7 Steps to Financilal Freedom.

We live in a society based on consumption and fueled by capitalism. Neither of which are necessarily bad at face value, but can often became enslaving and even destructive when mixed with greed and/or frivolity. Our entire financial system is based on the expectation of inflation: mortgages are designed around the expectation that the properties value will go up; credit cards are given out and limits increased to keep people at the edge of there speeding ability and indebted to their creditors; annual "Cost of Living" raises are expected by employees so the cycle can continue on indefinitely.

What happens when inflation is no longer the constant, and deflation sets in? We start hearing words like "Mortgage Meltdown" and "Financial Crisis". Houses are no longer worth the "100% financing" loans they have on them. Businesses that have leveraged dept to get ahead can no longer sell there products for enough, or in high enough volumes, to pay their lenders. This results in layoffs that cause people to loose their ability to pay their numerous bills. In an attempt to "fix" the perceived "problem" the federal Reserve starts pumping trillions of dollars into the financial markets hoping to regain inflationary momentum; encouraging cheap loans to people who can't afford them. In the mean time, people like you and me, stuffer in the crossfire.

So what do we do about it? Try to play the game with the big boys, the way they want it played, with tax shelters, Limited Liability Business shelters, and other businesses dealings that you can trash when things get tough and they go under - hopefully without trashing your own credit and reputation? Maybe try catching the benefits of a government bailout along the way?

Perhaps what we should do is avoid the quick and easy "got'a have it now" attitude that leads to indebted slavery and despair, and instead follow the council that Modern Prophets have been giving us over the last century:
"Joseph F. Smith advised . . . 'get out of debt and keep out of debt, and then you will be financially as well as spiritually free' (In Conference Report, Oct. 1903, p. 5) . . . there are certain basic principles that we . . . can apply, such as: 1. Live within your income. 2. Prepare and use short- and long-term budgets. 3. Regularly save a part of your income. 4. Use your credit wisely, if it is necessary to use it at all . . . 5. Preserve and utilize your assets through appropriate tax and estate planning." - Franklin D. Richards, “Personal and Family Financial Preparedness,” Ensign, May 1979, 38
I've many times been thought in church about living within our means and staying out of debt, but for some reason I never really got it until I listened to a man who had a very specific and detailed plan: Dave Ramsey. While his plan works extremely well for anyone willing to put in the effort, I find myself wanting to take a slightly different approach, and believe there are people who need a little more flexibility in their planing. Either way many of the same principles apply, and go right along with the council I quoted above.

Here are my steps to financial freedom. The order of these steps is important, but depending on your situation you might find yourself able to skip one or two of them; not because you don't have to do them, but because you're already doing them.

  • Step 1: Get caught up
Heber J. Grant said, “If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means, and if there is any one thing that is grinding, and discouraging and disheartening it is to have debts and obligations that one cannot meet” (Relief Society Magazine, May 1932, p. 302).
This mean having a budget. Before you catch up with your finances you must first make a budget. This is essential because if you don't know where your money is, where it's coming from, or were it's going, you'll never know if you're getting ahead or further behind.

I don't care what kind of budget you use, as long as it works well for you, and you can do it consistently, at least once every month, for the rest of your life (Dave Ramsey has a couple of excellent methods for tracking budgets). The first thing I put at the top of my budget is tithing (and other Charitable contributions) that I pay at least every month. As I've done this, I've always had enough to take care of my needs.
See my notes on a speech I gave about paying tithing.
The key to being successful financially relies entirely on budgeting, or in other words, telling your money what to do for you, instead of being a slave to it.

  • Step 2: Sell and dispose of vices

    ". . . people are heavily in debt for things that are not entirely necessary . . . build a modest home . . . pay off the mortgage as quickly as [you can] so that, come what may, there [will] be a roof over the heads of [your] wife and children. I urge you . . . to get free of debt where possible and to have a little laid aside against a rainy day." - Gordon B. Hinckley, “The Times in Which We Live,” Ensign, Nov 2001, 72
This step sometimes needs to be done before step 1 can be fully completed, but you likely will not understand what your vices are until you've at least started step 1; in fact it may take a few months or more of working hard at step 1 before you truly understand what needs to be done in step 2 so that step 1 can start working for you.

