothing is more valuable than an approved standing with the Creator. All efforts to maintain it contribute to our ‘treasuring up for ourselves a fine foundation for the future, in order that we may get a firm hold on the real life.’—1 Timothy 6:19.
In my financial planning career, I saw way too many young people get in way over their head with mortgages they couldn`t afford simply because their eyes were too big for their wallets, they didn't take into account other home ownership expenses, the interest rates were low, and the bank was willing to lend them more than they could realistically afford.
Frankly, not being able to get through to these people and watching them make huge mistakes was one of the reasons I burnt out and got out of the business.
Especially during this season of thanks. Good job.
Thank you all for the comments! Some great points have been brought up. Just a few responses:
Denise: Both my parents are musicians! And although they never bragged about their incomes or lack thereof, I can attest to seeing different strategies of making money within the same profession. Luckily, both of them are good entrepreneurs and have essentially stayed ahead of the income curve in their field. I wonder if those who are inclined towards the arts sometimes lack the oh so important entrepreneurial skills to maximize their incomes...
Bob: One of the most rewarding parts (and a personal mission of mine) when I worked as a financial planner was just that - getting multiple generations to communicate about their finances and redefine their relationships with money and ultimately each other. I am so glad to hear that somebody else is taking that approach too.
Sistah Ant: You also bring up a great point about being judged. If only the world wasn't like that...
Why reference MaltaStar? Maltastar is an internet based news website funded by a Maltese political party. Except for local news, which is always composed by Maltastar news team, most international news are generally sourced from foreign news feeds, and understandably, only appear some time after the topic is reported foreign media.
A very good post and equally sound comments. I sometimes think that I am fortunate that my internal "wiring" makes me a bit risk averse and so unwilling (unable?) to make purchases beyond my means. My wife and I are in our mid-30s and have been considering our own dream home for some time. Although we could afford it, it certainly would have caused sacrifices elsewhere in our budget. The recent downturn has actually helped us in that it has forced us to postpone our plans...enabling us to continue saving more money and hopefully finding a more economical price when we do decide to buy.
An excellent turn of phrase, because that's exactly what it is . . .
What do you get when you combine dumb borrowers who don't understand what they are stepping into, greedy mortgage brokers who don't do their due diligence and qualify any schmuck who walks in off the street to make commission and a housing market so over heated it had to collapse?
You get falling home values, sky high foreclosure rates, sinking interest rates and equity markets that tank.
Ain't it great?
As I sit here typing this now the markets are down huge, again.
So tonight when you get home and pull up your brokerage/retirement accounts and see another 1%+ of your wealth gone be sure to thank all the brain dead buyers, let me process this no doc loan so I can get my commission mortgage brokers and the housing speculators who drove prices to unsustainable heights.
I'm sure you'll do great with your home inspection (and the use of a home inspector who can catch hidden items, like a roof cracking under shingles, per my experience), along with your visual and handyperson skills but I'm glad that helped. Just getting a contractor out to your house, rearranging your schedule to accommodate work, and shopping for supplies are all time-consuming (not to mention the cost).
That may take me a while but in the meantime, you could download and make changes based on your situation -- perhaps one spreadsheet to determine the original calculation (payment per year) for a starting point on the new spreadsheet, which you create and then enter contributions manually to see how you could lower your payment now and increase it by a certain percentage each year. (I can more easily customize a spreadsheet for an individual with fixed assumptions than I can create a spreadsheet that allows multiple variables). Hope this helps for now.
I, too, am one of those don't-overextend-yourself-on-a-mortgage people, though I have been around long enough to see housing busts and booms (which can vary by region and city) as well as swings in interest rates up to double digits and back to low rates now.
I also remember when tapping into your home equity was termed a "second mortgage" (ask your dad!) and spoken of in whispers about a neighbor who was in a financial jam.
There are smart ways of building wealth with real estate and even leveraging with home equity but as with any investment, there can be risks and rewards. Risk taking is one thing, though, and overextending is another -- it's smart to know what you are getting into when you buy a home and get a mortgage, glad you explored this topic from a new homebuyer's perspective.
Many commenters imply that the banks make no money if the card user does not carry a balance. That is not the case.
Visa, MC, AmEX and all others charge the retailers a few percentage points on every transaction. So while Citibank might not make as much money when you reconsile your balance every month, they are still getting income from your business.
I'm saving now for a home, and I'm thinking ahead about what I can afford. I'm considering home maintenance (if no yard, then no landscaping), utilities (if no oil heat, no oil bill), and monthly payments - (either my BF or I must be able to afford an entire mortgage payment if the other one loses income). The point is to try to get a house that's WELL within our means. As you say, we're young (late 20s) so there's no need for a dream house now. We can earn that later.
