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FINANCIAL LIBERATION
By Pastor Delbert Young

3. Interest - Ally Or Enemy, Friend, or Foe?

(video audio page)

Interest - Ally Or Enemy, Friend or Foe?

Scriptures: Proverbs 21:20, Proverbs 10:4, Proverbs 22:7, Matthew 6:24

Jesus told about the man who took what God had given him and did not increase it. Have you ever wondered how it is those who have, get more and those that have less loose what they have? Does this seem fair to you? Today I hope we see a part of the answer. Handling money correctly will give us more. Handling money incorrectly will take what we do have and give it to someone else who has more. Interest will make you have more or have less. It's according on which side of interest we live.

Interest! Is it our alley or enemy? Is it our friend or foe? I want to begin this lesson with a true story about my wife and I. We had only been married a few years. She was working at a finance company. The year was 1971. Her boss attempted to convince her to borrow $500 and buy Walmart stock. She told him that we could hardly pay our bills and buy groceries. She said that I (her husband) would never agree to doing that because we were struggling to survive. But what if we had done that? What if we had borrowed $500 and somehow gotten it paid back during that year, bought $500 of Walmart stock and never added another penny to it? How much would that $500 be worth today? I called my financial consultant at Edward Jones and asked him to figure it for me. He called the home office and they sent me a letter. How much do you think? Let's make this interactive. On the screen are four choices. How many think it would be worth: (A) $12,243.50; (B) $91,243.50; (C) $291,243.50; or (D) $912,433.50? If you said, "(D) $912,433.50" you are smart. The most powerful thing about this is $911,933.50 is the interest earned.

We didn't do this and we are really kicking ourselves. I keep thinking that one day Judy will say, "Delbert, you know that $500 Walmart thing from back in 71? I really did it." But I don't think that is going to happen.

Negative interest is bad. I don't think we know exactly how bad. Even though we know better, sometimes we get careless and get behind on paying off our credit cards. We don't pay them off as we promised we would do. We do the minimum thing and find that seemingly overnight we owe thousands of dollars to high interest credit cards. The credit card companies want us to pay the minimum. The national average balance for a credit card is $7,000.

Save wealth.com says, " . . . analysts are cautiously urging Americans to be more credit smart. Revolving credit card debt is now at a record $569 billion, with the average card holder holding an average $7,000 of credit card debt. Now more than ever, maintaining a good credit history is critical to good financial health."

For the sake of our study, let's say I am below the average credit card debt. Let's say that I only owe $4,000 on my credit cards. Do you know how much I would pay and how long it will take me to pay off an 18% $4000.00 credit card paying the minimum and never putting another penny on the card? Let's make this interactive. On the screen are four choices. Is the answer: (A) $6,321.15 and 9 years; (B) $8,987.85 and 11 years; (C) $12, 555.33 and 13 years; or (D) $14,931.65 and.42.3 years?

The answer is (D) $14,931.65. It would take me 508 months or 42.3 years. If I am still alive at 95, I would have payed $10,931.65 in interest alone. Now let's see. What could I have done with nearly $11,000?

Where do I get these figures? Today it is simple. There are several web sites that will do it free. I just put in the numbers. Here they are for your reference. One site is http://www.webwinder.com/ 

Let's reverse this process. What if I had $4,000.00 and I would never be able to add a penny to that money. I put that $4000.00 in an IRA making an average of 10% a year. How much would I have at the end of the same length of time, which was 42.3 years? Is the answer: (A) $14,931.65; (B) $31,333.33; (C) $72, 281.59; or (D) $270,991.15?

The answer is (D) $270,991.15. $266,991.15 is interest earned. Can you believe that? Most people never sit down and ponder the amazing power of interest. If someone were to ask us to list the most powerful influences and forces in our lives, we would say things like love, hate, hope, dreams, prayer, or even money. Very few people would think to put the power of interest in the top ten. We should! It can make you financially or it can destroy you financially.

I told us for the past two weeks that most of us will handle a fortune in our lifetime. Some of us will handle a large fortune in our lifetimes. I have asked, "Where does that money go?" Do you know where it goes? A vast amount of the money that will pass through our hands in our lifetime will go to interest.

Interest is a power. When we get on the wrong side of interest, it can undermine the power of love and destroy the power of hope. It can destroy the power of a dream and annihilate the power of money. Interest can destroy a home or a business. Being on the wrong side of interest can wreck anyone's life. Once in debt, interest works against us. Interest becomes one of our largest enemies. More often it is interest that has messed up our finances and not the devil. Interest has no mercy. It will crush you.

However, if we are on the right side of interest, it will multiply our money. It will multiply the most meager savings into a large fortune. It will reward you, your children, and your grandchildren. It will allow you to bless and to give as nothing else will. It can supply a security that your job cannot supply. It will become one of your greatest allies. Depending upon the side we are on, interest can become our greatest enemy or one of our greatest friends. It will work for you or it will work against you. You cannot experience financial liberation if you pay too much interest.

