Christianomics

Christianity and FIRE

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A Brief Anecdotal History of Church Teachings about Money

Historically, Church teachings related to money can be summarised in one word:  Negative.

Very rarely is there, or has there been, a balanced view of money and Christianity.

Christians are taught to not “store up for yourselves treasures on earth…” and that “it is easier for a camel to go through the eye of a needle than it is for a rich person to enter the kingdom of God”. As a result, generation after generation of Christians have been afraid to amass too much wealth.  They live average lives and are careful not to become too “rich”. Before the Covid-pandemic, the average Australian household saving rate was less than five per cent.  Not only is that a rate at which people will struggle to retire comfortably at all, it is also a rate that has implications for the church in a broader sense.

Christianity and the concept of FIRE

 

FIRE - Financial Independence Retire Early – can be achieved by being disciplined and adhering to a few key rules.  It is a mathematical-based concept supported by many years of historical data and statistics which prove that by curbing unnecessary spending and committing to conscious investing you will not only retire early, but you will also be able to contribute more to your church and community.

This is a very brief and general description of FIRE because my aim here is to explore and discuss how the concept supports and aligns with Christianity….as counterintuitive as that may sound.

Some common Christian misconception about FIRE

 

1.  A general misunderstanding about FIRE is that you must be rich to “retire early”.

“Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God” - Matthew 19:34

“The love of money is a root of all kinds of evils…” 1 Timothy 6:9-10.

Firstly, Christian critics of FIRE need to define what is considered rich. 

For example, while $1.5 million is, undeniably, a significant amount of money, for many young white-collar workers in Australia’s major cities saving that amount within a few years is a realistic proposition.  Unfortunately, however, housing in those same cities means that wanting to buy even a modest family home will set you back a similar amount.  So, should a young professional who wants to establish roots in their community by buying a family home be considered rich?

FIRE is not about amassing wealth for the sake of amassing wealth.  It is about harnessing the power of the money you have honestly earned through hard work to generate a modest but sustainable income earlier in your life, thereby freeing you up to serve your community and church. 

Surely Christianity would support a “rich life” that allows you the time and financial freedom to contribute to your church and society in general?

 

2.  FIRE is diametrically opposed to the love of money and the accumulation of Earthly things

“Do not store up for yourselves treasures on Earth…For where your treasure is, there your heart will be also.” – Matthew 6:19-21

This verse really refers to the love of money and Earthly things.

FIRE does not encourage you to work to earn money to demolish your smaller barn and build a bigger and better one…ad infinitum.  Instead, FIRE is about no longer being preoccupied by money and/or overwhelmed by consumerism so that you are able to build your happiness around more valuable things.

Many people unconsciously become slaves to money and the accumulation of it, allowing it to become their master, but living on a passive income generated through appropriate investments turns it into your servant. Retiring early will usually mean you are committed to living on a conservative yearly allowance, and while it may by a somewhat minimalistic lifestyle built upon a financial intentionality, it does allow you to pursue those things that are far more valuable than money…“for where your treasure is, there your heart will be also”.

As a Christian, I believe that any fellow Christian considering the pathway to financial independence to retire early should first examine every aspect of their life and heart to ensure they are pursuing God first.  When considering your finances imagine you are the manager of God’s money, not the owner, and that you have been entrusted to be a good steward of it and honour Him with it.

3. You will always be anxious about what you accumulated

At some stage, all retirees, Christian or not, will feel anxious that they may lose the nest egg they have worked hard to create.

Feeling this anxiety is not a sin…it is about taking care of yourself and your dependents.

A foundation of the FIRE concept is to essentially “set and forget” your investment, thereby alleviating at least some of that anxiety and ensuring you are not fixating on accumulating wealth for the sake of accumulating wealth.  Certainly there are times when you will need to re-assess a portfolio or make some other financial decision but, by and large, because your investments are automated you are free to focus on your commitments to your Church and community.

Rather than being anxious about what you have accumulated, when you are financially independent and can retire early you should ask yourself:  Am I being generous with what I have accumulated? Am I honouring God with my money? Am I idolising my nest egg? Am I still productive despite retiring early?

4. God did not design us to retire early and pursue a life of leisure

A common misunderstanding around retiring early is that you actually retire in the traditional meaning of the word.  This is not how Christians who retire early define it.  

Rather, once you are able to retire, you are unhindered by financial constraints so you can do what you want. This can mean cutting back your work to three days a week so you can spend more time with your family, or allowing yourself to pursue a career change as a painter, singer, or writer which may not have financially viable before. It may mean going back to university or to a Bible college. You will finally be financially free to pursue your calling.