So what is your vice? For some it's a big expensive house. For others it's a nice car, a boat, or even credit and consumer cards used for shopping any time one feels a little down or thinks they "need" that new pair of overly expensive shoes. What ever it may be, you need to shelf it long enough to get a grip on reality and get to where you can be more responsible about it.

I would even go so far as to say, anything you cannot get paid off in the next few of years needs to be sold; excluding any real-estate - unless that real-estate is just too expensive for your budget. Any credit cards you cannot pay off every month, without fail, need to be cut up. If you do not have the discipline to use credit cards appropriately, they need to be closed; ALL of them. Try using a debit card instead, but if you really have a hard time keeping track of expenditures, you may need to go to an all cash basis; Just as Dave would advise. And I don't care who told you credit cards are safer, if you can't handle the, they are extremely dangerous to your finances.

  • Step 3: Emergency fund
This step should be completed as soon as possible; however, it's listed 3rd because it usually requires steps 1 and 2 to be done before one can get a good enough handle on things to be able to complete step 3. In fact the first three steps can be done simultaneously if you like, but its usually best to take things one step at a time.

Setting aside a little for a rainy day can bring more peace to you financial perspective then just about anything else you can do. Plus, once you're able to set aside some money and save it, you start to find saving money comes much easier. The amount you should save should be significant enough to cover any insurance deductibles or co-payments and/or unexpected repairs or other expenses that might come your way.

However, don't save up so much that it unnecessarily delays moving on to step 4. A thousand dollars is probably a good place to start, and I would recommend at least this much, but no more then a few thousand, even if you can save it quickly. If you end up using this fund, you'll need to come back to this step until you replenish it, so be sure to budge wisely enough that your emergency fund is only used for true emergencies; not something you just forgot to budget for, or think you "need".

  • Step 4: Dept Pay-off
Some people spend all kinds of time trying to figure out how best to minimize how much they will end up paying in interest, or find fancy ways to pay of a mortgage faster by paying extra or paying early. The problem with all this is that it gets very complex, and usually ends up not helping very much if at all. In fact focusing on the highest interest rate loans first, is rarely the fastest way to get out of debt for one main reason: most loans have a minimum payment amount that includes some principle as well as the interest.

Eliminating that principle payment as quickly as possible, by starting with loans with the smallest balances first, frees up extra money in your budget much faster so it can then be re-applied sooner to other loans, and of course the sooner you pay of a debt, the less interest you end up paying on it. It also helps you gain a quick win which can be very motivating.

Personally, I like Dave Ramsey's theory of Focused Intensity were you start with the smallest balance and work your way up to the largest. It start with finding as much extra money as you can from your budget, by living on as little as possible, to use exclusively for paying extra on your smallest debt. The more you do without extras, luxuries, entertainment, etc. the more extra money you'll have to pay things off with. Once that smallest debt is paid off, move onto the next smallest debt using the extra money from your budget, and the money you are no longer paying to the debt you've paid off. Continue this cycle until you have everything paid off, except your house (and any other real-estate you own that is paying for its self - if it's not paying for itself you might consider it as part of step 2). By the end of this step you may find yourself paying a thousand dollars or more a month on you highest balance, high interest rate, loan.

  • Step 5: Security Blanket(s)
When many of us were little kids, we had a blanket that as we got older we didn't want to give up. Often called a Security Blanket because it helps you feel safe. So how much money would you need saved up to feel safe from a catastrophic event, such as loosing your job? How much do you need to survive for a year?