I think people simply don't want to be judged based on what they do or don't have or earn. It's unfortunate but that does happen. I'd love to be more open with people I know personally about money, but I fear they'd talk about my decisions behind my back, and that people will draw conclusions about my income or debt if they know too many specifics. I speak in generalizations when I talk about money, unless I'm on my blog. But if I had rich friends, I'd love to talk with them, learn from them, and pick their brains.
Rising expenses don't help either. Our house payments with insurance are a bit lower than renting something a knotch down in size and quality. We saw the going rate for our property go up 20 to 50 grand since we bought it based on what other properties are being listed for. So far we are not seeing a big panic in the market here but we also have some decent state sponsored loan programs.
What is really squeezing people are stagnant wages combined with really high grocery prices and higher than average gas prices and we have virtually no public transit.
When we bought our first place I didn't even know what the mortgage payments would be! 10 years latter we finally crawled out of the house. I'm much more careful with impulse purchases these days.
The reason for the bubble was the disconnect between lending and owning of the mortgage. Do you really care if the person can afford the payments, once it's closed you sell the loan off. Your interest is in generating fees not interest income.
From Dr Housing Bubble
The Foreclosure Story: $130,000 income to Foreclosure
http://tinyurl.com/2hveen
...and while I can't say that we were fortunate enough to be able to put down 20%, we put down over 5% while sticking to a limit of our price range. We knew what our top dollar amount was for a house, and despite the bank offering us 20% more than that in a loan, we stuck to our limit. We figured that our current rent + our monthly mass savings for this house down payment should be more than the monthly mortgage, and we were able to hit those numbers pretty well. We got a great deal on a house that we'll be in for 20+ years, as well as have enough room to care for our parents at the appropriate times in their lives, as that was important to us.
We have zero credit card debt, which helps us substantially. We did not want to overextend ourselves and be up a creek, but we are both in our early 30s and want to stay in this house for a long time. The market here (in NH and VT) has been incredibly stable without a great deal of dropping off (mostly due to an overall lack of housing).
We knew what we could afford, and stuck to it. Friends of ours who bought a house as recently as the spring are telling us time and again that we picked the right time, as the market was entirely in our favor.
What really kills you when you have less than 20% is the Private Mortgage Insurance -- basically, you pay a couple extra hundred dollars a month to make sure the bank doesn't lose on their investment. This continues until you hit 20% equity. Ouch. Of course, if you lose your ability to pay the mortgage, you have no insurance. You're paying the bank twice, in essence. Once we get rid of that (in about 6 years), our payments will be a breeze as we'll both be more advanced in our careers.
To this you can add the Galbraith showering system - follow the outline of your body, then broad strokes to front and back, a little extra attention where needed, and rinse.
A simpler way to wash your hair is to dilute some shampoo in enough water to saturate the scalp, then work it to the ends and rinse. You only need more if you're dusty/dirty. Cornmeal also works well as a dry hair cleaner, better if it's too cold for any shower.
One thing to be aware of is that water-saving showerheads are not compatible with all tankless/demand water heaters. When the shower switch is off, it can trip the sensor on the heater, and you have to turn the water on and off and let it warm up again.
I don't share how much money our family has because I'm tired of people asking me for money and I don't want to give people who ask more leverage.
When my Wife and I were ready to buy our first house, we started by looking at our home budget and deciding on what would be a comfortable amount to pay each month, keeping in mind, that my Wife wanted to leave her job when we had our first child.
We then went to the mortgage broker and presented our desired monthly payment, and asked him to tell us what size mortgage that would give us, based on the money we had to put down. That number was about 2.5 times smaller than what the bank would have been willing to lend to us. They offered us more, but we turned it down, rather staying in the monthly payment, and a fixed rate, that we knew we would be able to afford.
Once that was figured out we went to our Real Estate agent with the total amount we could afford for a house, drew a circle on the map noting the areas where we were interested in owning a house, and asked him to find us houses in that range. We were not interested in seeing any houses for more than our mortgage amount.
We made an offer on a house in just under 2 weeks. We have had the house for several years now, and my Wife did leave her job when our son was born.
We avoided any serious financial trouble because we worked backwards from budget to house. House buying is the largest emotional purchase you will make. If you don't approach it logically, it is far too easy to get caught up in the emotions of it and buy a house or get a mortgage that you cannot afford in the long run.
Several years ago, I bought a house that was much smaller than what is usual for people in my occupation. The small house made it possible for me to save enough money for an emergency fund.
Recently, I had a period of unemployment caused by a health problem. I'm so thankful that I didn't have to worry about money during this difficult time when everything else was going wrong!
I've recently started back to work and everything is going to be all right. It would have been a stressful time if I had borrowed money for a "dream" house.
congrats! my boyfriend an I are taking advantage of this same situation - we saved the money and now we're getting a fantastic home that we can be in for several years to come before we feel the need to move.