This program will help you undo financial bondage.
We’ve all heard about major league sports athletes, singers, musicians, and other famous people going broke after having made enormous incomes from their talents and fortuitous opportunities. The minimum salary for major league sports athletes approaches $500,000 per year and continues to rise for those new to the league. In addition, they normally get generous raises when their service stretches into successive years even if they sit on the bench all those years.
Many of the other celebrities don’t have minimum salary tables. Their income is dependent on how many of some product, service, etc. their work or persona can sell. Yet, we’ve all seen the ‘Cribs’ shows that give us a glimpse into the opulent mansions and array of expensive cars they sport; at least the low percentage who have made it big. We also hear that they purchase clothes, jewelry, and other items that cost tens of thousands of dollars a whop.
Despite the high incomes many have earned for at least a few years and some for many years, we continue to see in our communities those who have returned and hear of a great number who are pretty much broke not many years after they reached the height of fame. What seems to be the greatest culprit is the fact that they stopped making the same amount of money.
Other situations that seem to play a part are the average longevity for being on top in the entertainment arena is a few years and the fact that many of the industries either don’t have pension plans these former stars can draw upon when they are seniors or the plans pay a fraction of what they earned during their careers. This is exacerbated for those who spent many years in the industry and made the highest incomes. Finally, some don’t have much formal education or generally needed skills to fall back on once the high income has turned into much lower income.
However, all is not as it seems. What really caused them to go broke is the fact that they did not follow God’s universal instructions for managing money and resources that can be found in the bible. Instead, they chose to follow the path that they see so many of their comrades follow and that the world teaches and examples for them: the minimum salary makers trying to live like the icons taking on more debt than they receive in income. Sure there is a low percentage who never lose all the fame and the high incomes that go with it. Yet, there are many more that will only have their moment or few years of fame and then their incomes will drastically change. If there’s one thing history has shown us it is that even icons can fall and lose it all.
Let us all take a lesson away from this; we must use wisdom in managing current incomes and our lives. On an eternal scale no one can escape the negative consequences of failing to live out the following principles and most people never escape the earthly consequences of such failure. Therefore, you should resolve to:
1) Recognize that everything you have is God’s and has been provided for you to manage while on earth. You are only a manager who should look to the Owner for instructions on how to manage money and resources.
2) Honor God through tithing and offering the moment you receive each portion of income. Give to ministries and charitable endeavors that please the Owner’s heart and help you fulfill your purpose while on earth.
3) Sacrifice short-term opulent purchases for deferred gratification and long-term comfort when you most need it by living within your means. Even though it’s difficult to see from the current vantage point, remember if your outgo exceeds your income, your upkeep will be your downfall!!!
4) Stay away from and eliminate all debt; high interest debt first. Plan and budget to buy debt-free mansions (houses), cars, and other desired merchandise.
5) Do not cosign loans for anyone and avoid all the cousins who crawl out of the woodwork to help you spend your newfound fortune.
6) Save a substantial amount of your income in liquid accounts to help you make it through eventual downturns, rainy days, emergencies, and catastrophes. Put away at least 6 months of income and even more if you’re in an industry where pay is uncertain from month to month and year to year.
7) Invest a sizeable portion of your pay in good high quality vehicles that have a history of significantly higher growth than the inflation rate. At least 10% starting off and then more as your income grows. Very high income people may want to start off saving and investing at least 30% of their income.
8) Diversify your investments into seven or eight trustworthy institutions and vehicles. While you should have a multitude of counselors, it is not best to let any one person have power-of-attorney or ability to spend your income and assets; not your agent, attorney, accountant, manager, personal assistant, etc. Generally, it is best that you and your spouse maintain such control and give specific instructions when you want any of your helpers to handle specific financial concerns for you.
9) Work with your attorney and other financial professionals to craft a will, trusts, durable power of attorney and other estate plans that work best for you and your family in case of an early demise.
Though situations can differ a basic plan for a beginning high income earner might look something like the following. You make $1 million and receive $600,000 after taxes. You forsake debt and tithe, offer, and give to the needy $112,000. In the first year, you save $300,000 in your emergency fund (6 months take home pay), rent a nice apartment for $2000 per month ($24,000 annually), buy a $30,000 car debt-free (two year old Cadillac, Lincoln, Jeep, Lexus, Mercedes, etc.), invest $86,000 in a diversified portfolio of mutual funds, stocks, etc, and keep $4,000 of monthly spending money ($48,000 annually) for groceries, utilities, insurances, personal needs, and desires.
The second year, you might tithe, offer, and give $$124,000. You would probably not need additional emergency savings, you continue to live in the apartment, keep your debt-free car, invest $300,000, and increase your monthly spending money to $5,000. The remaining $92,000 would be put into a high-yield money market account for an eventual home purchase after your fifth year of earning such high incomes.
At this point, you would likely have over $300,000 in your emergency fund and over $1.5 million in your investment accounts to help you through a downsizing and build for the future. Increases in pay could be used to increase giving and the home fund. If longevity in the industry and high yearly incomes seem inevitable for you at this point you could purchase a home for no more than the cash you have diligently saved in the fund (at least $368,000). If not, this money could be spent on a home that would accommodate your new income level and the remaining amount should be put into your investment accounts and allowed to grow for your latter years when you’ll need the comfort and resources more than you do now.
Though this plan is not perfect, no plan is. However, a plan based on the right principles is better than no plan or one based on wrong-headed principles. The latter plans include willy-nilly spending and purchases to impress others and will ultimately leave you like a former athlete we know; broke, busted, and disgusted. We don’t want you to end up in that position when you have an ability to do better and bring honor to God in the process.
Please pray for this ministry and email any questions. May God bless you richly as you follow His plan!!!
Genesis 1:27, Exodus 19:5, Psalms 50:10, Ecclesiastes 12:1, Ephesians 3:9
Please forward these bondage breaking articles to other people who can use helpful insight!!!
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