Feb 2005
 

The Right Investment Strategy

In 2004 we focused on managing your cash flow. This year, we are going to take the next step by addressing maximizing the use of your margin or savings. Whether you have $10 or $1,000 left over at the end of each month, it is critical that you make wise decisions regarding how to allocate those funds. Investments are tools for accomplishing those important long-term objectives and should be invested in areas to help you reach them.

When considering where to invest, the big questions are:

  • Where can I get the desired return?
  • How much risk am I willing to take?
  • Will the funds be available when I need them?

“Am I getting the desired, or most, return” can be a tricky question because with most investments, the return is not guaranteed. Stocks unpredictably go up and down. One safe place to invest for a sure return is to pay off non-mortgage debt which is the FIRST STEP when determining what to do with excess funds.

Believe it or not, paying off debt can be your best investment. If you have a car loan with a 7% interest rate, you essentially get a 7% guaranteed, risk free rate of return on your funds. Considering that stocks historically returned 9-10% annually, and have risk, 7% is good. If you have non-mortgage debt, consider how much you can afford to prepay to get your specific guaranteed return. Check the interest rate on your credit cards, which typically carry rates as high as 18-21%.

Next month we will look at different angles regarding this FIRST STEP, such as prepaying a 0% interest or low interest loan as well as the key biblical principles addressing debt.

Planning Tips

Free Tax Filing - If you are still pushing pen and paper to complete your tax return it's time to surrender to a software or website. The complexity of the tax code makes it challenging for any individual to accurately prepare all but the simplest of returns. This link takes you to the IRS page listing all the free tax providers. See if you qualify to use one of these services.

When paying off debt is a bad idea. This article looks at four situations where paying off debt may not make sense.

Does God have a plan for your finances? While our hope is that our e-newsletter provides helpful information; it can never replace a financial plan - specifically one that integrates your financial situation and God's priorities for your life. If the information we provide only leads to more confusion or is just another to-do that is hard to fit into the big picture, then a financial plan within a Biblical framework may be your next best step. Click here to learn more...

In the News

Social Security Debate - here it comes again! Last April we discussed various issues surrounding Social Security. President Bush's recent State of the Union address left no doubt that this is a high priority for his second term administration. That address resulted in numerous questions about the logistics of how the changes will work, what it will cost, etc. Unfortunately, these questions are almost impossible to answer at this time. However, we can look at Galveston County, Texas as an example of Social Security privatization .This article provides an overview of this frequently referenced case study. Also, click here for a current update of the key issues.

Who We Are and How We Can Help You

The Everyday Steward division of Ronald Blue & Co. (RB&Co.) is a unique part of RB&Co. Our vision is to serve a wide range of Christian individuals and couples who have a desire to be better stewards of their God-given assets. Our group provides an affordable option for those desiring professional financial counsel, or to have their investment assets professionally managed. Learn more...

Disclaimer - Ronald Blue and Co. provides the names of  and  references other financial organizations, media sources and/or vendors of financial products as a convenience to its newsletter subscribers. Ronald Blue and Co. may not agree with, nor does it make any warranty as to the accuracy of the information supplied by these organizations or vendors. It is not intended to be a substitute for personalized legal or financial planning advice.  This newsletter may contain links to websites that are created and maintained by other organizations. All links were fully functional at the time of publication, however due to the changing nature of content on these third-party websites the content that is linked to may not be available indefinitely.

Furthermore, visitors should be aware that other sites linked from this newsletter may use persistent cookies that track visitor viewing habits.

© 2006, The Everyday Steward
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Resources

The Federal Government Recently enacted legislation mandating that consumers be given free access to their credit reports three times a year.  This program is being phased in slowly over the course of 2005.  Check their website to see when your state launches its program.

If you are not eligible now for the Federal program, your state might offer you one or more free reports a year.  Try an internet search to see if this is the case. (P.S. Be careful. Some sites offering free credit reports are bogus and are only interested in stealing your personal information.)

For Georgia residents, this article explains the new federal legislation as well as the Georgia state law that provides free credit reports to Georgians.