Built Upon a Rock: Financial Self-Reliance in Troubled Times

By Brian Horne

The financial world is changing rapidly, and biblical scriptures and prophets warn of more economic stormy weather ahead. In the guidebook Built Upon a Rock, Brian Horne, a Certified Financial Planner and accountant, relies on his professional experience and spiritual upbringing to provide methods for protecting assets, investing and saving money, and avoiding financial pitfalls.

Horne provides sound financial and biblical principles that will help you to understand the importance of achieving financial self-reliance
during the tumultuous Last Days; foretold in the scriptures. With an easy-to-follow style, Horne teaches all Christians, both financial novices and experienced investors how to:
Prepare Financially for the Last Days;
set up a budget and create a debt-elimination calendar;
save and invest your money using Biblical principles;
properly invest in real estate or home ownership;
invest your IRA and 401(k) wisely;
find the proper insurance coverage for Life, Home, Auto;
buy gold and silverwhy & when;
prevent identity theft ; and improve a credit score.
Built Upon a Rock shares practical advice coupled with spiritual insight that will help the reader distinguish between wants and needs and lead them to achieve peace of mind in uncertain times.

• Language: English
• Publisher: iUniverse
• Release date: Sep 30, 2010
• ISBN: 9781450246866

Brian Horne

Brian Horne studied business, finance, and accounting at three universities and has been in the financial planning industry since 1988. He also completed eight years of seminary, served a mission, and studied for five months in the Holy Land. Brian is happily married and has four children.

Book preview

Contents

Disclaimer

Introduction

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10

Conclusion

About the Author

Appendix

Resources

Disclaimer

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This publication was designed to provide accurate and authoritative information of a general and current nature only. This book is published under the express understanding that neither the writer nor the publisher is engaged in rendering legal, accounting, or other financial advice through this book. Therefore, any information included in this publication should be evaluated in the context of each individual’s particular and unique financial circumstances. The services of competent legal, financial, and accounting professionals should be sought before implementing any strategies outlined here.

It is also assumed that tax laws and economic dynamics change on a constant basis, and other uncontrollable factors may limit or even prohibit the use of certain investment options or financial planning strategies.

Since a basic financial education is desirable and helpful to begin self-reliance and empowerment toward financial independence, this book was developed as a helpful tool and basic building block upon which to develop additional personal money management, financial planning, and investing skills.

Introduction

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In my work as a financial planner and accountant, I talk to a great many people who are looking for direction on what to do with their money. They are nervous about the future and want some guidance. Many have lost money in the stock market, in real estate, or in an investment scam and don’t want to have that happen again. Some have lost a spouse and are now having to deal with money issues they haven’t had to worry about in the past.

Based upon my experience as a financial planner, as an accountant, and helping people with their money, I believe there are many people who are not financially prepared. The world is changing rapidly. The economy, the stock markets, and investing principles will not be the same going forward. This book is for people looking for practical financial guidance as to what they need to do to get their financial house in order and which areas to concentrate on first. It also points out some financial pitfalls and how to avoid them.

What I Have Learned

Over the years, I have noticed that many people lose money for a variety of reasons: theft, fraud, dishonesty, market fluctuations, bad timing, terrorist attacks, and more. My feeling is that we need to protect our assets. Many people I talk to want to get ahead, beat the markets, and take advantage of what appear to be good opportunities to make money and make it quickly. This is dangerous and can lead to big losses and financial ruin.

I’ve found that many people make quick and hasty investment decisions. For example, I’ve noticed that some investors put their money in one investment expecting immediate results. If the investment doesn’t make money as quickly as expected, they lose interest and want to move on to the next hot investment idea. They often take a loss on the first investment to make the switch to the new and improved opportunity. I feel this isn’t investing—it is just gambling. Making an investment with the hope it will make money fast and then getting out with a loss because it didn’t perform as hoped or jumping into an investment because you receive a hot tip and then jumping out of that into the next hot tip is just speculation. One wrong guess and you can lose the entire investment. A series of several bad moves can wipe out 50 percent of your money in a hurry. I do not feel this is wise.

