Wednesday, September 08, 2021

Strange Applications (or How I Learned to Stop Worrying and Love Compound Interest)

The subject of money is a controversial one among believers, not because the Bible is unclear about the dangers of loving mammon or misusing it, but because applying the principles we find in scripture to each personal situation is an individual responsibility worked out, well ... individually.

This being the case, we find a variety of approaches to finances among believers. I’ve tried a bunch of them. Let me tell you a story ... but first, we’d better start with the basics. What do the scriptures say? Let’s get that straight.

The Scripture on Giving

The Law of Moses commanded giving to the poor and needy, as well as to God through the institution of the priesthood. Material blessing was promised in proportion with one’s generosity. Solomon wrote that even giving to the poor is really a loan made to the Lord himself, one which he will generously repay. Dozens of Old Testament verses throughout the Law, Psalms and Prophets reinforce the importance of generosity in a lifestyle pleasing to God.

Jesus had much to say about giving, including the spirit in which his followers are to give. “It is more blessed to give than to receive.” “Give, and it will be given to you.” “Sell your possessions, and give to the needy.” “Give to everyone who begs from you.” “When you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. And your Father who sees in secret will reward you.”

In the unlikely event we were inclined to discard the aforementioned teaching on dispensational grounds, the writers of the New Testament take up this same theme and apply it to present-day Christian living. Paul tells the Corinthians, “Whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully. Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver.” Hebrews says, “Do not neglect to do good and to share what you have, for such sacrifices are pleasing to God.” To Timothy, Paul writes, “Charge [the rich] to be generous and ready to share.”

Arthur Shearman sums up the teaching of scripture in the 1984 edition of Church Doctrine & Practice this way:

Christians, then, should give (1) devotedly (Godward); (2) lovingly (manward); (3) willingly (with cheerfulness); (4) liberally (abounding in this grace); (5) methodically (purpose – preparation – proportion); (6) unostentatiously (no self-display); (7) honestly (only what is truly theirs).”

In short, a Christian who doesn’t give regularly, proportionately, intelligently, discreetly and generously is a non-sequitur. His conduct does not follow logically from his confession of faith.

The Scripture on Debt

The Bible is equally clear in its teaching about debt. The Law of Moses commands, “If a man borrows anything of his neighbor, and it is injured or dies, the owner not being with it, he shall make full restitution.” The teaching of Deuteronomy is that a nation blessed by God lends generously but need not borrow. Solomon wrote that the borrower is slave to the lender. In the Old Testament, debt is seen as a necessary evil which wise men avoid.

To Christians, Paul writes, “Owe no one anything” and “Pay to all what is owed to them.”

In summary, then, the teaching of scripture about debt is that it is to be avoided wherever possible. When incurred, financial obligations are to be met in full in accordance with the laws of the land. And if the borrower is slave to the lender, and no man can serve two masters, the Christian ought to make getting out of debt a priority in order that he may undistractedly serve Christ.

A Christian in debt has a problem. It may be of his own making or it may be due to circumstances partially or wholly outside his control (unemployment, illness, family problems, business failures, bad investments, etc.), but either way, debt is an unnatural state for the believer, and a situation that requires looking to the Lord for deliverance.

Confession is Good for the Soul

So now, the story. A quick disclaimer: as opposed to the foregoing barrage of scripture quotes, which are the word of God himself, this will just be a little personal testimony; unauthoritative and perhaps even irreproducible. I would hate to think anyone might attempt the same thing in anything less than a perfectly clear conscience before the Lord and end up with different results. I can only tell you what happened to me. You may also find my application of Lucan parables to my personal finances questionable at best, and you may find the inferences I draw from what happened to me dubious or speculative. Feel totally free on that count.

With that in mind, here goes. I grew up believing Christians should give generously and live debt-free. I believe that today. Still, I haven’t always been responsible with money. I have given a whole lot less than I would have liked, and borrowed a whole lot more than I should have. I have spent significant portions of my life paying back large amounts of compound interest at high interest rates.

Not good.

Principles in Conflict

I will spare you the obligatory spate of excuses about living in a debt-based economy where bank loans and Visa cards are available to us often before we even leave school, the usual whinging about student loans or the financial needs and bank balance surprises that occur when raising children, the perils of inflation, deflation, stagflation, and so on. The Christian knows what he is doing when he rationalizes taking on debt, and he knows the inevitable outcome, including the fact that it will bring two sets of ongoing obligations into conflict with one another.

Let’s get right to the meat of the problem. Ordinarily, the principles of scripture do not come into conflict. The Lord did not design his instructions to be difficult to follow. His yoke is easy and his burdens are light. It’s the ones we take on ourselves that are onerous and extremely difficult to divest ourselves of.

The obligation to give generously and the obligation to live debt-free are not mutually exclusive. One can and should do both. But it should be obvious that the more debt one incurs, the harder it is to justify giving generously.

Head to Head with the Corban Principle

Alexander Shearman might have called it the “honesty principle”; that we can only give to the Lord what is truly ours. I call it the Corban Principle, and have written extensively about it: You cannot give to God what actually belongs to someone else. God doesn’t want anything from you or me at someone else’s expense. Moreover, even if you were to dutifully tithe your mortgage payment or property taxes, the bank and/or the city are still going to come looking for their pound of flesh.

I took the Corban Principle very seriously indeed. I prioritized debt repayment over giving to the Lord’s work for years. I wasn’t comfortable with it, but I found it very difficult to justify giving away money I thought wasn’t mine to give.

Now, you may find this quite odd. You may consider that I was missing the obvious, and you would be quite right.

