Phases

October 23, 2017 by Michael Gauthier ·

Is Having Debt Really a Sin?

“For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.” ‭1 Timothy‬ ‭6:10‬ ‭NIV‬‬

Is money inherently evil? No, money is a tool. The Bible specifically says that the “love” of money is evil. If we put money above God in any way, our relationship with money is unhealthy. We know that money can be used for great causes and can be a blessing in many ways. Given to a family in need, money might be the reason that family successfully makes it through a hard time or tough season in their lives. Likewise, money can be used for gambling or other addictions. It can become an idol and so sought after that is drives us to put money and our jobs above not only our families, ourselves but even God.

Well how about debt? Is debt evil? We are all familiar with Proverbs 22:7 that states, “The rich rule over the poor, and the borrower is slave to the lender.” Is this saying that debt is bad? It can be, however I have not seen a verse in the Bible that states that as a Christian, you should not use or have debt. In fact, the Bible never states that you should not use debt. It does state however many times, that you should use extreme caution when doing so. Just like money can be used as a tool for good reasons and for bad, debt is the same way.

First, It is important to understand the types of debts. There is oppressive debt or destructive debt which shows up as many types of consumer loans. These are typically credit cards, vehicle loans and student loans. Most of these types of loans have crushingly high interest rates. Even though some car loans or student loans might have lower interest rates, because of easy access, they typically encourage you to borrow much more than you should and thus the reason to include them in this category.

There is another type of debt however that we rarely discuss from a biblical perspective. This is the same debt that churches use to build new buildings and campuses and that companies use in order to grow their respective businesses. It is used often by real estate investors when they acquire a new rental property. It has been referred to as the “good” debt, wealth creation debt or constructive debt. This debt, typically is at a lower interest rate and is intentionally invested into something that can gain in value greater than the interest rate being charged. For example, borrowing money at 4% and investing into something that can make 7% or borrowing money from a bank in order to buy a rental property where the income from the property more than pays for the mortgage payment. By doing this, the borrower is able to increase in wealth.

So is “good” debt bad? I believe that depends on how it is being used and what our relationship with money really is. Matthew 6:24 says, ““No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” So what is your relationship money? Whether rich or poor, If you are so in debt that it consumes you, I believe this is wrong. I also believe that if you are so in love with the idea of being wealthy or wealthier and you are pursuing riches of this world, that is wrong as well. Even “good” debt can be used incorrectly with negative consequences and must be managed very diligently.

As Christians, we need to be storing up treasures in heaven and we should not be so consumed about our “wealth” in this world. If we are right with God and our relationship with money being used as a tool for good and to further His Kingdom, then I do think it is okay to use “good/constructive” debt for gaining additional wealth.

Personally I have paid off all consumer and oppressive debt but regularly use “good” debt to build wealth through real estate investments and for my business. This has allowed me to increase my personal net worth and income, which in turn, increases my tithe and giving, allowing me to be a blessing to even more people.

The truth is, there are many christians right now that are so focused on paying off their debts (both bad and good debt) that they are losing productive years and will not have enough money to retire. Instead they will either have to accept a much lower lifestyle in retirement or they will run out of money.

Many people that find themselves in this situation are often forced into making the decision of selling their house and downsizing or taking out a reverse mortgage (more debt) in order to get by in retirement. When people find themselves in this situation, obviously the amount of their giving and their ability to be a blessing to others is greatly diminished.

So, is having debt a sin? I am a christian and a Certified Financial Planner™, but I am not a biblical scholar. From what I can tell however, is that having debt is not considered a sin. It is something to be weighed heavily in your heart and your overall financial plan. As I teach in Phase I, the Foundation Phase, I believe that you need to payoff all consumer and oppressive debt before you move on to Phase II and start really Accumulating Wealth. Once in Phase II, I believe that you should look at your individual situation, determine the health of your relationship with money and work with your advisors and determine if utilizing “good” debt might benefit you, so that you might have the ability to be in even bigger blessing and benefit others.

What do you think, is all debt bad? Is debt a sin? Leave a comment below.

November 3, 2015 by Michael Gauthier ·

Should You Give Your Advisor Authority to Trade on Your Behalf?

When the market is changing under your feet, does your financial advisor have the authority to act on your behalf for the betterment of your investments?

They may or may not. That’s why you should ask them.