I’ve seen people put their money into an investment hoping that it would steadily grow but found that the investment fluctuated. Often the price began to decline. Every day they had to decide Do I sell this thing or do I hold on and hope it goes back up? The next day they had to make the decision all over again. Day after day, they had the stress of making a hold-or-sell decision. A declining investment that slowly eats away one’s principal can be most agonizing. Finally, when they couldn’t stand it any longer, they sold at a loss to preserve what was left.

I’ve seen others put all their money in investments that were not liquid or accessible, such as real estate, family partnerships, a loan to family members, a great business idea, or a new start-up business. When they needed money, they couldn’t get at it, and this created a whole new area of stress and frustration.

Investing can be hard and nerve-wracking even in relatively good economic times. Biblical prophets have told us the world will be in commotion in the Last Days, which is now. I feel it is imperative that we invest properly, focusing on financial self-reliance and making sure our financial foundation is built upon a rock. I feel we need to make wise investment decisions that will free up much of our time from having to worry about our money every day, keep our money safe so we won’t lose it, and protect it from many of the problems that lie ahead in the not-too-distant future. This book is designed to help you understand the economic risks of the future and how to be better prepared for the prophesied problems that lie ahead.

The Goal

What is financial self-reliance? The definition that I have adopted is this: Financial self-reliance is the ability to take care of oneself financially while preparing for life’s challenges and problems. It is being a good steward over the financial resources in one’s control.

Following the principles in this book will not bring freedom from problems and challenges. You may still lose your job, you could still lose a loved one in a terrorist attack, and your house could still be destroyed by a tornado, hurricane, or earthquake. However, if you have properly prepared, saved, and paid down debt, you can deal with these tests more effectively. If you lose your job, for example, it is easier to deal with that challenge if you have properly prepared by paying down your debts and having your money liquid so you can use it. If an earthquake destroys your home, it is easier to work through that problem if you are properly insured, your house paid for, and you have some emergency funds available.

Proper insurance can help replace homes and assets. Life insurance can help the loved ones left behind even if the breadwinner perished in a plane crash. Having proper food storage can reduce suffering during a famine or catastrophe.

Being financially self-reliant does not mean that we seek riches just to have more than the next guy. Money is important, and we need it to function in the world. We need to have food, clothes, and a place to live. But merely having a lot of assets does not necessarily mean we are prepared or self-reliant.

My premise is that we are in the Last Days as spoken of by John the Revelator, the apostle Paul, and others in the Bible. I’ll be referring to text in the King James Version of the Holy Bible as a reference. I am a lifelong Christian, having been baptized in my youth. I attended seminary for four years during high school, then institute for six years while in college, and I completed an eighteen-month mission for my church serving in Los Angeles, California, and Maracaibo, Venezuela. I will be using thoughts and ideas that are based on the Bible and the words of the prophets.

We are told that the Last Days is the time period preceding the second coming of the Lord Jesus Christ. I want to portray what we will face as individuals, as a nation, and as the world in the coming years as foretold by the prophets. I also want to give some practical guidance on how we should save and invest our money, where to save or invest, and what to do to protect our assets in preparation for these foretold economic difficulties that are sure to come.

If you are not a Christian, don’t worry. This book is still for you. The financial principles in this book are sound, and the information contained herein applies to everyone. I use the scriptures so the reader has a better understanding of why I feel we need to get our financial houses in order as soon as possible. I believe the prophesies in the scriptures are true and will shortly come to pass. The quotes from the Bible and the prophets help give the reader additional understanding of why we need to prepare now, how we need to prepare, and what to prepare for.

Many people are looking for some practical guidance and direction with their money as investing and money management become more difficult and risky. The financial world is increasingly volatile and dangerous. My agenda is not to make money selling books but rather to help people. My hope is that this book will give some people a map that will ultimately help ease their worries about money and provide a more sound financial foundation. I want people to protect their money, grow their assets, have access to their funds, and be prepared for the turbulent economic times that lie ahead.