That's right, how much would you need to pay for basic necessities for an entire year? If you have a lot of debt and monthly obligations, this is probably a full years salary for you; however, if you are out of debt, no "same as cash" obligations, or other monthly subscriptions/installments, you'll find you can survive off of very little, and very little for an entire year isn't all that much. I'd suggest saving 20-40% of your annual pay in an easily accessible money market or savings account (with a decent rate of return of course). You don't have to do it all at once, but if you start saving the money from your debt snowball, you'll have it faster then you might think. This should help you realize how quickly the money (not over night, or get rich quick of course) can build up just by using your income from you're regular job; with no gimmicks or risky investments needed.
"'. . . Plan to build up your food supply just as you would a savings account. Save a little for storage each paycheck . . . Make your storage a part of your budget . . . If you are saving and planning for a second car or a TV set or some item which merely adds to your comfort or pleasure, you may need to change your priorities. We urge you to do this prayerfully and do it now.' (Ensign, Nov. 1980, p. 33.) . . . One of the important keys of home production and storage is the acquisition of skills. Sometimes we may be able to buy food inexpensively, but the skills and intuitive wisdom gained through gardening and other home production projects are worth more than the time and effort they require. In a sustained emergency, basic gardening, sewing, repair, construction, and production know-how are invaluable. Provident living helps us develop these skills—and build family unity by doing it—before an emergency." - “Catching the Vision of Self-Reliance,” Ensign, May 1986, 89
This safety blanket doesn't have to be just money, but it does have to be something that you can use to survive with, such as food storage, or even a garden. If you have enough food storage to last a year, then you don't need as much money saved up to last for a year without any income. Some say Gold, sliver and other precious metals are also good insurance against monitory problems (I have some myself); however, keep in mind that gold (or cash) isn't very tasty or nutritious. If I could choose between gold (or cash) and food when both were hard to come by, I'd stick with the food.

  • Step 6: Invest
To truly grow wealth, you have to make your money work for you, so that you don't end up working your whole life for your money. Still the best way for anyone to grow wealth is with the income they will earn over your life time of work. All I can really suggest here is to be wise in your investments, and look for investments with good track records of longevity and stead returns.

Get to a point were you are saving at least 10% of your income, which shouldn't be hard at this point if you've done all the steps in order. Certainly the more you can save and invest the more money you will have working hard for you. However, I must give a warning: don't try to save every last penny and turn yourself into Scrooge. Just as being in debt causes you to be a slave to your money, so can wealth if you get too greedy.

Try putting some of your savings aside to invest in your kids education. Give a little extra to charities, and even save up for a new car or house (see how much fun it is to pay for it with cash) or some other vice that you've had to do without for the few short years it took you to get to this point (that's right, Dave has testimonials from people who get to this point within a couple of years when they are truly focused on it). Just make sure you keep your expenditures within your budget without compromising your ability to continue giving and saving at least 20-30% of your income.

  • Step 7: Pay Off the house
It may take many years to get to this point, depending on how dedicated you are to getting out of debt, but once you are here, it shouldn't be too difficult to complete this step. If you do find it difficult, then you haven't learn anything from completing the previous steps.

You'll hear a lot of people talk about how you "need" to have a mortgage to save on taxes, or to keep a good credit score. These statements have some truth to them, but if you take a closer look at the amount you'll save on taxes you'll likely find it's only a fraction of what you are paying in interest charges on the mortgage. Not to mention the extra risk, obligation, and financial bondage you are in any time you finance anything - including a house.

What about a credit score? If you've gotten to this point, you might find that really don't need one because you'll never buy anything with credit again! At least that's how truly rich people do it (read the Millionaire Next Door). The only problem I've found with this is that some employers want to see a good credit score before they will trust you. (Some bussnesses do the same, but they aren't impossible to avoid). However, it really doesn't take much to keep your credit score looking half way decent, and can be done without compromising your financial freedom; or having a large risky mortgage payment (take out a small loan every few years and pay it off after six to nine months, keep a credit card open that you never use, and keept your bank or credit union happy with you, and you'll be just fine).

