Is College Education Overpriced?

Peter Thiel- co-founder of Paypal- garnered plenty of headlines within the past few weeks with some comments on higher education. He believes that the cost of college is a bad investment proposition for many. His comments were featured in an interview with Sarah Lacy on techcrunch.com. He brings up a couple of issues that have been circulating in my head for a while. Those two issues:

1. MIT does an admirable thing by offering almost all of their courses online for free through MITOpenCourseWare. This is an unbelievable resource for those who have the motivation and intellectual capacity to pursue this. So you can receive an MIT education for free or you can spend around $250k to obtain a degree from MIT.

One of the points Thiel brings up is if schools like Harvard, MIT and Stanford are such difference makers for people, why don't we franchise them? Why do these schools insist on elitism?

One of the beliefs that I have had about college in general is that the actual education component is worth very little. Any individual can receive a fantastic education by reading and watching videos on their academic discipline of choice. The true value of college is the relationships you form. The network is where the value is.

I spent around $40k for a business degree at Baylor University in the late 80s/early 90s. The cost of a Baylor education has probably quadrupled since then. For me, the $40k was money well spent. The network of relationships has been worth a large multiple of that figure. But would it have been worth the money if I wasn't a business major? I have my doubts. Would it have been worth $160k as a liberal arts major? Hard to imagine that it would have been.

2. How much of the rapid rise in college tuition prices in the last 20 years has been due to easy access to loans? There are plenty of students who graduate from college with over $100k in loans to repay. Costs tend to escalate when you are spending other people's money. Most people don't think about the consequences. Mark Perry had a blog post highlighting similar problems with healthcare costs. Fifty years ago, health care costs were distributed around 45% out of pocket and 55% to insurance; employers; or government agencies. Today those numbers are 10% out of pocket and 90% other people's money. And we wonder why costs have escalated out of control.

The average student debt was around $8,000 in 1990. That had tripled to over $24,000 in 2009. That figure is higher for students graduating from a private university. And has escalated to over $100k average for students graduating from medical school. Without the leverage in the system (easy access to loans), prices of education would fall. Just as they have for houses in the last 3 years as the availability of credit has tightened.

Put me in the camp of believing that college costs are artificially inflated. This could be potentially good news for those who have younger kids. The prevailing opinion today is that college costs will continue to escalate. Just as that same opinion existed about housing four years ago. If sanity returns to the financing of education debt, you'll probably see costs fall just like the real estate market in recent years.

Ashley Hodge

Natural Resources- Should One Load the Boat?

I enjoyed this interview with Bill Paul and Consuelo Mack. Bill Paul has been following the alternative energy sector for many years and had some fascinating opinions on the future of energy- specifically the potential revolution involving smart grids.

Cisco Systems put out a short four minute video explaining the smart grid.

Listening to this interview got me in a reflective mood. Many investment newsletters that I read today discuss the idea that we are in a natural resource boom that will last for the foreseeable future. You only have to listen to talk radio shows for a short period of time to hear commercials selling gold or precious metals with ominous warnings about the future of the US dollar and US economy.

I believe having natural resources as part of a diversified portfolio of investments has its place. There are some compelling arguments for owning these investments in a portfolio including:

1. The debt problems of mature economies- US, Europe, Japan- that may lead to temptations to devalue those currencies- US dollar; Euro; Yen. A devaluation of currency might lead to higher inflation and higher natural resource prices.

2. The growth of the emerging markets- China, India, Africa, South America, etc...-could produce a lot of consumers that are going to consume a lot of food, energy and the materials needed to build out infrastructure in those countries.

But I believe a healthy dose of skepticism and caution is warranted about prices of food, gold, silver and oil continuing to increase. There is a economics saying, "There is no cure for high prices like high prices." At some price, the incentives for alternatives and innovation kick in high gear. With enough incentives and revenue potential, innovation can happen quickly. And innovation can drive prices lower.

One of my favorite blogs to follow is Mark Perry's Carpe Diem blog. He had a recent post on how the cost of food as a percentage of disposable income has decreased dramatically over the last 80 years. You can find his support here.

John Hussman included this chart in a recent newsletter. The chart should make any student of history a bit nervous about "loading the boat" in natural resources right now. The story of history is progress. I like to refer to it as biblical progression. There will be cycles along the way.

But God has a plan that He is unfolding from creation to re-creation of the heavens and earth. But his stewardship mandate remains intact for humans to use the gifts and talents towards the ends of creating a better world as we eagerly hope for the day when the curse will be removed and progress will be unhindered by greed, decay and corruption- Romans 8:19-22.

As we await the complete fulfillment of this promise, we should heed the words of Sir John Templeton. The four most dangerous words in the English language are: "this time is different."

When Helping Hurts

Just finished a book recommended to me called When Helping Hurts by Steve Corbett & Brian Fikkert. They have a website that explores the ideas they share in this book.

I'll use some future blog posts to highlight some of my takeaways from this book. In general, the book is about poverty alleviation. Trillions of dollars have been spent on poverty aid and yet 40% of the world still lives on less than $2 per day.

Many Christians (myself included) have given to poverty alleviation programs or have invested thousands of dollars to go on short term mission trips without deeply considering the question: does it help?

This book tackles that question. We have seen evidence that government welfare creates a tough cycle to escape and an unhealthy dependency. Are we practicing a form of Christian welfare by giving money only to others without addressing deeper needs?

Many short term mission trips cost a church $25,000+. Is this money well spent? Before reading this book, I would have thought that the cost was worth it for a couple of reasons:

1. Lives and perspectives of those who go are changed and some decide to devote their lives to full-time missions as a result.

2. Those who go on short-term missions become generous givers to the cause of missions in the future.

However, the evidence documented in this book says different. For the most part, short term missions is a poor allocation of resources in alleviating poverty.

How do we define poverty? Those of us that have material comfort are likely to describe it as a lack of money. The poor describe poverty as shame; inferiority; powerlessness; humiliation; fear; depression; social isolation.

Poverty alleviation efforts often communicate the wrong message: that the poor are inferior and need our superiority for what we can give them. In reality, we each need something from the other. We that have resources are not ok. We trust in those resources instead of trusting in God. We need to learn from those who have less what it is like to depend on God for everything.

And those that are poor need from us help to break the cycle of poverty. Together God can fix us. Fikkert and Cobert define poverty alleviation as the ministry of reconciliation: moving people closer to glorifying God by living in right relationship with God, with self, with others, and with the rest of creation.

Looking forward to fleshing out more thoughts from this book- a thought provoking read.

For His Glory,

Ashley Hodge

Lessons from the book of Hebrews

Run the race well. Fix your eyes on the prize. Don't forget why you are running and the hopes and dreams who wish to obtain. Realize that there will be those who want to see you fail. But also many who have already finished the race and are cheering you on. Embrace discipline as you daily train. Get rid of every hindrance that keeps you from running your best race.