This book uses scriptural references and quotes from prophets to support my reasoning as to what we should invest in, how to manage our money, and what we need to do to be financially prepared during these Last Days. If we believe the prophets saw the future, and I do, then we can say we know these things will shortly come to pass. If we know what to expect in the future, we can take action to be better prepared for it. If we are prepared, we have less reason to worry or fear.

Some years ago I had a friend who was not happy with the gyrations of the stock market. Barbara, a single woman in her late sixties, wanted an investment that was stable and paid monthly dividends. This was a good idea, but interest rates at the time were quite low, and most fixed investments, such as bank CDs, were paying in the 1 percent range. Fixed annuities (see chapter 5 for an explanation of annuities) were paying around 3 percent per year. Barbara was given the option to invest in a private placement note that was paying 10 percent per year. A private placement is an investment in a privately held company (not a publicly held company like WalMart or IBM), often in a non-liquid promissory note. The company promised her a 10 percent return, monthly payments, principal that would not fluctuate, and her money backed by real estate. The company had been around for about twenty years and prided itself on never having missed a monthly dividend payment.

For four years, this woman was very happy to receive a 10 percent dividend payment on her investment. This company, which was involved in real estate development, later ran into trouble and stopped making payments. She waited for a year and a half for dividends to start again or to get her principal back. Every day was stressful due to the loss of the dividends. Every day she worried about her money. Day after day, month after month, she called and wrote letters trying to get her money back. She never received another penny as the company and its owner went bankrupt. Barbara, along with the other investors with this firm, lost their entire remaining principal. The four years of peace and security she felt while receiving the 10 percent interest were quickly swallowed up and forgotten in the loss of her principal.

Financial risks and dangers are everywhere, more so now than at any other time in the past. The economy is unstable, people are dishonest, natural disasters and wars are on the rise. The worrying when investment problems first start, and the anger as things get worse, may be avoided. The time and energy, the attorneys, the phone calls, and the letters can all be minimized or eliminated if we use wise investing principles to begin with and avoid the investments that are more likely to give us grief and heartburn. Economic times are getting worse, not better. This book will help you avoid some of the risks that would result in your being the next victim or financial casualty.

When I speak of investments, I am generally referring to any area or product one can put money into rather than spending it. A bank account is an investment as is the stock market. Real estate is an investment as are collectible art and gold coins.

I believe the investing landscape has changed rapidly since 2006. I feel we will not be able to invest in the same way going forward as was the norm over the last seventy years. Therefore, this book will help you become aware of the financial risks and hazards that do and will exist, as prophesied, and can help you be better prepared for the troubles that lie ahead. This is not a doomsday book—although many prophesies of the Last Days do paint a distressing picture of wars, plagues, violence, natural disasters, and the like. I will be using these prophesies as a backdrop of what we need to prepare for and how we need to prepare. I do want you to feel some insecurity and urgency so that you will act now. Therefore, I am writing this book to help you prepare for what we know the future holds, not necessarily to make you afraid of the future. We cannot alter the future as seen by the prophets, but we can prepare for it.

I personally am not excited about living with wars, famines, and plagues. But I’d rather be as financially prepared as possible so I can face the difficulties rather than be unprepared and more easily washed away in the economic floods. If the Titanic had had enough lifeboats to save everyone aboard the ship, it wouldn’t have been such a great disaster. Yes, the passengers and crew would have lost some possessions, been cold and wet, and had a harrowing experience. But the loss of the ship would largely be forgotten by now. Movies and books are still being made about the unsinkable ship because the vessel was not prepared for an accident and the loss of all those lives, which could have been averted. That made for a great tragedy. So let’s take a look at what these next years will bring and then how we can prepare our economic lifeboats by saving and investing properly, by building our financial house upon a rock!

Introduction Highlights

• Investing your savings can be hard.

• It’s time to make better investing choices.

• These are the Last Days as spoken of in the scriptures.

• Investing is more precarious than ever.

• We cannot invest now as we have the past seventy years; the rules have changed. Investing in real estate, stocks, bonds, and mutual funds will more likely lead to losses.

• Investing going forward needs to be in food storage, emergency funds, safe and guaranteed accounts, cash on hand, education, and home-ownership.