While doing nothing is also obviously an option it is not something a Christian should consider.  Some may argue this point asking why it is okay for an older retiree to pursue a life of luxury but not a younger one and there are a few different answers to that including the fact that the conservative allowance allocated to many early retirees in not actually conducive to a luxurious life.   

 

5. You can’t serve both God and money!

“No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” – Matthew 6:24

When you retire early and choose to live a minimalistic lifestyle, surely money is in fact serving you, not only by allowing you to contribute in meaningful ways to society, but also by minimising your accumulation of material objects thereby benefiting the environment.

6. How can you be generous when you FIRE?

Simply, because you are no longer pursuing financial wealth through remuneration-based employment, you are now free to pursue whatever your calling or passion may be.  As a Christian this will often involve contributing to your community through offering your time, skills, expertise, and sharing whatever you are able to share.

 

At this stage I hope I have, to some extent, addressed some of the common misconception about being financial free and retiring early. I will now put forward a case for FIRE and Faith.

 

A Case for FIRE and Faith

Money and Work/Life Experience

Anecdotally, over the last decade, I have noticed something amiss with Christians going into Ministry.  Young Christians are dropping out, or getting burnt out, at an alarming rate.  I have seen Brothers turn their back on their faith.  I have seen Pastors burn out.  I have seen people leave the Ministry and return to secular work.

It has been very disturbing and concerning to witness and, after considering and discussing it with other likeminded people, I believe there are several reasons for the trend of which I will touch on two here.

Firstly, I don’t believe people working through the Ministry Training Strategy (MTS) can survive on the funding amount they are obligated to raise each year before they can begin work.  Raising these funds can be quite stressful for anybody, let alone a young person, and, adding to that stress, is the fact that the amount increases each year.  And this is not just an issue for those going into the MTS, often even young Pastors are underpaid.

Unfortunately, however, we live in a world in which money is still a necessity and, because the compound effect works best the earlier you start, a low income can severely impact your ability to retire when you want to.  For example, suppose that after university you choose to work in Ministry rather than in a secular job.  For five years, before you decide it’s not for you, you earn $500 per month less in the Ministry than you would in the secular world.  Effectively you will have lost $206,000 over 30 years.  And this does not even include the lost income from starting at the bottom of the corporate ladder.  For low-income earners this is a lot of money and may mean having to work another decade before being able to retire.

Secondly, a young Christian going into Ministry without achieving at least some key life and work milestones and experiences can be overwhelming.  They may not be able to relate to some people, or may not be able to offer appropriate advice, when ministering to them.  Further, I believe Ministry burnout can be directly attributable to young Christians going into Ministry without an established work ethic or understanding of “office politics”.

Now that I have set the scene, here is the solution:  I believe very strongly that a Christian should go into secular work before any Ministry and/or Bible college.

If I were to be forced to give an answer, I would say until at least 30 years of age.

There are a number of benefits to this solution: Firstly, you will suddenly be exposed to more non-Christians than many Ministries so you have to opportunity to make disciples which you can then appeal to when you go into Ministry.  Secondly, you will be able to gain work experience, build resilience, and mature before you go into Ministry.  Thirdly, you will be able to relate to people in your Ministry better as you will have more life experience and will be able to offer them more than prayers…which are, of course, still amazing.

 

Reliance on a government welfare system when you have no medical conditions is not loving

Sadly some truths are harsh.

Currently, Australia’s total government debt is over $1.3 trillion, a figure exacerbated by the pandemic. This debt is completely unsustainable and, in the future, may cripple the nation. It could affect our credit rating which would have a ripple effect through our economy, resulting in business becoming far more expensive to do.

Luckily there is something Christians not significantly hindered by a medical conditional can do:  Start investing!

When you invest in this environment, government welfare can remain stagnant for many years…even decades.  Meanwhile, although your passive income may start low, it will be growing and even just the dividends earned will, generally, be greater than inflation…let alone the total return.

Please don’t misunderstand me – this is not about looking down on people who truly need government assistance.  I am saying that the most loving thing an able-bodied person can do is look for ways to get off welfare, thereby freeing up the system for those who truly need their payments and reducing government debt.

 

Freedom

When you FIRE, you attain the freedom to pursue your aspirations without having to worry about paying bills; the freedom to leave a toxic workplace, team, or environment; the freedom to survive a pandemic without a job; the freedom to serve more at your Church…without pay, if you wish.

