How to Know if This Book Has Been Written for You

For the Christian, the answer is two fold: (1) to provide financially for the needs of your household, and (2) to increase your assets in order to serve God more fully. This section is designed to help you do both.

If you're like most Americans these days, you look with bewilderment at the flood of investment opportunities passing before you. You're not only being encouraged to invest in mutual funds, but also to day trade stocks, IPOs, commodities futures, stock and index options, and other complicated securities. You're even told to invest by borrowing against the equity in your home.

During the past twenty years, the variety of financial opportunities available to the average investor multiplied greatly. For most people, it's too much of a good thing—this "option glut" often serves to paralyze them. Many of the alternatives seem very complicated. Strategies that used to occupy only the wealthy now appear to be urged on everyone. Even everyday economic decisions that should be routine seem to require as much research and planning as a takeover of one major corporation by another!

FINDING YOUR WAY IS NOT MADE ANY EASIER BY THE INVESTMENT INDUSTRY

To a large degree, any intimidation felt by the average investor is the result of the way the industry conducts itself. For one thing, investment "experts" make your task of learning more difficult because everything they say sounds so complicated. They create the impression that investing is very hard, and that it might be best if it were not entrusted to amateurs (like you).

And then there's the matter of the industry's preoccupation with making forecasts. It's one thing to help investors make more informed decisions by giving out economic data, corporate profiles, historical trends, and the like. But then to use that information as the basis for market predictions is quite another. The fact is that nobody knows for sure what's coming next year, next month, next week, or even tomorrow. Forecasts from the brokerage community and investment media, at best, are conflicting and confusing. At their worst, they're totally misleading and eventually will prove extremely expensive to any investor who takes them seriously.

MOST PEOPLE HAVE ONLY THE VAGUE NOTIONS AS TO WHAT THEIR LONG-TERM INVESTMENT GOALS ARE. AS A RESULT, THEY MOVE THROUGH LIFE AS RESPONDERS...

. . . deciding on a case-by-case basis whether to say yes to the various investment opportunities that randomly come to their attention. Their thinking is short-term. Depending on their mood that day, or the advice of a friend who's in on a "good thing," or even how persuasive a salesperson is, they make a decision whether to invest. Often, they give little thought as to exactly where that particular investment fits in fulfilling their long-term goals.

Responders feel a need to "do something" when a major news story hits. Because they're not quite sure where they're going, they tend to watch the crowd to see where it's going. They begin listening for the hot tips, taking the gurus seriously, and putting too many eggs in the same basket. They might realize they're going somewhat out of bounds, but they're looking for that extra edge. The problem is they're drinking from "broken cisterns." The crowd and the experts don't know what's coming next any more than they do.

IN ORDER TO FIND PEACE OF MIND IN YOUR INVESTMENT DECISIONS, YOU NEED TO BECOME AN INITIATOR RATHER THAN A RESPONDER.

Initiators have a concrete game plan in mind. They have made the effort to develop a strategy that specifically takes into account their long-term financial goals as well as their own personal investment temperament. It is shaped around what they hope to accomplish in the future, and it fits who they are "inside."

Make it your goal to become an initiator! Be like a shopper at the food market who buys only those ingredients needed to prepare a specific recipe. Before she goes to the supermarket, Cindy knows what she's looking for. When she is confronted with special promotions for products that aren't on her shopping list, she readily passes them by. Cindy won't need to spend any time at all considering whether to buy them because her shopping is purposeful. Similarly, before you begin to invest, put together a strategy that takes into account the risk of loss you can comfortably carry both financially and emotionally.

IF YOU'RE READY TO SPEND A LITTLE TIME LEARNING A FEW BASICS, YOU CAN BE OF GOOD CHEER. THIS BOOK IS WRITTEN ESPECIALLY WITH YOUR NEEDS IN MIND...

. . . to equip you to have the confidence to take charge of your financial life—to become an initiator. I plan to help you do this in five primary ways.

1. I'm going to teach you only what you need to know, not all that there is to know. (That should be pretty good news, right there!) I don't take the "complete guide" approach. Instead, I assume that you just want the basic essentials for now. And put that way, there really isn't all that much for you to learn. Just as you can throw a wall switch and enjoy the benefits of electricity without understanding how it all works, so it is with mutual funds. I will cover just enough information here to teach you to "throw the switch" that will enable you to establish a practical (and relatively easy to supervise) long-term investment strategy.

2. I'm going to give you a framework for setting priorities on how to spend (or invest) your monthly surplus. It's based on working your way through Four Levels toward financial security. If you have consumer debt outstanding (Level One) or lack a sufficient contingency fund (Level Two), I believe it's best to apply your surplus in those areas.