These are some of the lessons from the book of Hebrews. I just finished studying the book with a group of friends. Below are some of the important lessons I am taking with me from the book and also how I hope to apply those lessons to my life.

Lesson One: do we want to know God? Do we wish to know His character and His mind? Study Christ. Hebrews 1:3, "Christ is the radiance of God's glory and the exact representation of His nature..."

Lesson Two: One of the great dangers in the Christian life is apathy. Every day we need to prepare our heart for battle to fight the tendency to drift. Hebrews 2:1, "Pay close attention to this gospel, lest we drift away from it."

Lesson Three: Never quit. Have you given in to a sin every day for the last 10 years? Today is the day to start taking back territory from the enemy. Have you drifted away from Christ? Today is the day to re-engage in the battle and cling to Him who leads us in war against sin and every evil force. Hebrews 3:14-15, "Encourage each other every day as long as it is called "today" that none of you are hardened by the deceitfulness of sin. For we have come to share in Christ if indeed we hold our original confidence firm to the end."

Lesson Four: Rest in the finished work of Christ to secure our salvation but do not rest from doing good works in response to this radical grace. Christ worked and then rested. We rest in Him; work for Him and then enter His rest (Heaven). We can approach Him with confidence to receive His grace daily as we strive to live for Him. Hebrews 4:16, "Let us draw near to the throne of grace with confidence, that we may receive mercy and find grace in the time of need."

Lesson Five: Embracing suffering as the path to obedience is the normal Christian life. Through many trials and hardships, we will enter the kingdom of Heaven. Hebrews 5:8-9, "Although he was a son, he learned obedience through what He suffered. And being made perfect, He became the source of salvation to all who obey Him."

Lesson Six: We have a strong encouragement to hold fast to the promise of God- His guarantee of an oath and the unchangeable nature of His character. Our hope in Christ is a steadfast anchor for the soul. Hebrews 6:12, "Do not be sluggish, but imitators of those who through faith and patience inherit the promises."

Lesson Seven: A multitude of priests served the people before Christ- constantly offering temporary sacrifices for sins. Jesus is our permanent Priest- He offers a forever sacrifice for our sins. Hebrews 7:16, "He became a Priest not on the basis of lineage, but by the power of an indestructible life."

Lesson Eight: God is in the business of installing the new covenant in our lives. He wrote His laws on tablets to the people of Israel under the Prophets. Now he writes His laws on our hearts through the power of the Holy Spirit. Hebrews 8:10, "For this is the covenant that I will make with the house of Israel after those days, declares the Lord: I will put my laws into their minds, and write them on their hearts, and I will be their God and they shall be my people."

Lesson Nine: This life is our opportunity. There is no reincarnation; no second chances to respond to the purposes of God. He appeared once to deal with sin. He will appear a second time to bring salvation to those who are waiting for Him. Hebrews 9:27-28, "And just as it is appointed for man to die once and after comes judgment, so Christ having been offered once to bear the sins of many, will appear a second time not to deal with sin but to save those who are eagerly waiting for him."

Lesson Ten: God will remember our sins no more. We can never be more justified in God's eyes than we are now. God has dealt with the consequences of sin through the sinless death of Christ. In response, we are called to hold to Christ unswervingly. We are to encourage each other in fellowship and spur each other on to do good deeds. Hebrews 10:36, "For you have need of endurance, so that when you have done the will of God you may receive what is promised."

Lesson Eleven: It is impossible to please God without faith. We have faith that He exists and that He rewards those who seek Him. Faith does not guarantee a life of blessings. Some people receive blessings from God for faithfulness in this life. Others get killed; live in caves; are considered outcasts. God has purposes for each of us, but one thing is certain: He is just. He will right all wrongs in eternity. Hebrews 11:1, "Now faith is the assurance of things hoped for, the conviction of things not seen."

Lesson Twelve: Embrace discipline as our friend. We have a race to run. Don't ask the question is it sinful? Ask- does it hinder my ability to run my best race? Sanctification is a process that is 100% the work of the Holy Spirit in us. And 100% our striving to be trained well for the race. Without holiness we will not see God. We receive an unshakable kingdom, we must be thankful and worship God with reverence and awe. Hebrews 12:1-2, "Therefore since we are surrounded by so great a cloud of witnesses, let us lay aside every weight and the sin which clings so closely, and let us run with endurance the race that is set before us, looking to Jesus the founder and perfecter of our faith, who for the joy set before Him endured the cross, despising the shame and is now seated at the right hand of the throne of God."

Lesson Thirteen: Show love to strangers and fellow Christians. Be submissive to authority. Flee sexual immorality. Shun greed. Hebrews 13:5, "Keep your life free from the love of money, and be content with what you have, for He has said, 'I will never leave you nor forsake you.'"

Application to my life: Hebrews was a much needed wake up call for me. Apathy in the Christian life had set in. Sins that I used to battle against were creeping in and taking up residence in my heart. Weeds were overtaking the garden. The book was a glass of ice cold water in my face as I fell asleep. I thank God for it.

The message of Hebrews is to not drift; hold on tight; fight; run the race hard and steady; go to war each day; strive for the things of God each day. My applications were two things:

One- a renewed commitment to spend time with the Lord at a set time each morning. Reading His word; keeping journals of prayers for a transformed life; my kids; and the clients God has entrusted to me. I have made a commitment to memorize a verse of Scripture every day. How great would it be to have 365 verses of Scripture stored away in the heart each year? And over 3000 verses in the course of 10 years?

Two- redeeming the time at the end of the day. I had fell into a pattern of retreat from 6pm-9pm (watching TV; wanting time to myself, etc...) instead of investing that time in my kids. So my renewed focus to redeem that time engaging with my family and taking a no/low technology pledge during those hours.

Resources if you want to study Hebrews:

Hebrews for Everyone by N.T. Wright: quick overview of the book.

The Letter to the Hebrews (Pillar Commentary Series) by Peter O'Brien: worth the effort; readable in depth study of Hebrews.

John Piper Sermon Series on Hebrews: 52 sermons; typical Piper- outstanding and Christ centered; no fluff.

For the glory of Christ,

Ashley Hodge

Quotes

I'm a lover of quotes. Here are a few that I wrote down this week while studying the book of Hebrews and some other quotes I have pondered recently.

John Calvin: In each of our hearts are the seeds of insanity. Our will is carried away by some sort of insane impulse to rebel against God... even though we know rebellion leads to despair and death. And obedience leads to peace and life.

CS Lewis: Those who claim Jesus knows nothing of weakness make a ridiculous claim. Those who give in to temptation after 5 minutes of struggle against it know nothing about temptation. Only those who struggle day after day in the face of temptation and yet do not give in... those are the ones who know fully about weakness and temptation. We have a high priest who identifies with our struggles.