I cannot speak to all Churches, but in situations I have been privy to, employment costs now take up more than 65% of the Church budget.  Depending on demographics, the congregation’s generosity, and the size of the church, this can be a huge burden for members.  I have regularly witnessed Church leaders requesting attendees to “dig deeper”.

Let’s look at an example and see how we can make this model more sustainable: Imagine a Church budget of $200,000 where the Pastor is paid $75,000 and $60,000 is allocated for other workers, and the remainder earmarked for “necessary operational costs”. There are, on average, 100 weekly tithers. This means that they would need to be able to contribute approximately $40 per week, per person.

Now imagine if some of those jobs were taken up by suitable, passionate Christians who have reached FIRE and are not interested in being paid.  Suddenly you have a budget of $65,000 which means attendees need only to tithe around $12.50 per week.  This tithe is more affordable for many attendees, and would probably be exceeded by most, without putting a burden on anyone. In one fell swoop a core cost could be eliminated, and the budget freed up for activities to benefit the entire community such as Church planting, camps, outreaches, and sponsorships.

It is also likely that your Church donates money to MTS workers or international Missionaries.  This expense line item is unlikely to be fully eliminated although it can be minimized because suddenly the number of people who are seeking funding is reduced or does not need to fully rely on others to reach their respective funding target to start working.

Anecdotal evidence suggests that the number of MTS workers that reach their annual target funding is in the minority. It would be a shame if we couldn’t get enough workers because of money issues.  MTS workers do important, difficult, and sometimes dangerous work, convincing non-Christian university students and workers of the urgency of following Jesus and developing the faith and leadership of existing members.

Financial independence is, of course, not limited to reducing Church budgets.  It also relates to freeing up time.  You will often hear that you can learn to balance, manage, or prioritise your time better.  However, if your job requires you to work between 40 and 50 hours a week, you may be able to cut it down to 40, but then you probably risk losing your job. 

When you FIRE, suddenly you will have 50 hours you can give to your Church…or other related activities such as a mission trip to build a school or Church, mentoring a younger Christian on their lunch break, or being mentored by an Elder or Pastor.

I have witnessed, firsthand, how vital retirees are in keeping a Church humming along and operational…and how they are missed when they are in short supply.

Currently there is a supply issue of passionate Christians who don’t need to be paid…and that is what I want to change.

Financial Stewardship

Again, we are just the manager of God’s money, and we need to be informed so we can manage it well.  Obviously, we are being called to be good stewards of the finances he has blessed us with:

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” – Proverbs 13:11 ESV

“Every prudent man acts with knowledge, but a fool flaunts his folly. – Proverbs 13:16 ESV

“Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.” – Proverbs 21:20 ESV

We have all heard the stories about lottery winners who win massive lump sum amounts and squander it all within a short period of time. Their lives are destroyed through this unexpected windfall. They have not built up the discipline and self-control to deny themselves of the Earthly treasures, and they do not know where to go for advice. They also end up getting requests from family and friends…many that they didn’t know they had!

Building up wealth over time, making strategic and thoughtful decisions - with or without guidance from a financial professional, and consistently learning about gradually increasing wealth helps you to manage your money responsibly and wisely. This is one of the key principles of FIRE in which your initially small investment grows over time from your regular contributions and reinvestments. Whether you like it or not, even if you don’t contribute another cent, it will continue growing.

Being wise with money has nothing to do with loving money or making money your master. In this context it’s actually serving you because you are personally choosing to leave the workforce with $1.5 million, for example, instead of working until 60 and having $20 million. You have made the decision that it is enough to cover your annual expenses, with a buffer, and will need demonstrate discipline and constraint to make it last a lifetime.

Leave a Legacy

“A good man leaves an inheritance to his children’s children, but the sinner’s wealth is laid up for the righteous” – Proverbs 13:22 ESV

How powerful is this verse? Not only did the writer says to leave inheritance for their children, but also for their grandchildren. To do this, you will need to understand how to invest to accumulate a certain amount of wealth within a certain period.  It would appear Scripture supports wise investing so you can leave a legacy for years to come.

Conditions – How to have a healthy relationship with money?

