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Personal Finance | This step in the accumulation process may be complex, but it is pivotal to long-term success

Issue: "The Road to Cana," Feb. 23, 2008

This series is focusing on a Christian perspective on "accumulation"-how a believer ought to approach the accumulation of money he will need for his various life goals. We started with the premise that planning is a commendable thing, and from there, divided "planning" into three stages: (1) Accumulation, (2) Preservation, and (3) Transfer. We reiterated the need for accumulation to be defined in the context of specific financial goals ("retirement" living, college savings, a new house, etc.). We established the basic benefit of compounding and laid out the necessity of an "asset allocation" plan (blending investments of various risk and reward characteristics in such a way that they make sense for our goals and our temperament).

Before moving past the discussion of accumulation, let's emphasize the need for ongoing monitoring of investment accumulations. Goals, timelines, and asset allocations suitable to those objectives are all important, but equally important is the need to monitor progress and make appropriate modifications along the way. Stewardship requires that an "investment policy" be in place, which establishes benchmarks, risk levels, accepted volatility, and total return expectations.

This step in the accumulation process may be complex, but it is pivotal to long-term success. Those accumulating money for a future need ought to have a standard in place to judge their progress by, and firm criteria by which they modify their plan (savings goals, investment strategies, etc.). Setting goals is the initial need; allocating toward goals is the second need; but monitoring and modifying along the way is the third step toward successful accumulation.

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Retiring biblically

Retirement is a period of financial independence where one's financial needs are provided for

"Retirement" is a difficult term for many to grasp. The word most certainly never appears in the Bible, and yet it has become an accepted goal of mainstream thought. Post-World War II culture involved the notion of a "golden watch": People worked until age 65 and then exited the marketplace, prepared for the years they had left financially (through savings, a company pension, and government Social Security). The modern visual we have of "retirement" is often a "do-nothing" period of various leisure activities, and hopefully occasional time with grandchildren.

I use the term "retirement" in an entirely different context, one that pertains to financial goal-setting. "Retirement" to me is "a period of financial independence where one's financial needs are provided for, even if income is no longer being generated." Many people can and do stay productive for decades after they achieve this milestone. Some demonstrate this productivity by staying in the same career or job they were in before they achieved this level of financial independence. Some demonstrate it by exiting the workforce, yet staying involved in consulting or volunteer work.

My point is not ever to suggest how readers set their own "retirement" goals; rather, I want simply to encourage readers to view as a noble thing preparation for a day when body and mind may not be able to generate a paycheck any longer. We do not plan to one day be idle; we plan so that our gifts and talents can be used through a variety of circumstances that life may throw at us.

Ecclesiastes 5:18 notes that it is good to find joy in work: "Behold, what I have seen to be good and fitting is to eat and drink and find enjoyment in all the toil with which one toils under the sun." Christians ought to have a different mindset than the world does about retirement. Idleness is still the devil's tool, even at age 65.

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