Chapter 1

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The Last Days: Plagues, Disasters, and Theft

Location, Location, Location

Have you ever heard a realtor discuss the three most important factors in owning property? They are (1) location, (2) location, and (3) location. Wherever you build your financial house, it will be in a very uncertain and dangerous place. Our location is the Last Days. There may be financial whirlwinds, earthquakes, typhoons, famines, or floods. Knowing that the location of your financial homestead is in the Last Days will help you build a house that can withstand the financial tempests that will come.

Many revelations in the scriptures summarize the signs and world conditions of the Last Days. There will be wars, perils, and commotions preceding our Lord’s return. The scriptures tell of plagues, pestilence, famine, and disease such as the world has never before seen. Prophesies speak of scourges, tribulation, calamities, and disasters without parallel—of strife, wars, blood, carnage, and desolation that overshadow past world problems. The elements will be in commotion, with resultant floods, storms, fires, whirlwinds, and earthquakes as bad, or worse, than any in the world’s history. There will be evil, iniquity, wickedness, turmoil, murder, crime, and conspiring men who will be as bad as or exceed the violence in the days of Noah and the sexual perversions of Sodom and Gomorrah.

Chapters 5 and 6 of the Book of Revelation use the symbol of a book sealed with seven seals (Rev. 5:1). John the Revelator, the author of the Book of Revelation, wrote of these seven seals. He refers to the seals as if they were curtains throughout a play. A seal refers to a section of a book that is bound, closed, or sealed shut. The seals are time periods or events that will take place upon this earth. Many of those events take place in the Last Days. Each seal of the book or scroll is opened by the Lord and read by John. As the Revelator reads this book, he sees great calamities that will befall the people of the earth in the Last Days prior to Jesus’s second coming. There will be many difficulties that will affect all nations and all people. For the Lord "maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust (Authorized [King James] Version, Matt. 5:45).

Even if we are prepared, we will have to live through the plagues along with the unprepared. The difference for those who know and understand the future, because it was seen by prophets of the past and written about in the scriptures, is that they can be prepared and not suffer in the same way as the unprepared. If we are prepared for famines, for example, we do not starve like the unprepared. We may not have fresh fruit and vegetables daily, but we will have food and not go hungry.

Modern-Day Warnings

I could probably write a whole book on what the prophets and apostles have written about the Last Days and then relate it to investing. I’ll forego that and just make a few key points in this section.

President Gordon B. Hinckley

The Church of Jesus Christ of Latter-day Saints is organized with fifteen individuals: three people in the First Presidency; the president and prophet of the church and his two counselors; and the Quorum of the Twelve Apostles. The senior apostle is the president of that quorum. The First Presidency and twelve apostles are sustained as prophets, seers, and revelators by the members of the church.

In October 1998, the prophet Gordon B. Hinckley, president of The Church of Jesus Christ of Latter-day Saints, gave an address that began, I am suggesting that the time has come to get our houses in order. He went on to say, I wish to speak to you about temporal matters. As a backdrop for what I wish to say, I read to you a few verses from the forty-first chapter of Genesis. Pharaoh, the ruler of Egypt, dreamed dreams which greatly troubled him. President Hinckley went on to quote from Pharaoh’s dream of years of plenty and years of famine.

He continued:

I am suggesting that the time has come to get our houses in order. So many of our people are living on the very edge of their incomes. In fact, some are living on borrowings. We have witnessed in recent weeks wide and fearsome swings in the markets of the world. The economy is a fragile thing. A stumble in the economy in Jakarta or Moscow can immediately affect the entire world. It can eventually reach down to each of us as individuals. There is a portent of stormy weather ahead to which we had better give heed (emphasis added). I hope with all my heart that we shall never slip into a depression (Hinckley 1998, 51).

I am not sure exactly what President Hinckley saw or felt. Perhaps he just had a strong impression that there would be economic problems. His reference to Pharaoh’s dream suggests he felt there would be a time when things would be somewhat prosperous in the economies of the world. This would be followed by a change in the economy—a period of economic problems that he hoped would not become a depression.