I will conclude by providing some verses to keep in mind while you are pursuing FIRE:

“Whoever is greedy for unjust gain troubles his own household, but he who hates bribes will live.” – Proverbs 15:27

“Whoever pursues righteousness and kindness will find life, righteousness, and honour.” – Proverbs 21:21

“Whoever has a bountiful eye will be blessed, for he shares his bread with the poor.”- Proverbs 22:9

“A faithful man will abound with blessings, but whoever hastens to be rich will not go unpunished.” – Proverbs 28:20

“A stingy man hastens after wealth and does not know that poverty will come upon him.” – Proverbs 28:22

“Let the one who is taught the word share all good things with the one who teaches.” – Galatians 6:6

“Thus says the Lord: “Let not the wise man boast in his wisdom, let not the mighty man boast in his might, let not the rich man boast in his riches, but let him who boasts boast in this, that he understands and knows me, that I am the Lord who practices steadfast love, justice, and righteousness in the earth. For in these things I delight, declares the Lord.” – Jeremiah 9:23-24

“The earth is the Lord's and the fullness thereof, the world and those who dwell therein” – Psalms 24:1

“And he said to them, “Take care, and be on your guard against all covetousness, for one's life does not consist in the abundance of his possessions.” – Luke 12:15

“Shepherd the flock of God that is among you, exercising oversight, not under compulsion, but willingly, as God would have you; not for shameful gain, but eagerly” – 1 Peter 5:2

“Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honour to whom honour is owed.” – Romans 13:7-8

"But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” – 1 Timothy 5:8

 

How much you need to invest to reach FIRE

I have said above that 30 should be the earliest that you should consider FIRE if you can reach it, but not everyone can. I have done some calculations to give you a guide on how much you need to invest each month to reach regular FIRE ($1.5m in investible asset) by number of years from having zero invested. Just remember that you can start working from aged 15 if not earlier in most places in Australia.

Note: Assumptions used are 7% return p.a. inclusive of inflation compounded monthly

It is clear from the table above, the earlier you start the less you need to invest each month and the more you can rely on compounding to reach regular FIRE (passive income of $60k/year). You could even let dividends reinvestment do all the work once you’re happy with the time left to FIRE and want to balance enjoying the journey as well. The $1.5m target is generally for a couple. This table does serve as cheat sheet to quickly see how long you’ve got left before you can retire.

 

How you can speed up FIRE

FIRE can be like sin, you will fail often (at least initially!) in staying frugal and reining in unnecessary spending because it requires discipline and self-control but here are some financial/life/career tips that will help you reach your target earlier. Self-control is one of the Fruit of the Holy Spirit afterall.

Remove any temptations that can cause you to fail or relapse

Not everyone has self-control mastered or all the time so it may be helpful to remove or block any websites/apps that is tempting you to spend. Your accountability buddy could be of use here.

Track and tick off every expenses that you don’t need to survive

This allows you to get on top of unnecessary expenses and take action early on. I would personally target spending no more then $20k per year per adult ($40k for a couple). For mandatory expenses like groceries, utilities, internet, mortgage rates etc you should always be shopping around for the cheapest everyday low unit cost or promotion items. Once the frugal habit is second nature, you won’t need to track as often.

Invest your savings into Shares/Exchange Traded Funds (ETFs)

You may start off with a low salary but you need to remember that distributions will grow that will increase your wage every time the distribution is paid out and reinvested in addition to your income growing over time. What better way to invest than to bet on a company or an index of a diversified national economy (also known as ETFs) to perform over the long term which you will have part ownership of.

Diversify your degree and invest in yourself

I’m not here to tell you not to do the Arts/Fine Arts/Music/Public Relations degrees. If you have to do these degrees, I would pair it up with another degree that you can still obtain a high mark in which allows you to get a higher paying job easier if needed. Degrees such as Maths, education, engineering, accounting, data science, and computer science. A tradie apprenticeship is also a very valid track in Australia. Oversupply generally occurs in degrees with low barriers to entry (low score to get in) and/or easy to obtain high marks. Once you get a few years into a field, you should consider further training that will allow you to get paid more.

Don’t stay in the same company for more than 2-3 years without promotion or significant salary increases

Generally, you would only get a CPI increase in your salary every year which may not keep up with your market value. You should always keep an eye out for jobs with similar responsibilities and/or higher titles, to start the process of negotiating your wage before jumping ship if the difference is too significant. I have also allowed recruiters to reach out to me on LinkedIn for opportunities I miss.

 

Start a side hustle/business/second job

This allows you to take a risk on your dreams without losing the financial stability of the full-time job which you can go full time once it can pay for your lifestyle. The second job can just be a way for you to have a bit extra to invest with early on. Some options without starting your own business might be Roy Morgan Surveyors, election officer, census officers, retail/hospitality jobs outside of your primary job hours.