- Posted by S.J. Hollist

Mormon Temples on Nightline

Mormons Open Doors to Discuss Religion:

"Ever since the first Mormon temple was built more than 150 years ago, they have been the subject of speculation and suspicion. The temples are imposing structures where private and sacred rituals are performed, and where outsiders are almost never welcomed.

But this week, two of the church's 12 apostles invited ABC News to tour a new temple in Utah. Elder Russell Ballard and Elder Quentin Cook, who are at the very highest level of the church, also sat down for an unprecedented interview.

"We want to be understood, not misunderstood," said Ballard, "and people are defining us in the wrong way. They're defining us without having the facts.""

Full Story here . . .

- Posted by Spaldam

U.S. Presidential Inauguration 2009

I've always considered myself to be someone of a moderate and yet still rather conservative in many ways. Despite the supposed liberalness of Obama, while listening to the Presidential inauguration this last week, I found many of his words to be particularly inspiring and truthful.

In particular he said, ". . . our economy is badly weakened - a consequence of . . . our collective failure to make hard choices . . . the challenges we face are real.  They are serious and they are many . . . but know this America, they will be met.  On this day, we gather because we have chosen hope over fear.  Unity of purpose over conflict and discord . . . the time has come to set aside childish things. The time has come to re-affirm our enduring spirit, to chose our better history, to cary forward that precious gift, that nobel idea . . . that God given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness . . . greatness is never a given.  It must be earned . . . it has been the risk takers, the doers, the makers of things . . . who have carried us up the log rugged path towards prosperity and freedom . . .  these men and women struggled and sacrificed and worked until their hands were raw, so that we might have a better life . . . this is the journey we continue today.  We remain the most prosperous, powerful nation on earth . . . but our time of standing pat, and protecting narrow interests and putt off unpleasant decision, that time has surly past. Starting today we must pick ourselves up, dust ourselves off, and begging again the work of re-making America.  For everywhere we look, there is work to be done . . . some question the scale of our ambitions . . . there memories are short, for they have forgotten what this country has already done. What free men and women can achieved when imagination is joined to common purpose, and necessity to courage . . . Our challenges may be new, the instruments with witch we meet them, may be new, but those values upon which our success depends: honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism; These things are old.  These things are true. They have been the quite force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility . . . we have duties to ourselves, our nation and the world. Duties that we . . . seaze glady.  Firm in . . .  giving our all to a difficult task . . . God bless the United Stats of America."

He stressed a need for unity within our nation to help fight off rumors and threats of our downfall.  I found a glimmer of hope that our federal government might get back to the things it's done best over the last century, and away from things it has done poorly.  Certainly many of the ideas he mentioned in his speech were debatable as to how effective or appropriate they will be, but I hope that he will have an objective and constitutionally sound view of what will work, and what is appropriate.

I still have a great deal of concern for many of the things I've heard are in Obama's agenda, but the more I get to know him, the more I find myself hopeful that he will make the right decisions to enable our country to stay hard at work; keeping it the greatest country on this earth.  He even talked about staying true to the values our founding fathers tried to instill into our government, and the hope that staying true to those values will allow America to once again be good example to other nations; ultimately making the world a safer place.

Leaders from my own church were present at the inauguration and expressed similar sentiments:

Church Leaders Attend President Obama’s Inauguration - LDS Newsroom

I was particularly pleased that Obama allowed God to be present at this event, and showed respect to the Almighty in many way; even though not as strongly as other presidents have in the past.

I'm sure as the next four years carry on, I'll find plenty to disagree with Obama on, but I also pray that we see this country make great progress down the right paths.  I find myself agreeing with Obama, that it will not happen without hard work from all of us, which reminds me of the famous words of JFK:  "ask not what your country can do for you - ask what you can do for your country".

