ARE YOU ON TRACK TO ATTAINING FINANCIAL FREEDOM?

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Welcome to this blog post in our Better Tomorrow series. In the first two posts, I posed the question, “How much money does someone need to make themselves happy?” We looked at the idea of identifying a dollar amount as a goal to achieve and once achieved, exploring different ways you can use your time and gifts to serve your family and community. If you haven’t had a chance to read or listen to those posts, I would encourage you to start here.

FINANCIAL MODELING AS A LIFESTYLE

I’m a strong believer in modeling. It’s an exercise I have carried throughout my career as an entrepreneur, and it has served me well many times – particularly when faced with financial decisions of lasting impact.

Early on in my career, I developed a system that allowed me to get a clear picture of where we stood financially. I created it using Excel and input formulas for all our personal expenses, family overhead, personal giving, Servant’s Heart Foundation giving, and taxes. Each year I ran various calculations based on the assumptions I felt were appropriate at that time. Though it was built on several hypotheses, which may have altered its accuracy, they offered a good picture of where we stood and, more importantly, where we were headed. 

I utilized this tool for 25 years, and each time I had a major financial decision to make, I would use it to make an effective plan. If I were considering buying a new house, introducing a change to the business, or wanting to give away a certain amount, I would run a model and compare it to the base case model. By doing this, I was able to see the financial implications of each decision for the coming year, as well as the impact of that decision every year for the rest of my life. 

Often when faced with large financial decisions in life, we fail to see the sum of their impact. Generally, there are many factors that are difficult to measure. With this model, ( I had a clear idea of my net worth and what it would look like for the rest of my life. It showed me an accurate total financial impact of each major financial decision.

One of the key decisions I recall this model helping with was when it came to selling our ranch. We used to own a ranch that served us well and blessed us for many years. We would spend four to five months of a year together working on the property. It was not a vacation home. It was more like a part of our lifestyle.

Kathy and I believe this choice to spend holidays at the ranch saved our children from the lavish Orange County lifestyle and kept them grounded and balanced. Over time, we were not spending as much of our time there and decided to put together a model for selling the ranch.

I ran two different outcome models – one with continued ownership of the ranch and the other with selling the ranch. There was a glaring difference between the two. The ranch held numerous rich memories for us. Besides time with our family, we would use it for pastors’ retreats, board retreats, and other ministry functions. 

However, after several conversations over a year, Kathy and I eventually concluded that selling the ranch was a good idea, and our decision was driven by proper stewardship of our resources. We were aware that the money we saved would allow us to donate more. As you can see from this decision, the Excel tool was worth it and brought clarity in a tangible way.

I then created a model for my close friend Kenton Beshore, who was the Senior Pastor at Mariners Church at the time. I put in various assumptions, including education, children’s weddings, retirement, and so on.

The model worked wonderfully for Kenton and his wife Laurie as they now had a clear picture of their financial future, knew what to aim for, where to adjust, and how to confidently continue in the ministry God had called them to. We would meet once a year and update their plan, giving them a sure measure of their progress and growth. 

Through the years, I was able to also help seven other pastors and their spouses. Eventually, I realized I was limited on how many people I could help with my current model structure because it required my team or me to create and manage it.

Then, several years ago, the Lord put it on my heart to develop the model into a program, so anybody could input their data and run the model for themselves. I worked with a software development company for three and a half years to create the program. We tested all possible outcomes and now can run over 40,000 calculations to give a clearer insight of one’s financial future. We also programmed in each state tax code and the federal tax code, so anyone in the country can use it and see an after-tax picture of their financial future. In 2019, the LifeLight Financial Planner was born.

My initial goal was to get 500 pastors to use it. As we thought further, it increased to 5,000 pastors, then 50,000. Three of my strongest motivations for developing LifeLight Financial were to: 

1. Empower people to make informed financial decisions for the rest of their life and experience financial freedom. 
2. Reduce financial stress within marriages, and thereby hopefully prevent divorce.
3. Encourage charitable giving. As users of the LifeLight Financial Planner gain clarity and peace of mind around their financial future, they can give more confidently and generously.

I had several people test the model program before launching it. I recall one of my good friends, who is generally very generous, ran the model and had a big ‘aha moment’ when he realized he could give away five times more than he was currently giving, and it did not impact his financial future as significantly as he anticipated.

His response encouraged me greatly. What if others in the Christian world were able to increase their giving toward ministries and churches? What impact could that possibly have? This made me realize that Christian professionals and entrepreneurs could also benefit from this tool, and my target then moved from 50,000 pastors to Christians across the nation.

HOW THE LIFELIGHT FINANCIAL PLANNER WORKS

Using the planner is simple and straightforward. No software needs to be downloaded and can be used on all computers or tablets. There are a number of questions you will fill out, However there are videos and articles to guide you, along with the Introduction to LifeLight Financial handout provided here. 

Once you create your account, simply follow the prompts and input your data.  Your model should include your earned income, events, savings, retirement account, primary residence, other real estate, life insurance, liabilities, charitable giving, savings, taxable income, and more. 

Other models available on the market today focus on one specific financial element, such as retirement calculators, social security calculators, asset calculators, etc. But the LifeLight Financial model is comprehensive and takes into consideration nearly 20 different elements and gives you a financial picture that includes all aspects of your financial life.

Once you have input all your data, the planner then presents you with a base plan, which is a concise summary of how each financial element impacts current, the following year, and future finances. This provides the user with a complete lifetime financial roadmap.

Try to revisit your plan at least once a year, update any new information, and make adjustments. This will help with both life-changing and everyday decision-making. The planner also offers comprehensive reports, which allows you to stay on track with plans and targets and gives you the freedom to make the right financial choices.

Even though a user might be receiving financial advice from someone, the planner provides an even greater foundation and additional insights.

Currently, the LifeLight Financial planner can be found on two websites:

www.LifeLightfinancial.com – This website broadly caters to Christian users with a section specifically directed toward pastors and incorporates the tax benefits of a pastor’s housing allowance.

www.LifeLensfinancial.com – This website broadly caters to the public.

ACTION STEPS

Most people want to know what their financial future looks like. However, the action steps to pursue that are often missing. Some may even find it scary and overwhelming. However, learning where one stands financially brings peace of mind. 

“When can I afford to retire earlier than planned? Can I afford to pay for my children’s college tuition? Should I buy a home or keep renting?” These questions and many others can be answered with confidence once you have organized your finances. Knowledge is power. 

I strongly encourage you to visit the LifeLight Financial Planning website today and get started on a future of financial freedom.