Some financial advisors don’t have the ability to buy and sell your stocks/investments on your behalf without your prior authorization. If you trust your financial advisor, wouldn’t you want them to have this ability?

This ability is what’s called “discretionary investment management.” This is one type of investment management that allows investment managers to buy and sell investments at their own discretion without prior approval from their clients.

Aligning Goals

Both the investor and the financial advisor have an interest in making money. Many financial advisors charge a fee for their services based on a percentage of assets under management. Therefore, it is in the best interest of the investor to seek a financial advisor who both charges a percentage of assets under management and provides discretionary investment management – when a client’s portfolio goes up in value, so does the investment advisor’s paycheck. Discretionary investment management has the potential to increase earnings for both the client and their financial advisor.

This alignment of goals benefits the client as the financial advisor has a real incentive to increase the client’s portfolio value.

Efficient Service

Non-discretionary investment managers unfortunately have their hands tied behind their backs when they see an opportunity for their clients because they must first gain their approval. Sometimes this takes a great deal of time, as clients are not always readily available to authorize their financial advisor’s recommendations.

Discretionary investment managers are able to take action on their recommendations immediately. This gives clients of discretionary investment managers a huge advantage as their financial advisors can take timely action in the midst of changing market conditions. This level of efficiency may make a real difference in a portfolio’s performance over time.

Strategic Portfolios

At my firm, Strategic Income Group, we undertake discretionary investment management on behalf of our clients. The ability to make decisions for our clients without calling them ensures we can provide our clients with the prompt service they deserve.

For example, when emerging markets are dropping like a rock, we can do something about it immediately to ensure our clients aren’t subject to further loss.

We practice discretionary investment management through the use of our Strategic Portfolios. These portfolios are tailored to specific types of clients and their investing goals. When our team feels strongly that a change needs to be made to one, several, or all of our Strategic Portfolios, we’re able to execute trades right away so that the clients who are invested in our Strategic Portfolios are positively impacted.

Fiduciary Responsibility

Financial advisors like those of us at Strategic Income Group have a fiduciary responsibility to do what is in the best interest of their clients. This responsibility is mandated by various credentials and also through government regulation.

However, some financial advisors – although they have a fiduciary responsibility to their clients – aren’t able to immediately do what’s in the best interest of their clients because they are non-discretionary investment managers.

That’s why it’s so critically important to figure out which type of financial advisor you have and ensure that your financial advisor has the power to make trades on your behalf in your best interest without your prior authorization.

Take a few moments to call your financial advisor to learn more. If they can’t make changes without your authorization, you might want to consider giving this ability to your current advisor. Be sure to also ask them if they are acting in fiduciary capacity so that your interest are placed first!

October 12, 2015 by Michael Gauthier ·

How to Keep Calm During a Stock Market Drop

Imagine yourself at the apex of a rollercoaster. You can see almost everything from here. Life is grand.

Sure, you know the coaster is about to drop down an unspeakable plunge at some point, but for now, you’re on top of the world.

Then it happens. You suddenly free-fall down and for a moment have the irrational thought that the coaster might come off the tracks. You get scared and start thinking things like:

I know this is a rollercoaster, but is it really supposed to be this scary?
What if this thing fails? After all, I know people who have lost their lives on these things!
I can’t see the end of the tracks – there’s a foggy tunnel ahead. When will it go back up?

You want off. But this coaster is one you’ll have to ride out – you’re locked into place. Besides, if you bail now, you’d probably die.

The stock market is similar rollercoasters. It goes up and down and you might literally or figuratively lose your lunch from time to time. But there’s a key difference with the stock market: you can get off the ride whenever you want to, and that’s not necessarily the best thing for your money.

The Recent Stock Market Drop

The S&P 500 Index, a frequently used market benchmark, dropped 11.17% from August 17th, 2015 to August 25th, 2015. Ouch. That’s scary.

But there’s good news: it recovered over half of its value since August 25th, 2015. The rollercoaster is going back up. Granted, more recovery is still needed, but things are looking up.

What does this teach us? Imagine being scared out of your mind on August 25th, 2015 and thinking that the stock market was going to go lower. So, you decide to sell your investments. Then the market starts to go back up. You get excited, and eventually decide to buy again. See what happened? You sold low and bought high: a bad idea!

How to Keep Calm During a Stock Market Drop

Financial advisors like myself have to reassure people that the stock market has followed this up-and-down pattern for the life of the market. It’s a rollercoaster, so you should expect some dips and drops.