From the Stewardship Bible: In the old covenant, the people of God offered sacrifices and tithes in anticipation of something greater. Under the new covenant, we give and sacrifice to God in response to the fulfillment of that promise.

Henry David Thoreau: Most men live lives of quiet desperation. I have chosen to live deliberately.

Also I think about this scene from the movie the Book of Eli. To me it differentiates the mindset of someone who believes God's goodness is dependent on circumstances versus a person of faith who believes God is always good despite circumstances.

There is a gun battle between Carnegie (an evil leader of a town) and his men versus Eli/Solara (the heroes in the movie).

Eli (Denzel Washington) is seriously wounded. Carnegie comes up to him and is about to finish him off.

Carnegie: "God is good, isn't He?" (sarcasm)
Eli: "All the time."
Carnegie: "Not all the time" (as he shoots Eli and leaves him for dead)

I thought about that scene as I read Romans 8:35-39:

Who shall separate us from the love of Christ? Shall tribulation, distress, persecution, famine, nakedness, danger or sword? As it is written, "For your sake we are being killed all the day long; we are regarded as sheep to be slaughtered." No, in all these things we are more than conquerors through Him who loved us. For I am sure that neither death nor life, nor angels nor rulers, nor things present nor things to come, nor powers, nor height nor depth, nor anything else in all creation, will be able to separate us from the love of God in Christ Jesus our Lord.

What an encouraging word! No trial or amount of suffering in this world can take from us the promise of God's Presence and God's Place- Heaven/the new Jeru (city)Salem (of peace).

For God's Glory,

Ashley Hodge

Conversations

I'm blessed to have relationships with many godly men and women as clients, friends and mentors. Here are some snippets of things going through my mind lately- most of which had been gleaned from conversations with these people.

Marriage/relationship advice: don't read books on your needs or love languages which tend to focus your mind on how your spouse is falling short in those areas. Instead, concentrate on loving God and how your relationship with your spouse or friend is an outpouring of your desire to serve God.

Drifting: The dangers in the Christian life are not usually the sinful behaviors we know are wrong and repentant about- lust, pride, greed, deceit, selfishness. The chief danger in the Christian life is usually related to drifting away. Hebrews 2:1, "We must pay careful attention, therefore to what we have heard, so that we do not drift away." Good things in life become idols- basketball, golf, the pursuit of money, family, vacations, friendships. These things must always be viewed as resources to honor Christ and not ultimate pursuits.

Contentment: the mature person is grateful every day. Much of the world spends their time, money and energy pursuing clean water and food. Anyone reading this is blessed beyond measure and needs to be reminded daily how merciful God is to us. We deserve God's wrath. He has poured out mercy upon us. We are called to be a funnel for His mercy. A comical reminder that we live in an amazing time.

Fundamentals: we never outgrow the need to practice the fundamentals of the Christian faith. Every day we must stay on the path towards God- prayer; studying the Word; encouraging each other with truth; serving others. Without the daily practice of these disciplines we drift. Psalms 1:1-2, "Blessed is the man who does not walk in the counsel of the wicked or stand in the way of sinners or sit in the seat of mockers. But his delight is in the law of the Lord, and on His law he meditates day and night."

Without this meditation, we start by walking in the counsel of the wicked. Then we stand and stay awhile. The final progression is pitching our tent near Sodom and sitting down with the mockers. Only a holding on to Jesus daily will prevent our hearts from growing cold and finding comfort in the pleasures of sin.

Fix Your Thoughts on Jesus,

Ashley Hodge

Random Thoughts

I'm thankful to live in a country that enjoys a great deal of freedom and prosperity. I'm grateful for the sacrifices that many have made to make the United States a great nation. I realize that there is a tension between freedom and entitlements. The further we move down the road towards entitlements- government funded health care; government funded education; government funded retirement, etc... the less freedom we will enjoy. I am praying for our nation and hopeful that better days lie ahead.

I recently watched the "Book of Eli". Very violent film with bad language. But the faithfulness to a message of preserving the Word of God at all costs was inspiring. I thought Denzel Washington did an excellent job as Eli- a man who felt the Holy Spirit was guiding him to an unknown place to deliver the last Holy Bible remaining on Earth in a post-apocalyptic world. Definitely made me meditate on how important it is to treasure and memorize the Word of God.

Some books that I have been working on lately:

Genesis: Beginning and Blessings by Kent Hughes- highly recommend this book for anyone wanting to study a book of the Bible that is integral to the Christian faith. The book is a commentary on all 50 chapters of Genesis but the chapters are usually less than 10 pages so it makes for a good devotional each day.

Hole in the Gospel by Richard Stearns- Stearns is the President of World Vision. He calls Christians to demonstrate the hope of the gospel in practical ways to a hurting world. This book came highly recommended by two of clients who I respect immensely. So I felt God was trying to get my attention to read it.

Some advice that I have been gleaning from the plethora of investment articles and conference calls that I have been listening to:

Emerging market stocks and high quality multinational stocks appear to have the most favorable risk/reward characteristics of the stock market- Jeremy Grantham

Deficits, debt and demographics are major headwinds for investment returns. An inflation spike is probable in the next 10 years due to the need to devalue our debt problems as a nation. Buy the inflation protection now while it is cheap to buy (TIPs; commodities; shorting long-term treasuries)- Rob Arnott

Concentrate on stock, bond and real estate investments that pay consistent income and funds that have the flexibility to move between asset classes (absolute return funds); these type of investments do much better in the environment we are in. Steer clear of investments that depend on debt to grow- David Rosenberg

I'm thankful that Baylor survived the conference realignment discussions and continued as a member of the Big 12 (minus 2). I'm a basketball junkie and I have really enjoyed Baylor's ascent as a basketball program. Playing on television a lot is critical to Baylor being able to continue to recruit well. I'm looking forward to a fun basketball season as a Baylor fan this year with a nucleus of Quincy Acy, Lace Dunn, AJ Walton and incoming freshman- Perry Jones who many predict to be drafted in the top 3 picks in the NBA draft in 2011. Andy Katz has Baylor #4 in his preseason ESPN poll.

Perry has sick talent- one of my dreams is to be able to play basketball like the video attached to his name in my resurrected body in a restored Earth.

Finally, I thought this quote was good that I heard on the Dennis Prager show today while driving around lunch time. "The believer in God has to explain the problem of evil. The believer in atheism has to explain everything else."

For God's glory,

Ashley Hodge

Need for Simplicity

Ecclesiastes 7:29, "See, this alone I found, that God made man upright, but they have sought out many schemes."

We make our lives more complicated than they need be. I was thinking today about how many people are employed in jobs only because human nature is to crave complexity versus simplicity.