- Posted by Seth Hollist

The right to life and choice

At the time of this posting, the Family Research Council was hosting the fourth-annual Blogs for Life event. Blogs for Life is the premier gathering to discuss online activism in the pro-life community. At www.frc.org they will have a live webcast of the event from 8:30-11:30 am featuring prominent pro-life voices such as Sen. Sam Brownback (R-Kans.), Amanda Carpenter, Jill Stanek, Danny Glover, Peter Shinn, Michael New, Ph.D, Charmaine Yoest, Ph.D., Michael Illions, Chris Gacek, J.D. and Martha Shuping, M.D.

Recently I've had discussions with a couple of people about the right of a woman to choose vs. the right an unborn child has to it's life. In both discussions we agreed that a simple blanket statement of "Pro-Life" does not do justice to our points of view on the matter, though we would most likely be lumped together into this "Pro-Life" group. Certainly I believe life is very  precious and that the experiences we have in this life are extremely important to Gods plan for us; however, were does that right to life begin to interfere with the right of an individuals free agency?

Free agency is of course a whole other discussion, but I've always believed that ones rights stop when they starts to interfere with another's free agency. In other words, I can choose to do what I want so long as those choices do not have a significant impact on someone else's ability to choose for themselves. What this means for the life of an unborn person, is that the unborn do not have the right to threaten the life of their mother. Likewise, nobody should not be allowed to deny the unborn their right to life.  A life I believe each of us chose to embark on.

So who gets to decide what constitutes if the right of he women is more important, or if the life of the unborn is more important? We'll in most countries the law is very clear about killing someone. It usually cannot be done legally without some kind of a trial. Why should it be any different for the unborn? Certainly a full on trial isn't something a rape victim who is trying to put the ordeal behind them wants to endure, or someone with a life threatening complication has time for.

My suggestion is not a full on trial, but rather a certificate or acknowledgment, much like a warrant, signed by either a doctor or a judge that signifies the abortion is not simply for selfish reasons. Rather, that the abortion is being done because the life or livelihood of the woman is at significant risk.

Certainly I would hope that we could find better ways to deal with the things that lead up to these issues, such as exercising restraint, and not giving up on tomorrow for a little fun today. I would hope that we'd see sexual activities as something reserved from married couples who truly love each other; as apposed to a lustful and disrespectful recreational activity driven by hormonal passions that are often misunderstood as love. For those who mess up, I would hope they would take responsibility for their actions and consider alternatives, such as adoption, or even starting a family when possible.

- Posted by S.J. Hollist

2009 Lone Star Toyota Jamboree

I was at the 2009 Lone Star Toyota Jamboree this last weekend. Just like last year, I got a lot of photos and had some good fun.

I was originally going to head out Thursday afternoon, but after spending too much time getting ready, and taking care of other things at home (not to mention it was going to be a cold night) I decided to sleep in my warm bed one more night and leave Friday morning. Well I was slow getting going Friday morning, but eventually got to Gilmer and then up Barnwell Mountain.

After getting registered, I when to the pavilion to find a beginners class in progress, so I listened in, and then volunteered to take up the rear in a caravan to tour the park. After I found the same camping spot I was in last year, unloaded the firewood I had brought with me, and made my bed in the back of my FJC, just as I have always done on overnight off-roading trips.

We had a "chilly dinner" / "meet-n-greet" that night, and the next morning was the drivers meeting but not before eating some donuts.

I didn't brave quite the same level of trails I did last year, and ended up feeling somewhat unchallenged, but I also didn't want to take as big of a risk as I felt I did last year.

I felt a little disappointed Saturday morning with the trails I had been on, but Saturday afternoon we took some that were a bit more challenging. Maybe next year, if I've been able to at least upgrade my tires by then (not likely as they seem to be wearing quite well), I'll feel more confident with some more challenging trails.

And of course there were those with the really built out trail vehicles that did some timed competitions:

Finally, Saturday night we had a BBQ dinner and a raffle. I didn't win anything this year, but one guy seemed to win about half of the items.

One more night of camping, and I was headed home.

- Posted By Spaldam