The best way to keep calm during a stock market drop is to understand the history of the stock market. Knowing that these drops will occur, reason can kick in and give you the wisdom to hold onto your funds – not sell them at a low point.

Money tugs on one’s emotions, so it’s understandable to have some “freakout moments” when the market looks grim. As long as the investor doesn’t act on those emotions, their investments are likely to be just fine in the long run.

It is the duty of a financial advisor to proactively reach out to their clients to calm their nerves when their investments plummet in value. And that is exactly what we did at Strategic Income Group when our clients experienced this most recent drop. Our clients deserve to be reassured – and our assurance is based on experience.

Many people call us and say “sell everything.” We honor their requests, but we also tell them what we think because it’s our fiduciary responsibility. If a client’s portfolio is designed for retirement, and a client is several decades away from that, should they really be worried about the daily movements of the market? Of course not.

That’s why we help our clients create what we call a “Family Investment Policy Statement” in Phase II: The Accumulating Wealth Phase of the Three Phases of Wealth. This statement allows our clients to confirm their goals for their accounts including their time horizon. This gives our clients something to look at when thinking about their accounts and encourages them to press on should they experience a market drop well before the time they intend to use the money.

Bottom line? Have a protocol in place before drops happen, remember that corrections happen, and think long-term.

August 15, 2014 by Michael Gauthier ·

GAP: An Easy-To-Follow Money Management Strategy

Money affects many areas of our lives including our relationships, our health, and our future.

We all know that money is important, but the troubling fact is that sometimes money management can get complicated.

In the face of this complexity, it can be tempting to wing it and rely on our impulses – which many times can destroy our financial health and spread destruction to many other aspects of our lives.

Thankfully, there’s a simple strategy to bridge the gap between where we are now and where we want to be – a money management strategy that’s easy to remember and fun to use!

June 2, 2014 by Kevin Mercadante ·

Why You Should Pay Off Debt Before Investing in Stocks

In another approach to Phase I: The Foundation Phase, Step 4, Pay Off All Consumer Debt, we’re going to emphasize the need to pay off debt before investing in stocks. While that may seem like something of a repetition of our general advice to get out of debt, it actually rates a special discussion when it comes to investing in stocks.

There’s a myth – or perhaps an excellent example of wishful thinking – that it’s possible to invest your way out of debt. That’s a process of investing and growing your money until it reaches the point where it’s greater than your debt obligations. If only that were possible. More often than not, human emotion gets in the way, and the strategy turns into a recipe for failure.
Continue Reading…

May 5, 2014 by Michael Gauthier ·

How Power Dollars Can Improve Your Financial Plan

I was asked the other day during a presentation, “How long will it take someone to be able to build their Foundation Phase?” Of course the short answer is, “It depends.” The longer – and more accurate – answer is, “It depends on how many power dollars you have.”

But what are power dollars? I define power dollars as the dollars coming in from your income stream that have no other purpose than to go to your financial plan and work for you. First, you have to understand that your largest, controllable financial asset is your income stream. What you do with this will determine your financial success in life.
Continue Reading…

April 9, 2014 by Jasmine Trickel ·

How to Purchase a Home Without the Mistakes

You’ve made a strong offer with your Realtor® it’s been accepted. Congratulations!

But don’t get excited just yet. Oftentimes, buyers make mistakes that can jeopardize the sale.

Here are some tips to help you avoid mistakes and purchase with confidence:
Continue Reading…

April 3, 2014 by Michael Gauthier ·

Should You Really Tithe During Hardships?

Perhaps you’re living paycheck to paycheck.

Bank accounts? Depleted.

Stress level? Through the roof.

I’ve talked with many families going through difficult times – unbelievable hardships that sap their energy and wallets. Occasionally I’m asked if I think they should tithe when their budget is upside down. The short answer is yes, but hang in there and allow me to explain why.
Continue Reading…

March 17, 2014 by Jasmine Trickel ·

The Benefits of Homeownership vs. Renting

Trying to figure out if you should rent or own your next home? We have answers.

It’s important to look at some of the history of the real estate market and consider your options.

Market History

If you look at home values over the last 60 years you’ll see cyclical ups and downs in the real estate market. We all painfully remember in 2006 when the market slid down. The industry not only crashed it decimated much of the housing market throughout the United States.
Continue Reading…

March 13, 2014 by Jasmine Trickel ·

What You Should Know When Shopping for a Realtor®

For many people, buying and selling a home is the single largest financial decision they will make.

