Truth Seekers

Money Works

Once I was questioned everything I was doing I heard the wisdom of God point out that there are only 2 classes of things you can do with your money.

1. Spend it on consumtion. This includes food, housing, entertainment, cars. Anything that you trade for your money that becomes less valuable after you buy it.

2. Things you can buy that will become more valuable that you can resell for more money than you paid for it. This could include a house but usually it doesn't. More on that later. The most reliable things I've found that go up in value, keeping up with inflation are gold and silver.

3. Where your heart is your treasure will be there also.

1 and 2 are rules with dealing with the world system. Sowing into the kingdom of God is on another scale. The math doesn't make sense and requires faith and relationship with the Holy Spirit.

What about the systems of the world?

Remember the kingdom of religion, not anchored in spiritual relationship but in the laws of Moses? Have you noticed how often the message is how God will provide, so don't do anything, just sit and wait? At the same time telling how the church organization needs you to donante more money. Is there any talk about the law of sowing and reaping?

What about the Babylon system of man. Pay taxes and social security and then when you're old social security will pay you to live. But didn't they mention the inflation factor. By the time you're old and have to live on social security, the amount it pays out is no longer enough to live. So you'll see 70 year olds working your grocery or big box stores near you. Ask them if they work for the joy of it or if they have to.

What about retirement accounts? Again compare the inflation (increase 2-5% more than the year before), to the rate of return on a money market, CD or ETF stock fund (5% per year would a good year.)

How many years will it take for your money (which you can't touch while invested) to double?

So which option is best? All 3 are necessary since we are currently bound to the Earth. But wisdom is key. Using #3 is the key to overcoming the limitations of #1 and #2.

Life Plan: Wisdom, Faith and Math

Have you heard the financial advice that starts off “Where do you see yourself in 5 years.” For years, my answer was “I have absolutly no idea.” I just knew I'd like it to be better than it currently is. I didn't know where it was, how long it would take or how much money was needed to get there. Once I learned the double factor things got really clear.

The doubler factor. The first tool you'll need is the doubler factor. You've probably heard that “Time is money.” That's not very precise. But they are related.

Lab Experiment: Take a calendar and a bag of rice. Place 1 grain of rice on day 1 of any month. Then double it for the next day. Day2: 2 grains. Day3: 4 grains...

at day 30 you'll need x?

By day 30, doubling every day, you'd need 536,870,912 grains of rice — roughly 11-12 tons. Almost nothing happens for the first two weeks, then the growth explodes in the last few days. That is the nature of compounding: slow, invisible growth followed by a sudden, massive increase.

What is a fold? Try folding a piece of paper or a blanket. When you fold it the edge now has 2 layers. Fold it again and you have 4 layers. So a fold is not a times factor (10 times, 100 times). 1 grain of rice x 100 would be 100 grains not x. So a fold is an exponential factor. A fold is the seed^2.

Time is important in prosperity and wealth. The calendar example was a daily doubling. Calculating the TIME TO DOUBLE is the best factor I've been taught for LIFE PLANNING.

When you look at anything consider how much time it will require of your life, attention or money. At 5% per year with an investment of $1000 look how long it will take to double your money.

The Rule of 72

Rule of 72: Years to double ≈ 72 ÷ interest rate. At 5% per year: 72 ÷ 5 = 14.4 years to double.

So if it takes 30 years to turn $1,000 into $4,300, how long will it take to save up for a $200,000 house? Will you still be on Earth?

Now if a house costs $200,000 and you mortgage it at 5% for 30 years, how much will you actually pay for it? Note: to avoid PMI (mortgage insurance) most lenders want 20% down, so to start you must have $40,000, leaving a $160,000 loan. At 5% over 30 years (360 monthly payments), the payment on that loan is about $859/month. Over 30 years that's roughly $309,200 in mortgage payments alone — about $149,200 of which is interest. Add the $40,000 down payment and the total cost of the house comes to roughly $349,200 — for a house that was priced at $200,000.

Not to mention in 30 years you'll probably have to spend another $50,000 to fix it up. By the way, we haven't talked about taxes and insurance yet. So a house really isn't an investment — unless you're renting it out and earning a profit from it.

So if you earn $20 an hour and DID NOT have to buy food, rent, gas or pay taxes it would take 20,000 hours, or 500 weeks at 40 hours per week, or 9.6 years. More like 28 years after paying all of those other costs. But that doesn't factor in inflation. So gas, food, everything will cost more in 28 years. I also didn't put any entertainment or travel in this example.