Our goal today is to make us aware of the power of interest. It can crush or it can create.

(TLB) Proverbs 21:20 The wise man saves for the future, but the foolish man spends whatever he gets.

(KJV) Proverbs 21:20 There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.

We talked about this last week. We need to work off the Biblical "Tithes Plan" which we call "8-1-1." We need a plan. We saw that God will bless us if we are diligence.

Proverbs 10:4 Lazy hands make a man poor, but diligent hands bring wealth.

God will bless our diligence by blessing the work of our hands. Work is a blessing from God. Pennies are not going to fall from heaven. There is no magical thing going to happen. God simply has a financial plan and he is so certain of his plan that he challenges us to test him. I encourage you to get the tapes from the last two weeks or some of the things we have done in the past along these lines.

SIX REASONS TO BE OUT OF DEBT.

1. Debt enslaves a person.

Proverbs 22:7 The rich rule over the poor, and the borrower is servant to the lender.

The Bible greatly encourages saving and greatly discourages borrowing. The Lord desires we be free. When we go into debt, we become servants to that debt. That debt will make us work when we are sick. That debt will rob from our family time. That debt will tell you what you can and cannot purchase.

Is all debt bad? It is according to how we define debt. For example, I view my tithes as a debt. The Bible says that I rob God if I don't pay them. Is that a bad debt? Of course not. One of my tithes is "my tithe" which I invest for my future. It is placed into a portfolio in hopes of appreciating. It becomes an appreciating debt. Appreciating debts are not bad. These are investments. We avoid the depreciating debts.

For example, Judy and I bought our house in 1987. It was appraised then at $75,000. We have lived in that house since 1987. Today it is valued at $120,000. It has appreciated $45,000. That is a 60% appreciation. I also take into account that I must live somewhere. I can rent or buy. I invest in my personal future if I buy an appreciating house. Is my home good debt or bad debt? It is a good debt. It is an appreciating investment much like investing my tithes.

An automobile is a bad debt, but sometimes a necessary debt. I must have a dependable automobile to do my job. I need an automobile to get to work and then get to hospitals and funerals and visit people, and conferences, etc. However, an automobile is a depreciating debt. Over the years Judy and I have been frugal with our automobiles. We have had nice automobiles, but not extravagant automobiles. However, recently I was able to buy my Ram diesel 4X4. And by the way, I pay for my truck. The church does not buy my truck. Once we bought a new Mercury. The list was, as I remember, about $18,000. If I figure the $18,000 plus interest, we paid about $22,000 for the car. We drove it for six years. When we went to trade, we could only get about $6,000 for it. We lost about $12,000, but we had the needed transportation. Was that a bad debt? Yes and no. It was good debt because we needed a dependable automobile. It was bad debt because it depreciated.

Let's do an obviously bad debt. Let's say it's fall and school time. You take the kids and buy school clothes. We spend $200.00 per child (you wish) and have two children. (I know that some spend less and some more. I am after the point.) We reach for Visa and swipe it. Then we pay the minimum instead of paying it off. Let's see how that works out. We begin with $400 at 18% interest with a 2% minimum payment. It will take 62 months or 5.2 years. Those $400 clothes will have cost you $615.45. Where will those clothes most likely be five years from now? Is that a bad debt or a good debt?

Let's say we do this three years in a row. What happens then? The $1200 worth of clothes that you probably were very frugal in buying, cost you $2,531.10 for which you pay 22.3 years. Your kids will be through college by then.

2. Debt brings unnecessary pressure. This is the type of pressure that we are not made to handle. Tremendous stress is added to a life and a family when debt is heavy. I know a man who has been in financial bondage as long as I have known him. He has worked three jobs at times. There is never enough money. He has to make money somehow. So, he works day and night. He has become physically ill. It has caused family arguments. Any disruption in the budget brings chaos. If the car breaks down or the refrigerator goes out, the entire system will collapse. Sometimes he can't sleep. It robs his peace. Interest is killing him. He is exchanging his health and life for interest. Interest is crushing him. We say, "Poor guy." But what about us? What is interest doing to you and me? Our bodies and minds are not meant to bear that pressure.

3. Debt undermines joy. If heavily in debt, we can't take an earned vacation. We can't afford it. We can't have an evening out with the spouse or family. If we do, we know we are using money that should go to bills. We know it will cause us to get further behind. We can't even enjoy Christmas when we are up to our nostrils in debt. We know we are only adding to the problem. The Bible says the borrower is servant to the debt. Every dime needs to go to the master and we know what Jesus said about that.

Matthew 6:24 "No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.

Often our relationship with the Lord will suffer because we are serving money. It's difficult to be heavily in debt and serve God the way we want.

4. Debt Erodes giving opportunities. In every believer's heart is a desire to give. We know God will bless us if we give. We desperately want to give. That's part of the "born again" experience. I can remember back when Judy and I were first saved. I so wanted to give to special events and to help people, but I couldn't because of my debt. We wanted to give so badly that twice we borrowed money from the bank so we could give. If heavily in debt, we cannot give no matter how desperately we want.