Clearly, we can understand from this talk that President Hinckley foresaw economic problems, and his counsel was, "This is a part of the temporal gospel in which we believe. May the Lord bless you, my beloved brethren, to set your houses in order. If you have paid your debts, if you have a reserve, even though it be small, then should storms howl about your head, you will have shelter for your wives and children and peace in your hearts. That’s all I have to say about it, but I wish to say it with all the emphasis of which I am capable" (Hinckley 1998, 51). (emphasis added)

What more can a prophet do than to warn the people? If he adds that he is doing so with all the emphasis of which (he is) capable, then that is as strong as he can be.

We are going to have economic problems. No matter where we live, our financial house will have to be built to withstand the coming storms. It’s been some time since President Hinckley said he hoped we wouldn’t have another depression. I personally believe a depression is possible and perhaps likely. It may take a while for a depression to develop, and I hope it does. I personally do not feel prepared for a depression. I’ll discuss this later in the book. But as we do not know the time frame associated with the prophesied problems, we cannot afford to wait. Our time to prepare is many years shorter than it was in 1998 at the time of President Hinckley’s address. My hope is that there will be enough time left for us to finish our preparations. We have to get our finances in order, and we need to start now.

Boyd K. Packer

In April 2009, Boyd K. Packer, the president of the Quorum of the Twelve Apostles of the Church of Jesus Christ of Latter-day Saints, stated, A life of fun and games and expensive toys has come to an abrupt end. We move from a generation of ease and entertainment to a generation of hard work and responsibility. We do not know how long that will last (Packer 2009, 52).

I assume his reference to the generation of ease, fun, games, and expensive toys that has come to an end relates to the generation of about the last thirty years or so, ending in 2008. Going forward there will be tougher economic times that will last a while. President Packer said it will be a generation, but he didn’t know how long it would last. I’m not sure what the length of a generation is, but twenty to thirty years is what comes to my mind.

President Packer reminded us that we, as a people, will not be able to get things as easily as we did in the past. He put it this way: It will not hurt you to want something and not have it. There is a maturing and disciplining that will be good for you. He went on to say, Some of you live in countries where most of what you eat and some of what you wear will depend on what can be produced by the family. It may be that what you can contribute will make the difference so that the rent is paid or the family is fed and housed. Be a responsible member of your family. Take care of your possessions—your clothing, your property. Do not be wasteful. Learn to be content (Packer 2009, 52).

We need to be aware of the future so we can be prepared. We are reminded, however, that we are not to fear but to have faith. Packer’s counsel was, It may seem that the world is in commotion; and it is! It may seem that there are wars and rumors of wars; and there are! It may seem that the future will hold trials and difficulties for you; and it will! However, fear is the opposite of faith. Do not be afraid! I do not fear (Packer 2009, 51) How can we face the future without fear? By being prepared, of course.

A House upon a Rock

It is obvious to me that Gordon B. Hinckley, a prophet of God, knew there would be economic trouble in the future. In the passage just quoted, he used the word portent and said we had better give heed. The American Heritage Dictionary defines portent as an indication of something important or calamitous about to occur; an omen, prophetic or threatening significance. I do not believe that President Hinckley used that word by accident. I also feel, therefore, that we need to get our financial house in order as soon as possible.

The Bible tells the story, or parable, about a wise man and a foolish man. The foolish man built his house upon the sand, and the wise man built his house upon a rock. When the storms came and beat upon the houses, the house on the sand was washed away while the one on the rock stood firm (Matt. 7:24–27).

This is an excellent example for us as Last Days investors. There may be times of peace when things seem to be going well. When the seas are calm, building a house on the beach is very appealing. The breeze, the view, and the boating are all fun. In addition, the values of the home and land appear to have a good chance of appreciating. In like manner, it is more exciting to be buying, selling, and trading stocks, trying to make gains in real estate or other investments that seem glamorous during times of relative peace and prosperity.

These kinds of unstable investments are like the sand: when the economic storms come—and they are coming—your money that is invested in these unstable and illiquid investments can get washed away. No matter how fun or exciting it seemed at the time, and no matter