Take the Christian faith. One of favorite authors JC Ryle said, "I wish to be as broad as the Bible, neither less nor more." How much more effective would the Christian faith be if all Christians lived by this motto? Millions of dollars are wasted in arguing over areas of the faith that the Bible is not crystal clear on. Seminaries are constructed to defend these doctrinal differences. In a class that I took at a seminary, my professor joked when discussing the mode of baptism, "This is what we call a theological controversy. Or in other words, job security for guys like me."

The tax code is another example. If you were designing a tax system from scratch would you ever dream of it being 70,320 pages long? I was chosen at random a couple of years ago for a line-by-line audit of my full tax return. There were some questions during the audit that came up where my auditor was confused as to what the tax law was. And how could you not be? A tax code that started with 400 pages in 1913 is now 176 times more complex.

In health care, 40% of the money that goes into the system never comes out. The middle consumes it- administration. That makes no sense. It is estimated that we spend over $700 billion per year on excess administrative costs. It would cost less than $200 billion per year to cover all the uninsured.

As humans, we are naturally predisposed to make our lives complicated. It is part of our fallen nature. But one of our greatest needs is to seek simplicity daily. John Piper in a sermon that I watched online recently proclaimed, "We never outgrow our need to hear the gospel." It is a simple faith. Question #1 in the 1647 Westminster Confession: "what is the chief end of man? To know God and enjoy Him forever." We could spend our whole life asking God to help us fulfill this.

The cares and clutter of life will consume us and render us ineffective if we allow it. I have some practical steps for simplifying life.

1. Time with God as the first priority of every day. Read and meditate on His word. Write down God's promises to you and commit them to memory. Keep a prayer journal where you record requests and answers to prayer.

2. In your work, focus on doing a few things well. Recently, I have kept a list of 4-5 things that I want to accomplish that day. Eliminate or decrease distractions. Set aside an hour each day to return phone calls and emails. Crave simple focus. Don't multitask. My wife- Amy- and I were watching a PBS program about the ineffectiveness of multitasking. The program showed the declining academic results at Ivy League schools because so many kids are using smartphones or laptops to surf the internet during lectures. Retention suffers dramatically when we don't give a task our full attention.

3. Set aside a few hours each day for relationships. Whether it is connecting with friends, family, neighbors or acquaintances, strive to give undivided attention to the relationships that you value. For me, 6pm- 8pm is this time daily.

4. Purge, purge, purge. Purge things out of your life every day. Possessions that are choking up space in your home need to be given away. Make it your motto in everything you do to find the simplest way to live. Don't sign up for activities that you don't value greatly. Don't be afraid to say "no". The good is the enemy to the great.

5. Simplify your health- being healthy usually comes down to 3 things: eating good foods but in less quantity; exercising 5 hours per week; and managing stress well by getting the proper amount of rest and keeping short accounts with God and others. Romans 12:18, "If possible, so far as it depends on you, live peaceably with all." Romans 12 is a simple approach to the Christian faith. It wouldn't be a bad idea to read these verses every day for a month so that they are imprinted on the mind and heart.

As always I preach to myself first.

For the simple life and faith,

Ashley Hodge

Ed Young Jr Follow-Up

Around four years ago I wrote some blogs about Ed Young Jr. of Fellowship Church in Grapevine, Texas. I questioned the transparency and financial ethics that were taking place in the leadership of the church.

Those blog posts can be found below:

http://stewardshipmandate.blogspot.com/2006/01/tale-of-two-pastors.html

http://stewardshipmandate.blogspot.com/2006/05/how-now-shall-we-give.html

This past week, I noticed some activity in the comment section of that first blog. I figured something was up. A friend informed me that WFAA- the ABC affiliate in Dallas/Fort Worth had run an investigative piece on Ed Young Jr concerning his luxurious lifestyle.

The video and article of that piece can be viewed here.

I take no joy in having insight or discernment on this issue. My commitment is to pray for Ed and the ministry of Fellowship Church and that others will not be lead astray by the false idols of prosperity and luxury. I believe many people have come to a conversion experience with Christ through Fellowship Church and I rejoice in that.

My concern is that what is taking place with the prosperity gospel crowd is potentially going to jeopardize tax-favored status for the majority of minsters of the gospel who are not earning large sums of money and who are laboring for the advancement of the kingdom of Christ.

Let's be serious here. Million dollar pastoral salaries; $240k per year "parsonage" allowances to buy and support expensive homes; using $8 million private jets purchased with church funds to travel and take personal vacations; dressing in the finest designer clothes; and undergoing elective plastic surgery are all viewed by most ordinary folks with disdain.

It would not shock me if tax exempt status for religious organizations is removed or revamped as a result. There are plenty of voices pushing for it already and stories like this give those voices ample ammunition. As the government looks for ways to increase revenue to pay for large deficits, ministries like Ed Young's that are allegedly using tax-exempt status to line pockets with wealth become easy prey.

Praying for an outcome that glorifies God,

Ashley Hodge

Review of The Road to Prosperity

I just finished a book that had been recommended in one of my financial advisory trade magazines. The book The Road to Prosperity by Patrick Toomey lays out a succinct plan to grow the American economy. Toomey has a sharp business mind and could be a strong voice for reform on the national political scene. He was a Republican Congressman in Pennsylvania 1999-2005. From 2005-2009 he has been the President of the Club for Growth. He plans on running for Senate in Pennsylvania in 2010 in a Democrat leaning territory but currently holds a 4-6 percentage point lead over the Democratic candidate- either Arlen Specter or Joe Sestak.

The Road to Prosperity lays out four principles for a prosperous economic future:

1. Property Rights- Ownership is the Foundation of Markets

Clearly defined rules in regards to property ownership is the trademark of a free, prosperous economy. Property is defined as real property (land, buildings, houses), personal property (movable goods- cars, boats, planes, clothes, money) and intellectual property (songs, books, software, trademarks).

The evidence is overwhelming that a respect for personal property rights has led to prosperity in the past. And a lack of respect for property rights (communism and dictatorships) has led to economic distress.

As governments limit involvement in property to defining and protecting ownership, prosperity is the end result. As governments increase their role in defining how property should be used/confiscated for the "common good", prosperity is threatened.

2. Markets Work- Let Them

Austrian economist Fredrik Hayek called the elitist belief that government can manipulate the marketplace for the good of the people "the fatal conceit." Regulation has its proper role and place. We need police to keep the peace and act as a deterrent to evil minded criminals. But as Adam Smith wrote in the Wealth of Nations, it is the pursuit of self-interest, voluntary exchange, specialization and division of labor that promotes economic prosperity.

Too much regulation leads to the law of unintended consequences. For example, high minimum wage laws can lead to higher unemployment. Government subsidized prices can lead to lower prices for consumers in the short run, but in the long run usually results in an ineffective allocation of resources and taxpayer bailouts of industries that cannot produce profits without government help.