However, that doesn't mean you are free from making important investment decisions in connection with stock, bond, and money market securities. If you have an IRA, you've got the responsibility for managing it. Or perhaps you have a pension plan at work, like a Keogh, SEP-IRA, or 401(k), where you are allowed to make decisions as to how your account is invested. Perhaps you've purchased a variable annuity, which offers you similar choices. These retirement investments represent money that was set aside in the past, and although you may not be adding to them at present, you still must decide how best to invest the money that's already there.

To one degree or another, you will do a better job of making these decisions if you have a basic understanding of the investment markets. Even if you're still at the first two levels, you can begin to build your understanding of investing principles. Then, when you have larger amounts to manage in the future, you won't need a crash course—your knowledge and confidence levels will be up to the task!

3. I'm going to introduce you to four basic investment temperaments—four approaches to risk-taking. In chapter 17, I'll lead you through a process of discovering which of the four is most appropriate for your basic emotional makeup and financial situation. Once you learn this, you'll have a yardstick for measuring risk that will be helpful to you for years to come.

4. I'm going to teach you in an extremely user-friendly way. The lessons are worded in everyday "plain-English" language, and come in small, easy-to-digest portions. Also, I've put lots of extra time into making the layout and design of each page as clear, interesting, and easy-to-follow as possible.

5. I'm going to base all of the above on the time-tested principles taught in Holy Scripture. There's nothing new under the sun, so you should not be surprised to learn that the underlying values and priorities that shape the very practical strategies taught in this book are merely the outworkings of concepts taught in God's Word for centuries. Investing at the beginning of the twenty-first century, we may be tempted to feel we have grown too sophisticated for biblical lessons. In truth, the current census and economic statistics reveal that our need for biblical truth is more serious than perhaps we realize. Individually, and as a nation, we have built our financial houses on the sand and are reaping the consequences. We dare not ignore God's wisdom any longer.

I HAVE DEVISED THIS BOOK TO SERVE AS A TOOL TO HELP YOU FOLLOW THROUGH AND BUILD ON THE BIBLICAL PRINCIPLES THAT LARRY BURKETT, RON BLUE, AND OTHERS...

. . . have written about so well. Where they usually stay with general principles, I want to take you the next step—showing you how to apply those principles in specific ways out in the financial marketplace. I've often used the analogy of learning how to "dress for success." Books that teach fashion concepts (including information about fabrics, color coordination, fit, and style) help build an understanding of the basics. But you still need to get in your car, travel to the local mall, and purchase your wardrobe.

I think of myself as the person who goes with you, helps you pick the clothes out, watches you try them on, and offers you opinions on whether the style, color, and fit is a good one for you. I also know a few things about the reputations of various stores and clothing manufacturers, and steer you away from the bad ones.

In order to avoid information overload, you need to develop a sense of proportion. Everything doesn't have to be learned or done yesterday. There's no such thing as "wealth without risk," so accept that you'll make a few mistakes along the way. But that's OK. You'll do fine over the long haul if you follow the basics, exercise self-discipline, and stay the course.

BEFORE YOU BEGIN YOUR STOCK AND BOND MARKET INVESTING, HOWEVER, YOU NEED TO ACHIEVE A CERTAIN LEVEL OF FINANCIAL FITNESS...

. . . to see your doctor for a physical exam before launching out on a new exercise program. Think of it as practicing financial aerobics. Now, I know working out isn't any fun. Personally, I haven't gone to work out at the fitness center in several months. Not once. Nada. Zero. Zip. I'm too lazy.

My workout schedule usually goes something like this. I work out faithfully for three months, starting in early March, to get ready to go out in public in my beachwear. Then, it's off to the beach where I have a great time with family and friends. Upon my return, I carefully avoid the fitness center until the following March. During the recurring nine-month periods of well-deserved rest from exercising, I've made a discovery. It's tedious, hard work to get in shape, but getting out of shape is remarkably simple. All you have to do is . . . nothing. Just relax. Stop investing time in it. It's amazing how easy it is to get out of shape. I wish it weren't like that, but it is. Being in shape, it turns out, has a very short shelf life.

We all would like great health and physical fitness, but only the people with self-discipline achieve such goals. Other areas of life are the same way. Invest time, commitment, and sacrifice in your marriage or dating relationship, and it grows stronger by the month. Replace that with neglect and making decisions just to please yourself, and the relationship weakens. The same is true of your career and a host of life's other activities—including your financial affairs. They also need time, commitment, and sacrifice in order to be healthy and grow. Are you in shape financially?

If you're not, I'm writing this book with the assumption that you're serious about making progress. At the very least, you've got good intentions. I'm hoping that this book will help those good intentions lead to determined action. Now, let's get started with your financial fitness tests to see just what kind of shape you're in!

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