“Tom,” you say, “What about ‘Seek first the kingdom of God and his righteousness, and all these things will be added to you’? Or what about Haggai chapter 1: ‘You looked for much, and behold, it came to little. And when you brought it home, I blew it away. Why? declares the Lord of hosts. Because of my house that lies in ruins, while each of you busies himself with his own house’? What about that, Tom?”

Good points, all. According to your faith be it unto you. And, to be fair, it wasn’t obvious to me that I was ignoring basic Christian teaching. I was still giving to the Lord here and there; it was just sporadic and disproportionate. My financial strategy was logically inconsistent and, if I am honest, more than a little self-interested. Still, I really was trying to get out of debt. Each paycheck, I would take everything I could possibly spare and put it into debt repayment. And, rather predictably, each paycheck I got further and further behind.

Like the prodigal son in the fields with the pigs, I eventually “came to myself”. It was obvious that, even assuming I had been acting with the best of intentions in following what I understood the word of God to teach, I wasn’t getting anywhere. Compound interest was eating me alive. I was going backwards. Even if the principle was correct, something was wrong with my application of Mark 7.

An Unlikely Solution

Now, let me make it clear there is nothing wrong with the Corban Principle. It’s a good one and a biblical one. What needed to change, it turns out, is not my belief that you can’t give to the Lord what doesn’t belong to you, but my understanding of how that applies in the modern debt relationship.

What enabled me to get comfortable with the idea of paying back debt in a much more relaxed fashion, and giving more to God in the immediate present, was applying another of the Lord’s parables to my financial situation, this time one found in Luke 16. I kid you not, it’s the parable of the dishonest manager. You will remember that it’s not his dishonesty that commends him, it’s his shrewdness. He uses everything he has at his disposal — including all his master’s property — to ensure a better outcome for himself in the future.

“Hmm,” I thought, “that’s interesting.”

As you know, banks actually love debt, and they love you being in it. Far from censuring you when you incur it, they happily offer you more. So there is no issue with taking your sweet time to pay back debt. So long as you make regular payments against it, most banks (and certainly the credit card companies) couldn’t care less if you only cover the interest in any given month. In fact, that is what the “minimum payment” on your credit card statement usually means: that you are ONLY covering the interest on your debt, and not in fact paying off anything at all. Do this long enough, and I guarantee you will become one of your bank manager’s favorite people.

Christians are less thrilled with the concept. They will tell you making minimum payments is poor stewardship. Technically, they are not wrong.

Catch 22

So, should a Christian get comfortable with making only minimum payments? Probably not. But if the alternative is never giving anything to the work of the Lord, well ... priorities, right? And you will not find the banks complaining at your strategy. They make out like bandits from it.

Moreover, it wasn’t as if I had no resources to offset against my debt. I had years of accrued pension funds sitting in accounts here, there and everywhere. The problem was (and remains) that I can’t touch them until I retire, and I couldn’t afford to retire. Catch 22. Nevertheless, though I couldn’t make use of these funds to solve my debt problems, they did provide an incentive for the banks to leave me alone to do it my way.

I resolved before the Lord to put his kingdom and his priorities first every paycheck, even if it meant paying nothing but the interest on a very sizable debt. At least, I reasoned, there will be reward in heaven and I will be participating in the Lord’s work here and now, even if I’m paying way more interest to do it than anyone would deem reasonable, and even if I never make the slightest dent in the principal. I wasn’t employing this new strategy because I was sure it would work ... in fact, I didn’t see how it possibly could. I simply believed it was the best possible response to a bad situation, which is often what happens when you depart from a scriptural principle: you end up choosing not between good and bad, but between bad and awful.

So, I stuck with it, despite what looked like an insolvable math problem. I stopped looking at my debt balance. I stopped worrying about compound interest and what the banks were charging me. I figured the Lord could afford it. He owns the cattle on a thousand hills, right? So, I simply looked at what I had available to work with each week, and tried to use it in the most Christian possible way.

That was a little over five years ago.

Numbering the Fighting Men

In February this year, as I was preparing my tax return, I couldn’t help but notice that my refund check was going to be sufficient to pay off my last obligation to anyone anywhere. I had a general idea things were getting better, but I really hadn’t been living any differently. Over that period, I had not received any giant raises at work, won any lotteries or inherited anything from anyone. I hadn’t changed my spending patterns in any significant way. I had done nothing differently ... except that every paycheck I had taken a proportionate sum off the top and set it aside for the Lord’s work, dispersed those funds as opportunity arose to meet needs, and lived off the rest. That, and I had started handing five dollar bills to needy-looking people on the street without spending a lot of time counting how many, and tipping at 30% instead of 15. Somehow that was never a problem. My kids did not starve. My pets still ate well. And some of my best friends are waitresses.

I hope you won’t think I was like David numbering the fighting men of Israel, or that I was trying to pat myself on the back when I sat down to calculate what the Lord had enabled me to give away over those five years-plus. Really, I was just curious, and I could only make a rudimentary best guess, as I had not kept a written record of everything I was giving away.

You know where this is going, right? My rough estimate of what the Lord had enabled me to give away during that period was within $500 of the very, very large sum he had just enabled me to pay off.

What are the chances of that being coincidence? Not great. Don’t tell me the Lord doesn’t have a sense of humor.

The Upside-Down Kingdom

Now, any accountant knows you do not erase large negative numbers by adding to them, let alone doubling them, anymore than you travel east by walking west ... unless you walk very far indeed.

It has often been said that we Christians have entered an upside-down kingdom in which conquest comes through defeat, leaders are servants, enemies are loved, humility is exalted, the first are last and the last first. These things are true, though quite counterintuitive to the natural man.

To these truths I will add another observation: apparently in this kingdom math works backwards. At least, that’s my experience.

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