Free markets undergo periods of creative destruction. Old, archaic industries that no longer meet consumer needs die over time- plain old telephone service, watches, newspapers. New, innovative industries emerge- mobile/wireless communication. Resources move to areas of the economy that are more productive. Government interference in this process sustains failing industries longer than needed and obstructs the efficiency of free markets.

3. Taxes and Spending- The Lower the Better

If you tax something, you get less of it. There have been articles in the past year about the folly of states raising income taxes and then watching their high income earners move to other states. Walter Wriston, "Capital goes to where it is welcomed and stays where it is well treated."

Corporations don't really pay taxes- they just collect taxes from the consumer and pass it along to the government. This is terribly inefficient- US corporations pay one of the highest tax rates in the world. We are taxed in many complicated ways, but the taxes that discourage productive work are the worst. Higher income taxes and capital gains taxes make work less attractive than leisure to the higher income tax brackets.

The evidence has long supported that the wealthy pay more tax when marginal tax rates are lower. The larger problem is that government is way too fat and bloated. Toomey says this is due to two factors. One, concentrated benefits beat dispersed burdens. Second, the seen trumps the unseen. Governments claim that they create jobs and help people but the reality is that they redistribute wealth and hinder the private sector in the process with many unnecessary burdens. In other words, every job that the government "creates" comes at the cost of higher taxes on the private sector which is always the engine of true job growth.

4. Stable Money

Money should serve three purposes. First, as a unit of measure. Second, a medium of exchange. Third, a store of value over time. Therefore, money performs well when the value is stable and predictable. Since this is the primary function of money, government policy should be consistent with promoting stability. But this has not been the case. The problem according to Toomey has been the mandate from Congress to the Fed to promote maximum employment, stable prices and moderate long-term interest rates.

By trying to accomplish the goal of maximum employment, the Fed has sacrificed stable prices and moderate interest rates. The negative, unintended consequence of trying to maintain full employment has led to credit bubbles, devaluation of the currency and inflation. Inflation destablizes money and is therefore bad for the economy.

Toomey believes that the Fed should focus solely on a stable currency. In the long run, this will be better for employment and moderate interest rates.

The rest of the book discusses some of the problems with government spending; tax policy; the advantages of free trade and some solutions for economic reform- flat tax; social security reform and school vouchers.

I found it interesting that Toomey blames government manipulation and Fed policy for the crisis in 2008. Much has been written about the "evils" of capitalism in creating the crisis. And how government spending/intervention has helped to "save" capitalism from implosion. Just like the saying in foxholes there are no atheists. In times of crisis, there are no capitalists only Keynesians that believe government needs to step in and save the day.

I agree with most of Toomey's conclusions. Less government and taxes is better. The Fed should concentrate on stable monetary policy only. Property rights should be protected and treasured. Free markets need to be promoted absent government manipulation.

My problems with these libertarian views is that the Bible makes it clear that the unregenerate heart of man is wicked. In a world free from sin, libertarian views work. The problem with allowing every one to pursue their own self-interest is that some enjoy the thrill of power that comes from oppressing others. Of course the argument can be made that the heart is equally wicked in the hands of a "noble" government administrator and a cold-hearted, power hungry capitalist.

Incentives matter. It seems that the role of government should be to encourage stewardship and productivity in its citizens. If policies were formulated with these questions in mind, we would all be better off:

1. What policies would encourage/incentivize the maximization of money, abilities, time and health in our citizens?

2. What tax and spending policies would encourage productivity and less reliance on government for the future?

What is discouraging about the current attitudes in government is that there is less respect for property rights; more taxes and government expansion in the economy; more regulation for the markets and an unstable monetary policy that will lead to high inflation.

We are headed the wrong direction and need a revolution towards less reliance on government and more reliance on the only One who can provide for all of our needs.

For God's Glory,

Ashley Hodge

Notes from Important Conferences

In the last 30 days, I had the privilege to attend some good conferences. Here are some of my notes/thoughts from those events.

Generous Giving Conference- Austin, TX 10/22-10/24

Generous Giving is an organization that exists to promote joyful giving among Christians. There were many inspirational stories of believers who were challenged to be radically generous and obedient to God's calling with the resources that God had entrusted to them. Here are some of my thoughts from this conference:

Stanley Tam- 94 year old businessman from Ohio.

He signed a legal contract early in his life that God was the owner of his business- US Plastics. God has chosen to prosper this business. Stanley took a moderate income from the business as a salary and turned over the vast majority of profits to fund the works of Christian ministry. The business has given over $120 million to works of Christ.

My key takeaway here was that when God spoke to Stanley, Stanley obeyed. His driving passion is evangelism and everything in his life is oriented towards this end.

There are some terrific videos on his life/testimony that are worth the investment of time to watch here.

Chip Ingram-pastor of a church in California. Link to his media ministry.

He gave two excellent talks. One on being surrendered to God. The other on the genius of generosity. On being surrendered to God, he walked through three case studies about people who had a specific knowledge/expertise. Each of these three had stumbled upon a treasure that was worth infinitely more than the asking price. One involved rare coins. The second was an original Picasso painting. And the third was Jesus' parable of hidden treasure.

In each case study, the person who discovered the hidden treasure was required to sell everything they had to acquire the treasure. In each case, the reward was far greater than the cost.

Chip used the life of Stanley Tam as an example of what should be the normal Christian experience. We are offered a choice to trade stuff that doesn't last/satisfy for treasures that last forever. This is not weird or fanatical as society views it. It is just smart. It is rational.

Chip's talk on the genius of generosity highlighted the generosity staircase using the Christmas story as an example. It is easiest to be generous with money (Magi). It is harder to be generous with our time (Shepherds). Even harder to be generous with our reputation (Joseph). Harder still to be generous with our future (Mary). Next our life (Jesus). And finally our most precious possession (God- The Father).

Ingram emphasized that as the cost went up in each of these areas on the generosity staircase, the rewards and intimacy went up as well.

Allianz Investors Conference- Newport Beach, California 11/11-11/13

I was excited about attending this conference because I have invested money for clients with PIMCO (manages close to $1 trillion for investors the majority of which is in bonds) for many years and some of their top minds were presenters- including Paul McCulley, Bill Gross and Rob Arnott.

Here are some short notes that I jotted down from the presentations of those three speakers.

Paul McCulley- Managing Director/Portfolio Manager

Paul spoke on the New Normal. Some bullet points:

• A Depression is off the table. The economy was in cardiac arrest last year but government programs kept the patient alive. The patient was sick from double bubbles (property and leverage). Too much debt on too much property declining in value too fast.
  
• Government injected socialism in our economy and it worked in the short-term. Just as there are no atheists in foxholes... there are no capitalists in financial meltdowns.
  
• McCulley expressed his fondness for the economic theories of Hyman Minsky who promoted a financial instability hypothesis. Human nature has a tendency to go off the rails every 40 years or so.
  