You know that homeownership can, over time, give you greater financial stability.

But where do you begin when you’ve decided you are ready to buy or sell? It all begins with finding a knowledgeable Realtor®. Read on for the important characteristics your next Realtor® should have.
Continue Reading…

March 3, 2014 by Kevin Mercadante ·

Why You Should Have an IRA Even if You’re in an Employer Plan

Have you ever heard – or used – the phrase, “I’m covered at work?” It comes in handy for putting off meetings with your Certified Financial Planner™. But if you’re serious about Phase II: The Accumulating Wealth Phase, you probably know already that you should never take cover under clichés. And so it is with retirement. You should have an IRA even if you’re in an employer plan.

If that sounds like overkill, consider the following . . . .
Continue Reading…

February 24, 2014 by Kevin Mercadante ·

5 Reasons Why Debt is Not Your Friend

In Phase I: The Foundation Phase, Step 4, Pay Off All Consumer Debt, we explore the various ways to pay off debt and just as important, why you need to. One of the most compelling reasons to get out of debt is simply that debt is not your friend.

That may sound like a vague generality, or even a point that’s beyond obvious. But given the fact that it has become a cultural norm in America to walk peacefully with debt, this is a topic that deserves far more consideration than it normally gets.

If you can fully embrace the reasons why debt is so toxic, you might be able to accelerate your efforts to pay it off . . . .
Continue Reading…

February 21, 2014 by Kevin Mercadante ·

How to Use a Side Business to Fund Your Retirement or Pay Off Debt

While trying to move into Phase 2: The Accumulating Wealth Phase, you may find it difficult to accumulate wealth with your current income alone. If this is the case, you may find that using a side business to fund your retirement – or even to pay off debt – improves your chances of success in reaching your goals.

A side business offers you an opportunity not only to increase your income, but also to create other options in your life. And in order to accumulate wealth, options are something you will most definitely need.
Continue Reading…

February 12, 2014 by Kevin Mercadante ·

6 Ways to Break the Cycle of Debt in Your Life

In Phase I: The Foundation Phase, Step 4, we recommend that you work to Pay Off All Consumer Debt. That is a critical step in building the foundation of your financial plan.

But exactly how do you go about that if debt seems to have gotten the upper hand on you? Unlike the old Nike commercials, you can’t Just Do It when it comes to debt. Debt is usually caused by getting caught in a cycle of debt, and before you can eliminate it, you first need to break that cycle.

Here’s a blueprint to make that happen.
Continue Reading…

January 18, 2014 by Kevin Mercadante ·

How to Build Your Basic Grubstake

Financial advisers and bloggers talk about the importance of having an emergency fund and investing money. But what if you have no money? That’s actually the situation with many millions of households across America. In fact, a study conducted in 2011 found that nearly two-thirds of US households have less than $1,000 in liquid savings.

Are you one of them?

Don’t fret about it – do something about it! That something is building your basic grubstake – that money that will enable you to both build an emergency fund in the Foundation Phase and create a budding investment portfolio in the Accumulating Wealth Phase.

There are a whole lot of reasons why so many people have so little savings. We can hash out the details, but the better approach is to go forward from where we are.

There are two basic ways to begin building savings: cutting living costs and generating new income sources. Ideally, you’ll use a combination both, that way neither will be too painful.
Continue Reading…

November 24, 2013 by Michael Gauthier ·

How to Stack Term Life Insurance Policies for Maximum Benefit

Life insurance is a foundational part of your family’s financial security. Should you or your spouse pass away, the income of your household could drop and cause a hardship on the surviving spouse and children. That’s why life insurance is a must, but with so many different options out there, how do you know which policies are right for you and how to manage them? Let’s take a look at the options.

Term Life Insurance Wins

Whole life insurance policies are obscenely expensive, and too many insurance agents recommend these policies because of the high commissions they’ll earn on the sale. Insurance shouldn’t be considered an investment, and that’s how these policies are often sold.

On the other hand, level-premium term life insurance policies cost much less and allow you to invest your savings – if that’s the best choice for your savings – instead of having the insurance company do it for you.

Term life insurance wins.
Continue Reading…

November 22, 2013 by Michael Gauthier ·

How to Avoid Taking Risks that Might Be Killing Your Returns

Risk is an important factor to consider any time you choose investments. There are a number of risks when it comes to investing, and learning how you can best mitigate those risks now will mean higher returns in the future.