5. Debt will unmask character flaws. Some debt happens because of an accident or calamity. Sometimes debt can't be avoided, but not most debt. Most debt is consumer debt. We experience debt because of the lack of contentment. We are looking to things to give us contentment. It won't happen. We need to learn to say, "Enough! I have enough." Another character flaw that comes out is patience. Often what we want is not bad. Cars are not bad. Clothes are not bad. Computers are not bad. It's that we don't have the patience to wait until we can purchase what we want without interest. The lack of patience is one of my flaws. I am not a patient person. The lack of discipline is another character flaw that many experience. We can't say, "No" to ourselves. We lack self-discipline. We would rather be slaves to credit cards than discipline ourselves to say, "No." We discipline our children, but we refuse to discipline ourselves.

6. Debt damages a Christian's witness. One of the best and fastest ways to turn someone off that is being drawn to God is for a Christian to not pay his or her bills. Lost people have questioned me concerning people in our church. They don't understand how they can call themselves a Christian, and say, "Praise Jesus, thank you God, Hallelujah," but not pay their bills. They see this as an attempt to cheat their debtors out of the money they said they would pay. They heard the Jesus stuff come out of their mouths, but they saw the lack of honesty. It's a terrible witness.

We have had people not pay us for thousands of dollars of school debt at the academy. I have had bounced tithe checks that were never covered. We all mess up with the check book from time to time, but let's make it good.

Another thing along this line is when a believer borrows from another believer and then will not pay it back as promised. This stuff damages our witness.

What if you are in interest debt and want to get out of it? What does it take? I want to give you four necessary requirements.

FOUR REQUIREMENTS TO BE DEBT FREE.

1. It will take a decision. Every significant event of our lives took a decision. Going to college took a decision. Taking a job required a decision. Getting married took a decision. Staying married takes a daily decision. Coming to Christ took a decision. Getting out of debt requires a "D" day, Decision Day. I pray that today is your "D Day."

2. It will require a plan of attack. You know what we need to do? We need to have a party. We can get together at someone's house. Take out our credit cards and put them in a cookie pan lined with tinfoil. Have the oven preheated to 400 degrees. Put that cookie pan filled with credit cards in the oven and while the cards are melting down, dance singing "Free at last, free at last." Attack what causes debt. If it's credit cards, then melt them. Attack it with a vengeance. Say, "I'm going to arillate this credit card or this bill. I will not control me. I refuse to allow it to be my master." Then do it. Each person needs their own plan.

3. It will require discipline and accountability. If we don't have someone to be accountable to we will get weak and slip back. I watch the weigh down people. As long as they are accountable, they keep the weight off. When they stop being accountable, they find the weight they lost. Alcoholics need a support group. Create a support group. Encourage one another and challenge one another. Let's get serious. This isn't something easy to do or something that needs to go on forever. Once you know you are free and can remain "clean" then stop doing it. Talking about your finances around people isn't the most fun thing to do. We all want others to think we have it all together. So, we put on a show. Is the show worth thousands and thousands of dollars? Are we trading our future financial posture for a show? Ask yourself that question.

4. It will require time. It took time to get in debt and it will take time to get out, but it doesn't need to be 42 years. Let me show you. Remember the $4000 on a credit card at 18% interest? It would take 42 years to pay it off paying the minimum. What if we made a decision (#1) to cut back on everything (#2 plan) and attacked that card? What if we paid 10% (#3 discipline) instead of 2%? Instead of paying $14,931.65, we would pay $4,705.88 ($705.88 interest). That is a savings of $10,225.77. Instead of it taking 42.3 years, it would take 5 years. If you could pay a minimum of 10% until the minimum became of $200 and then continue at $200, it would only take 19 months (1 year and 7 months).

With interest as an alley you can become wealthy. Let's look at a 30-30-30 plan. If a person can scrape out a dollar a day, that's a coke and a pack of crackers, they can become wealthy. Immediately that is $30.00 a month. Put that in an IRA making 10% a year average. That is beginning with $30. Add $30 a month. Do this for 30 years. You will have $68,974.89.

If you could do 60-60-30, you would have $137,949.76. Can you do $2.00 a day? That's all it takes. Who can scrape up $2.00 a day?

Let's push the envelope a little and plan today for a wealthy life. Let's go for $5.00 a day. $5.00 a day is a trip to Wendy's for lunch. Allow me to show you what a 150-150-30 plan would be. If I put back $5.00 a day, it would be $150.00 a month. If I did that every month for 30 years, I would have $344,874.41. My investment would have been $54,150. The interest would be $290,724.41. It's the interest that made it so great an amount. Instead of interest crushing me and destroying me, it made me wealthy.

Interest is our alley or our enemy. It is our friend or our foe. It will bless me or crush me. It is a power in my life one way or another. What is it doing to you? Let's pray.

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