Trust Services and SIMPLIFY
Financial Fuel Economy
July 30, 2018
The following was written by Donna Hasbach and Mike Sobieski, Technical Advisors located in Ronald Blue Trust’s branch office in Phoenix, Arizona.
How many miles per gallon (MPG) does your vehicle get?
If you drive a super fuel-efficient vehicle, you may get excellent gas mileage. On the other hand, if you drive a classic car or an oversized four-wheel drive sports utility vehicle, you may only get 10 miles to the gallon. Regardless of what vehicle you drive, car enthusiasts and experts alike will tell you that it's not the fuel itself that determines your gas mileage. Your vehicle’s fuel economy is also dependent on everything working properly and efficiently as a whole.
We believe that the same is true with financial planning and investments. Investments (or income) are just one part of your overall financial health. While they’re the “fuel” that is needed to run the overall “engine,” there are also many moving parts that all need to work well together. A financial plan, like a 100-point inspection, analyzes, diagnoses, and illuminates necessary corrections in order to maintain your financial engine so that it runs efficiently on the “fuel” you choose to use.
We’re certainly not minimizing the importance of investment selection and implementation. Just as you wouldn’t want to put diesel in a gasoline engine, there can definitely be a difference between good and bad fuel in an investment portfolio. However, the most diversified, perfectly allocated investment portfolio will never compensate for the lack of a long-term sustainable financial plan that ensures that your financial vehicle is adhering to the fundamental principles of money.
What are these fundamental principles? Let’s take a look at what the Bible has to say regarding money management:
Understand that God owns it all (Psalm 24:1)
The very definition of stewardship is the careful and responsible management of something entrusted to us, but not owned by us. As a company, we believe that every spending decision is a spiritual decision – every time we spend money, we are using God’s resources, not ours. More than just being “obedient” about money, we believe that the principle of God owning it all is a key fundamental to money management. Furthermore, being good stewards of the resources (time, talents, and treasure) with which we have been blessed is at the heart of living generously.
Set long-term written financial goals (Proverbs 16:9)
Financial planning is at the center of prioritizing your expenses, setting your goals, and meeting your future cash flow needs, while freeing up resources needed to expand His kingdom.
Spend less than you earn (Proverbs 13:11)
We believe that financial margin only comes when you spend less than you earn, which means controlling your cash flow. We recommend assessing your current spending habits and patterns to ensure that your actual spending aligns with your predetermined priorities, while building liquidity so that you will be prepared for emergencies.
Avoid the use of debt (Proverbs 22:7)
We believe in having a healthy fear of debt and that delayed gratification can help us keep priorities in order and our lives in balance.
In summary, getting good financial fuel economy is not just about your investments or income (fuel). It’s about your overall financial plan (or vehicle) being well maintained and kept in good working order. If you haven’t gotten a financial “tune-up” lately, we recommend that you contact your Ronald Blue Trust advisor, call 800.987.2987, or email
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Disclaimer: Ronald Blue Trust obtains historical and other information from a wide variety of publicly available sources. The information and material provided is for informational purposes only and is intended to be educational in nature. We have taken reasonable care and precaution to ensure that the information is fair and accurate, or has been compiled from sources believed to be reliable. Nevertheless, we do not make any representations or warranty, express or implied, as to the accuracy, completeness, or fitness for any purpose or use of the information. The information may not in all cases be current and it is subject to continuous
change. Accordingly, you should not rely on any of the information as authoritative or a substitute for the exercise of your own skill and judgment in making any investment or other decision. We recommend that individuals consult with a professional advisor familiar with their particular situation for advice concerning specific investments, accounting, tax, and legal matters or other matters before taking any action. We shall not be liable for any direct, indirect, or consequential loss arising from any use of or reliance on the information contained here. Certain sections of this commentary may contain forward-looking statements that are based on our reasonable expectations, estimate, projections and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Investing involves risk and the value of your investment will fluctuate over time and you may gain or lose money. Past performance of any security, sector or investment style is not necessarily indicative of future results.