Choose your partner wisely if you don’t have the gift of singleness

Financial reasons are said to be one of the top reasons for divorce/relationships breaking down (1/8 relationships in Australia). This is not just a lack of finance but also non-aligned financial goals as well – this can be a big issue when one is a spender, and one isn’t and I don’t recommend this union especially when the saver is worse off if there is a divorce. Having a separate account means that your money can’t compound as much as a joint account. Self-control issues might be a cause for concern as to what other temptations they might fall into and to what extent.

Beware the lifestyle creep

As you earnings increase beware of keeping up with the Joneses.

 

Advanced bonus tip: Consider buying a house and utilise the tax benefits and leverage to invest into Shares/ETFs.

 

Case study

Let’s look at a scenario that will allow you retire within a decade (aged 32/33) of your first job after university/apprenticeship for both single and couples.

 

Given the short time horizon, sacrifices must be made, and your budget needs to be as basic as possible especially for people with a low income. I’ve complied a budget that is not too dissimilar to the one I was following when I was single, and in a relationship.

 

This case study is not meant to imply that there is only one black and white way to apply the idea of building up assets before setting out to minister. it's ok to start your ministry track after ten years or earlier without reaching the target if you don't want to work for free but simply have the flexibility to ask for less which does help many churches.

Assumptions: 1. You will house share as a single but not as a couple, 2. A couple will rent a studio/single bedroom apartment, 3. Both single and couple will be working from home half the time public transport/petrol cost, 4. Plenty of cheap sim plans from Kogan, Lebara, Aldi, Woolies, Circle Life, Felix Mobile, 5. Haircut 6 times for men and 3 times a year for women.

 

Income and investment for singles:

Assumptions: 1. First year salary is $50k which is slightly more than median wage and well lower than the average, 2. Salary increase by 10% each p.a. until year 8 to be conservative but accounts for at least 1 promotion, 3. Dividend yield is 4% p.a. and capital return is 3% p.a. inclusive of inflation, 4. Investing all savings, 5. This table is based on after tax income

 

Income and investment for a couple

 

Assumptions: 1. First year salary is $50k each. This income is significantly lower than the current average full-time income of $90k and not too far off the median income, 2. Salary increase by $5k each p.a. until year 5 to be conservative but accounts for at least 1 mini promotion each, 3. Dividend yield is 4% p.a. and capital return is 3% p.a. inclusive of inflation, 4. Investing all savings, 5. This table is based on after tax income

 

In order to be more conservative, you don’t start investing until your first job after university for this scenario. For either singles or couples to retire in a decade you will need to be able to invest all your savings after expenses. This will result in ~$768k for singles and ~$1.5m for couples in investible asset. This is ~$31k and $60k passive income per year respectively.

 

Anyone that earns more the income shown in any year will have more disposable income to either retire earlier or a bit later if you want more buffer or can afford to spend a bit more to make the journey a bit more enjoyable.

 

Please note this is not a race and you should invest at a pace that is comfortable for you but this gives some idea for those ambitious and able people.

 

Tithing was not included in the budget as this is very personal to everyone and dependent on their salary, theological stance, average number of tithers and church budget. It doesn’t have to be a huge amount though, for example $1k/year is ~$19.23/week, $2k/year is ~$38.46/week, $3k/year is ~$57.69 and $4k/year is ~$76.92. You can see how the church budget can play a huge part in reducing people’s budget and this high opex model is ripe for disruption. In fact, Francis Chan’s hugely successful zero ministry costs, We Are Church (Home Church) model had already been implemented and in action for the last few years and could be the future.

Final Thoughts

It is obvious that many Christians consider retiring early with investments worth $1.5 million as somehow being un-Christian.  Especially when they, incorrectly, assume the early retiree will be sitting back and doing nothing worthwhile with their life.

Conservatively invested, $1.5 million may pay an early retiree a sustainable allowance of around $60,000 per year. 

 

More importantly, however, it will set them free from the shackles of remunerated employment and material consumerism and allow them to pursue the passions and interests that bring joy to their hearts while contributing to their communities and churches.

The money that we are blessed with is never really ours so we must manage it wisely and in a manner that leaves a legacy for the generations which follow us.

Surely one cannot pursue a more Christian lifestyle than that?

 

The FIREnance Guy is a frugal Christian professional from Sydney and runs a personal finance blog (https://www.thefirenanceguy.com/) as a hobby. He has rented in Hobart, Melbourne, Canberra and Sydney between 2011 - present and also likes to keep updated with the rental market due to property interest and the flexibility of living in a rental. He is passionate about free financial literacy and giving people, especially ministry workers the information and tools to live a more sustainable life and leave a legacy for generations to come.

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