• Minsky believed there were three types of financial borrowers in the marketplace. First, the hedge buyer (traditional fixed rate mortgages- 20% down; fixed rate; ability to pay back loan). Second, the speculative buyer (little money down; interest only loan; ability to pay interest but not principal). Third, the ponzi buyer (no money down; betting heavily that values go up or will default on loan).
  
• The crisis was a result of too many speculative and ponzi buyers/lenders before the meltdown. 20 million Americans have negative equity in their homes currently. McCulley compared it to an underage drinking party with Moody's and S&P handing out fake ids (these two agencies were giving "safe" ratings to loan paper that was extremely risky).
• The housing and auto industries are shrinking. These sectors were fueled by home equity loans in the past. US consumers still have the will to be hedonistic but not the wallet or access to credit.
  
• McCulley saw three main issues in the economy: 1. Wealth effect is a headwind not a tailwind currently. 2. Unemployment rate will be slow to come down. 3. Lack of demand going forward as the household sector spends extended time in the Betty Ford clinic for balance sheet rehabilitation.
  
• McCulley predicts the next 10 years will bring returns in these neighborhoods for investors: bonds (3-6% annual); US stocks (6-8% annual); emerging market stocks (8-11%).
  

Bill Gross- Founder and co-CIO

He didn't give a presentation, but he did speak to a group of advisors for about 30 minutes on the PIMCO trading floor at the end of trading. A couple of brief notes on his comments:

• The FED is going to keep interest rates near zero until the economy shows sustained growth above 4% for GDP for at least 18 months. This is likely to fuel prices that are artificially high in many markets- stocks, real estate, bonds, commodities. But this is by design as policy makers desire to reflate the economy.
  
• Priorities should be: job creation, job creation, job creation. Some large incentive programs to become the leaders in clean energy, education and health care for the world.
  
• Global imbalances are still large. We have income that equals 56% of GDP. Our consumption is 72% of GDP. The difference is made up by government borrowing. This needs to come into balance.
  

Rob Arnott- PIMCO investment manager; Chairman of Research Affiliates, LLC

• Bonds have outperformed stocks from 1968-2009. When you have heard that stocks are always the best long-term asset to own, it usually comes from a post 1980- pre 2000 mindset.
  
• The discount (cheapness) of value stocks relative to growth stocks is near the largest in history- exceeded by the end of the tech bubble in late 1999-early 2000.
  
• Deflation is the issue for the next 12-18 months. Government programs like the homebuyer incentive program actually work to keep CPI low because they remove renters from the marketplace which is a key component of how the CPI (Consumer Price Index) is calculated.
  
• Large inflation is coming to our economy. Total debt is 5 times GDP and this historically has never ended smooth.
  
• Three options on our national debt issues: 1. Pay down the debt slowly over 20 years. This is politically unpopular because it involves sacrifices, less entitlements, etc... Those are the things that politicians don't give up easily. 2. Quit paying our debt- we owe Japanese, Chinese and other countries a good portion of our debt. We could just default. This is not a good solution because it leads to wars- military and trade. 3. Use the printing press to allow inflation to run. If we have $70 trillion total debt, we can allow it to be only $35 trillion if inflation doubles over the next 10 years.
  
• Arnott is betting that #3 is our path- the most painless way out of the mess. He was asked what areas of fixed income would perform the best and he responded favorably to Treasury Inflation Protection bonds and floating income bonds because they do a good job of passing through inflation.
  

Please keep in mind that this is in no way meant to be specific investment advice. Seek counsel from your trusted advisers for advice pertaining to your individual situation.

For God's Glory,

Ashley Hodge

New Every Morning

Lamentations 3:22-23: "Because of the Lord's great love we are not consumed, for His compassions never fail. They are new every morning; great is Your faithfulness."

I have been studying the book of Romans for the past few months trying to memorize a few passages in the book along the way. Romans 6:12-14, "Let not sin therefore reign in your mortal body to make you obey its passions. Do not present your members to sin as instruments for unrighteousness, but present yourselves to God as those who have been brought from death to life, and your members to God as instruments for righteousness. For sin will have no dominion over you, since you are not under law but under grace."

Each day presents a new opportunity to put to death sin in our lives which wreaks havoc on relationships and distorts our minds and hearts. Each day is an opportunity to desire God and His healing ways.

If you are reading this blog, I would encourage you to dwell on the truth that you have been released from the prison of sin if you have submitted your will to Christ. You may have committed horrible sins consistently for many years. If you have, you are no different than me. Those habits are deeply entrenched in your heart and to depart from them is going to seem unnatural.

But if you are in Christ, you are a new creation. You are no longer a slave to sin. You have the Spirit in you that enables you to overcome all kinds of hardship and struggles. Today is a new day to live as a slave to righteousness and not sin.

Martin Luther said about the internal struggle with sin, "You cannot keep the birds from flying around your head. But you can prevent them from building a nest in your hair."

Let us choose:

• stewardship over waste
• growth over apathy
• freedom over slavery
• faith over fear
• generosity over greed
• purity over lust
• patience over anger
• love over callousness

For the freedom that only comes from living in peace with God through Christ,

Ashley Hodge

Two ideas for a better economy

I love progress. I believe it is God's plan to reform, redeem and renovate this fallen world. Imagine a world that is ruled by a perfectly just and merciful King. Imagine a place where there is no sin. This world awaits the Christian when God's kingdom comes to earth as it is in heaven.

I recently read a book that made some predictions about the years ahead- Future Files by Richard Watson. A lot of thought provoking ideas in the book. Here are two that caught my attention in regards to structuring a better economy.

Elimination of paper and coin currency

This idea could gain some traction in a difficult economic environment. Here are some reasons that paper and coin currency could become an antiquated idea going forward:

1. There is an estimated $2- $2.5 trillion in unreported income in the United States each year. Much of this income comes in the form of cash payments which are hard to track. With $500 billion plus in tax revenues each year not being collected due to tax fraud, the government has a large incentive to eliminate cash and set up a system that is more transparent.

2. Cash is dirty. CNN recently reported that 90% of cash had traces of cocaine on it. With fears of global pandemics like the swine flu, cash and coins may be voted out of existence for "health" reasons.

3. Counterfeit problem: I recently took a trip to San Diego and bought a soda at a convenience store. I only had a $100 bill. The clerk scanned the bill to verify its authenticity. I asked him if he only did that for $100? He said that he does it for all bills over $20. He told me that he had received over 5 counterfeit bills in the last 30 days. Right now, it is a small problem with less than $100 million of counterfeit money in circulation. But as computer printing continues to advance, it becomes easier for criminals to circulate fake money.

4. Cost of printing money and producing coins would be saved. This is probably a low figure in the grand scheme of things- under $100 million per year. But that $100 million could be allocated towards grid and internet security.