Below are three concepts you’ll need to remember as you’re making investment decisions. Internalize this information, it will serve you and your portfolio well.

1. Understand that diversification is critical.

You’ve heard it said that you should diversify your portfolio. This is one of the easiest concepts to grasp and it is also one of the most important.

Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land. – Ecclesiastes 11:2 NIV

This timeless investing principle has one critical purpose: to eliminate risk. Keeping a portfolio containing a variety of investments smooths out the rough patches in the stock market. It lowers your volatility.
Continue Reading…

November 4, 2013 by Michael Gauthier ·

5 Critical Financial Steps Before You Contribute to Your 401(k)

Pensions are a thing of the past. Social security is questionable at best. Why would a Certified Financial Planner™ tell you to wait on investing in a 401(k)?

There’s a simple answer . . . .

Many Americans are trying to do everything at once, and in doing so, they are spreading themselves to thin and not taking care of their immediate financial needs.

Build a Solid Foundation First

Jesus once told a story about a wise man who built his house on the rock:

Therefore everyone who hears these words of mine and puts them into practice is like a wise man who built his house on the rock. The rain came down, the streams rose, and the winds blew and beat against that house; yet it did not fall, because it had its foundation on the rock. But everyone who hears these words of mine and does not put them into practice is like a foolish man who built his house on sand. The rain came down, the streams rose, and the winds blew and beat against that house, and it fell with a great crash. – Matthew 7:24-27 NIV

The foundation is a critical component to any structure because it helps the structure stand the test of time. Though many storms may come, the structure stands firm because it is firmly planted in place.
Continue Reading…

November 4, 2013 by Michael Gauthier ·

How Much Money Should You Have in Your Emergency Fund?

Unfortunately, emergencies happen. It’s a fact of life. However, the good news is that we can prepare emergencies – and how important it is to do so!

Everyone should have a certain amount of money in their emergency fund; how much money, is the question that will be answered here.

As you’re working through the Foundation Phase in your financial plan, you’ll begin with $1,000 in cash as your short-term emergency fund. This is a great starting point, and it will help you handle all of those small emergencies you might encounter as you’re putting in place appropriate insurance policies, creating your estate plan, and paying off all your consumer debt.

Once you’ve accomplished all of these goals, it’s time to create an additional emergency fund that you will fill with three to six months of living expenses. What amount should you choose? Let’s take a look at the Four-Question Emergency Fund Calculator.
Continue Reading…

November 4, 2013 by Michael Gauthier ·

How Healthy is Your Budget: Taking Your Financial Pulse Using Common Ratios

Not all budgets are created equal.

Whether you’ve been working a budget for years or are just getting started, it’s important to check your budget’s pulse with some common ratios to determine if you’re spending too much money in certain areas.

What are those areas? Great question.

In this article, we’ll look at your housing expense pulse, consumer debt pulse, and total debt pulse. So, pull out your calculator and find out if your budget is healthy, needs some lifestyle tweaks, or requires major surgery.
Continue Reading…

October 29, 2013 by Michael Gauthier ·

10 Common Budgeting Mistakes and How You Can Avoid Them

How you budget your money matters. Unfortunately, many people fall into financial traps set by society or simply fail at properly managing their finances because they aren’t paying attention to what’s happening.

You don’t have to fall victim to these financial woes. You can change your financial future for the better by avoiding these common budgeting mistakes. Are you ready?

Common Budgeting Mistakes You Can Avoid

1. Not having an immediate emergency fund of $1,000 in cash.

This emergency fund is designed to protect your budget and keep you on track. Life’s emergencies are going to happen. It is not a matter of if, but when. Most emergencies cost less than $1,000. A stolen purse or wallet can leave you without access to your money for an extended period of time. Have the cash!
Continue Reading…

Aligning Goals

Efficient Service

Strategic Portfolios

Fiduciary Responsibility

The Recent Stock Market Drop

How to Keep Calm During a Stock Market Drop

Market History

Term Life Insurance Wins

1. Remember that the longer you wait, the larger your payments.

1. Understand that diversification is critical.

Build a Solid Foundation First

Common Budgeting Mistakes You Can Avoid

1. Not having an immediate emergency fund of $1,000 in cash.

Our Location

Follow Me