07 July 2010
We are going to be starting a new topic in our “The Big Picture” section of The Entrusted Steward newsletter.
This new topic that we will be studying is based upon verse Proverbs 13:7, which says, “There is one who pretends to be rich, but has nothing; Another pretends to be poor, but has great wealth.” First of all, let’s just look at this verse and understand that it is a Proverb, which means it is a general truth. There are some Proverbs that there are exceptions to and we are going to talk about those as well. However, for the most part this verse is stating a truth and the word wealth in this verse is talking about money. It is talking about net worth, the same way that the secular world refers to wealth. It is not a coded word for the number of children one has nor a mystery that God put in there that means the number of crowns or rewards that you will receive in heaven. It means money and financially wealthy. It’s not saying that either one (poor or rich) are good or bad. It is just simply stating a general truth about the way humans operate.
What we are going to be doing as we look at this verse is quoting lots of good information from the new book by Author Thomas J. Stanley, PhD. called, “Stop Acting Rich and Start Living Like a Real Millionaire.” And of course he is author of two best sellers, “The Millionaire Next Door” and “The Millionaire Mind” and has sold more than 300 copies.
Dr. Stanley holds a special place in my heart because he lives here in Georgia and actually was one of my Dad’s very favorite professors at the University of Georgia. Dr. Stanley in his book, The Millionaire Next Door, in one of his hypothetical examples, uses my Dad and his business that he started to illustrate the concept of “The Millionaire Next Door.” So obviously I am fond of Dr. Stanley because he was an encouragement to my Dad when he was a college student.
So as we move forward here, we are going to start with the first chapter of the book and the name of the chapter is, “The Difference Between Being Rich and Acting Rich.”
So Dr. Stanley kind of opens up and he says on page 6 that, “People are saving like they haven’t saved in decades.” He says, “It is hip to be frugal.” Then on page 8 we read, “Most people live well today, but they will pay for it tomorrow when their standard of living falls off the proverbial cliff due to a lack of resources to pay for retirement, healthcare, and even the cost of a trip to visit the grandkids.” And as we get into this book and we get into this series, we are talking about millionaires. What we are going to do first of all is define the term millionaire. Dr. Stanley is defining the term millionaire as someone who has investments of $1 million or more. In his book he defines investments as “such items as stock, bonds, mutual funds, equity shares in private businesses, annuities, net cash value of life insurance, mortgages and credit notes held, gold and other precious metals, certificates of deposit, T bills, savings bonds, money market funds, checking accounts, cash, and income-producing real estate. Basically, anything of value that is reasonably liquid.” So that gives us the definition of what we will be referring to as a millionaire according to Dr. Stanley’s definition. Notice that nowhere in this definition of investments did he include your primary residence and that is a key concept that he will talk about throughout the book.
As we move through the first chapter, he gives us another bit of wisdom that is also very biblical and it says, “It usually takes a certain degree of discipline, pro-active planning, prioritizing and investing to become a true millionaire.” He goes on to say on page 9, “In the case of housing, the majority of people who live in expensive homes (valued at $1 million or more) are not millionaires: they are (or were) house rich.” So here is one of the crux of what he is talking about, is people are acting rich but they are not. They live in these million dollar homes and they are not rich.
I had a meeting with the President of a competitive basketball organization here in North Atlanta and he told me that he had parents and coaches that were bouncing checks to his organization that lived in million-dollar homes and he couldn’t believe it. And I looked at him and I said, “Oh, I can definitely believe it.” We will continue reviewing how Proverbs 13:7 is being played out in front of our very own eyes, right here in America, next month in The Big Picture.