Reform the tax system with a flat tax

1. The cost to run and regulate the tax system according to Watson is 10-20% of total revenue received. The federal government takes in around in around $2.5 trillion in revenues. $1.1 trillion of that is federal income tax. The other $1.4 trillion is corporate, fica and excise taxes. This does not include all of the state and local taxes that we pay. A flat (or fair) tax of around 20% would reduce a large amount of expense (around $250-$500 billion annually) that is inefficiently spent on managing a complex tax system.

2. The idea that lower tax rates leads to more tax revenue and stronger economic growth is controversial in academic circles. But the evidence historically supports tax cuts producing higher tax revenue/growth. Arthur Laffer presented a theory that there is an optimal tax rate for an economy. If you cut taxes too much, you don't have enough money to fund the things that citizens view important- national defense, social service programs, etc... If you raise taxes too much, you disincentivize earning profit and therefore tax revenues fall.

3. Make all government worker income tax-free. It makes no sense at all for the government to pay workers and declare the income as taxable. And then take back a percentage of it in taxes which just adds to the costs of maintaining our tax system. 8% of all jobs are government jobs. Why not just pay these people in tax-free income at a lower rate than require them to give a portion back to the government that they work for?

God has made us simple. We have sought out our own complexity. I'm sure there are some holes in these ideas. But I am prayerful that common sense will prevail and that the economic difficulties of today will lead to better policies and ideas for tomorrow.

Watson had a great quote at the end of his book, "It is safer and lazier to be pessimist. Optimism takes work. It requires commitment, energy and ideas."

Excited about the future because I know Who controls the future,

Ashley Hodge

Topics on the mind

Heard a thought provoking sermon by Robert Morris at Gateway Church yesterday. He's doing a series called "Overwhelmed by Grace." Yesterday, he brought up the point that the decision of Adam and Eve in the Garden of Eden wasn't a choice between evil and good. It was a choice between life and death.

The tree of life in the Garden represented choosing obedience to God and submitting to His ways so that we may have life. The tree of knowledge (of good and evil) represented choosing death- rejecting the ways of God. Scriptures started coming to me as I thought about this.

Exodus 20:12, "Honor your father and mother, that your days may be long..."

Deuteronomy 6:24, "The Lord commanded us to do these statutes, to fear the Lord our God, for our good always, that He might preserve us alive..."

John 10:10, "The thief comes only to steal and kill and destroy. I came that they have life and have it abundantly."

John 11:25, "Jesus said to her, 'I am the resurrection and the life. Whoever believes in me, though he die, yet shall he live.'"

I am sure these verses only scratch a tiny surface of what God is trying to teach us about death and life. This was a helpful mind shift in thinking about warfare against sin in terms of choosing life versus death. God is good and wants to give us life. Stewardship/obedience is just choosing the paths of life instead of destruction.

For example, when we have harmony in relationships, we have more peace and less stress. This leads to better health and longer life. By choosing reconciliation over strife, we are following God's plan to give us life over death. By making wise choices in terms of our health habits (exercise/eating/ rest), we are choosing life over death. Doing business honestly leads to less conflict and greater trust. This is a less stressful path and one that leads to life versus death.

Naturally, we are all on a path towards physical death due to the effects of one man's disobedience. But thanks to the grace of God, those who choose to follow Christ are on a path of life even though our physical bodies are dying. 2 Corinthians 4:16, "So we do not lose heart. Though our outer nature is wasting away, our inner nature is being renewed day by day."

One of the most important scriptures to grasp is Romans 5:17: "If, because of one man's trespass, death reigned through that one man, much more will those who receive the abundance of grace and the free gift of righteousness reign in life through the one man Jesus Christ."

Health Care Costs

This Fall is likely to be an explosive time in the debate for health care reform. My wife has endured many health struggles in the last five years so this is a topic I have been following with interest and empathy.

I hope that whatever compromise is made... that the result is not a government controlled single payer system. I'm all in favor of monarchy/one person making the decisions for the masses. But I don't want that until Christ is the King. The lesson of history is that centralized power is bad for people. It would be okay if the leaders/rulers were men and women above reproach in all circumstances with the interest of the people always the primary concern. There are certainly many leaders who fit this description, but unfortunately not enough to make government control the utopian answer.

Some good resources to point out if you are interested in digging into the facts of health care reform:

Rusty Leonard of Stewardship Partners has a frightening chart of government medicare projected costs versus actual costs. You can find the chart on page 4 of his quarterly newsletter.
Government projections are usually rosier than the reality. A government run health care system is likely to put a burden in terms of taxation and strain on future economic growth that will hinder our economy for decades to come.

Mark Perry- economics professor- keeps up a blog called Carpe Diem that has some thought provoking entries on how to deliver effective health care without bankrupting the country in the process.

Finally, the Congressional Budget Office has some good resources on their website concerning the projection of health care costs.

There is no doubt that reform needs to take place. My personal preference is go the route of automobile insurance. Costs under $5000- $10,000 per year are covered out of pocket with some tax incentives (HSA accounts) to cover those expenses. Over $10k per year, there should be insurance for citizens of the United States even if that cost has to be subsidized by states or the federal government.

We also need incentives to line up correctly to control costs- focus on reducing obesity; early detection of cancer and heart disease. I wrote a blog entry on this topic in more detail last year.

Crazy Love by Francis Chan

If you are looking for a quick read, I highly recommend Crazy Love by Francis Chan. He set up a website with short video chapter previews to give you an overview of what the book is about. The book was recommended by a client/friend. It has really challenged me and re-motivated me to live with purpose.

For The Promises of God's Presence and Kingdom,

Ashley Hodge

Honing your skills

Traditional retirement planning focuses on these areas:

*Setting an expected date to retire
*Managing risk with investment assets to fund retirement
*Income projection from assets, pensions and social security

One neglected area of planning is honing your skills and abilities. A friend of mine who is also a financial advisor sent me a link to a Barron's article: Next, The Retirement Bubble

The article expresses some thoughts that I have been blogging about for a while- although in harsher terms. The idea of retirement that is so prevalent in American thinking is pure fantasy for most people working today. And that is not a bad thing.

The biblical model is clearly a model of productivity for the Lord as long as there is breath in your lungs and blood pumping to your heart. Jesus expressed this in John 9:4, "We must work the works of Him who sent Me while it is day; night is coming, when no one can work." This life on earth is day. Death is night. The works of God can mean many different things and it may not always be income generating.

But the truth is that most people are living longer. And assets are in decline overall due to the financial crises of the last nine years. Society cannot afford to pay people income for thirty plus years while they are not contributing to the growth of the economy.

If the trend continues, our economy will be in shambles. We would have a vicious cycle of large population blocks of active voters insisting on social security and medicare benefits that stay at the current levels or better. This would lead to unsustainable tax increases. That would lead to a sluggish economy and taxpayers fleeing the United States for economies that offer lower taxes and greater growth prospects.

The good news is that many forward thinkers on these issues believe that this outcome will be avoided. For example, the authors of The Fourth Turning- Strauss and Howe- believe that history is cyclical (a view I do not share entirely). In their view, the current crisis was caused by a 20-year cycle that was highlighted by apathy and addiction to leisure. This led to unsustainable levels of debt and a financial crisis.

Strauss and Howe believe that the next cycle will be one that values hard work and a return to productivity. This will lead to another cycle of prosperity down the road.

So what is the point of all this? Like the author of the article in Barron's, I believe that we are facing a reality that most people are going to dramatically rethink the idea of retirement. I promote the strategy of never retiring to a life of leisure to anyone who will listen. I believe it is a less stressful, more fulfilling life.

But I agree with the article that most people should consider a 3-5 year sabbatical instead of traditional retirement. And this is where honing your skills comes in. We should be on a constant path of personal growth. The economy rewards flexibility and adaptation to change.

What this means to me is that I need to constantly hone my skills as a financial advisor so that I am at the top of profession in terms of knowledge and wisdom. But it also means having a diverse enough set of skills so that if Congress passed a law tomorrow that was devastating to the financial planning profession, I would be able to transition into another productive career within a short period of time.

The idea that you work for a company for 30 years and retire at age 55 into a life of leisure for 40 years is dead. It was never a healthy thing. Pray for God to reveal your gifts. Use those gifts for God-glorifying productive work. If you have recently lost a job or you are facing the dread of an uncertain future, stay encouraged.

If you are in Christ, you have the power of the Holy Spirit in you. You have innovation, courage and perseverance at your disposal. Here are a few resources that can help you hone your skills and work towards a position of greater financial flexibility so that your time will be freed up to spend as God directs.

For He who began a good work in you will bring it to completion at the day you meet Christ,

Ashley Hodge

Freedom

There is something better than freedom. Don't get me wrong. I love freedom. I cherish it every day.

Freedom is not to be taken for granted. The fact that I can write this blog; invest my time today in the activities I choose; worship Christ freely; and pursue a career that I desire are all results of God's grace and the blood and sacrifices of those who came before me.

I was discussing the topic of freedom with my five year old boy yesterday. He asked me the question, "Did Jesus die on the cross for the devil, too?" Five-year olds ask the most complicated questions... I explained to him in the simplest way that I knew how that God granted all humans and angels free will.

Some angels chose to serve God. Some angels wanted to be like God and would not submit to His authority. The fates of these spirits have now been forever sealed. The angels are with God ministering to the needs of His people and are going to be with Him in the Kingdom of Heaven forever. The fallen angels (Satan and demons) are in constant warfare with the purposes of God and are doomed to darkness.

Freedom has a season and then our fates are sealed. Our time on earth is a time of freedom. Some people enjoy more freedoms than others. But all people have the freedom to respond to the revelation of God through creation and Christ. This life is a time of choosing. After death, our fates are sealed like the angels/demons.

Augustine called this the fourfold state of the will:

1. Pre-Fall Man (Adam/Eve in the Garden of Eden)

They were granted the power to sin and the power not to sin.

2. Post-Fall Man (All of humankind in a depraved state in need of a Redeemer)

Since the fall, we have the power to sin and we are unable to avoid sin.

3. Reborn Man (those who trust in Christ and are given the unlimited power of the Holy Spirit)

The reborn man is restored to the state of Adam and Eve. We have the power to sin and the power not to sin.

4. Glorified Man (After death, believers are sealed like the angels to a state of eternal obedience to Christ)

The glorified man is in a state of being able to sin and unable to sin.

To many people there is no worse idea in the world than to lose their freedom. Sadly, these people are often the ones who refuse to submit to God's authority. I was listening to a Francis Chan sermon this week. He recounted something J Vernon McGee said, "This is God's universe and He does whatever He wants. You can do whatever you want... when you get your own universe."

I thank God for freedom. But I especially thank God that one day I will no longer be free to sin and choose to rebel against Him. This is the most precious of gifts. Because His ways are always better than mine.

For His Glory,


Ashley Hodge

Refocusing on Stewardship Priorities

I feel like I have been wandering in the wildnerness lately- unfocused in terms of following the stewardship mandate that I acknowledge as truth. I read something by JC Ryle- my favorite author- this morning that struck a chord with me.

Ryle says, "Our hearts are like the earth on which we tread; let it alone, and it is sure to bear weeds." What a truth! Daily connection to Christ and the purposes that He has for us are essential for our growth. John Calvin said in the Institutes of the Christian Religion, "Man's nature is a perpetual factory of idols."

We fill our hearts and time with stuff. For me lately, it has been too many temporal pursuits and not enough focus on the eternal. But I am re-calibrating. Hopefully, some of these thoughts will be an encouragement for you to do the same or carry on in the path of biblical stewardship.

My four focus areas of stewardship are: money, abilities, time and health (MATH). Here are some thoughts on how to glorify God in the use of these resources.

1. Organizing your time and day

I have been guilty of living a reactionary life for the last year. This is not good for many reasons because growth is stunted. My new resolve is to block my time in this fashion each day:

5am- 8am: Spiritual growth (Bible study, prayer, reading); Fitness (cross fit training; basketball; weights)

8am- 1pm: focus on one task and doing it well. It might be reviewing client accounts; reading something important for my business; scheduling appointments; seeing two clients face-to-face.

The point is to have 4-5 hours where you are not constantly distracted by returning phone calls; checking email 15 times and aimlessly browsing the web or watching media.

1pm- 6pm: similar focus of one task.

This may include studying something in-depth; anything related to performing my calling more effectively would qualify in these time blocks.

6pm- 10pm (and weekends): family/relationships/projects

Invest time in my wife, kids and friends- constantly winning over their hearts. Improving our home or the organization of treasures (photos/ journals/memories).

2. Healthy habits

I love the way I feel when I am living in a disciplined way. Eating a calorie-restricted diet of whole foods; breaking addictions to certain foods/sodas; having a gameplan for exercise that includes improvement in strength and endurance.

3. Managing/eliminating distractions

Meditate on the rewards for living a life of stewardship. Focus the mind on the promises of God for becoming a better manager of money, ability, time and health. Realize that Christians are promised not only Heaven when we die physically. But we are called to redeem this fallen world with the authority and purposes of God. There is no time for waste in any form.

Here are a few passages of Scripture to encourage us to keep our minds on the rewards of faithfulness to God:

Philippians 3:13-16, "...But one thing I do: forgetting what lies behind and straining forward to what lies ahead, I press on toward the goal for the prize of the upward call of God in Christ Jesus. Let those of us who are mature think this way, and if in anything you think otherwise, God will reveal that also to you. Only let us hold true to what we have attained."

2 Corinthians 4:16-18, "So we do not lose heart. Though our outer nature is wasting away, our inner nature is being renewed day by day. For this slight and momentary afflication is preparing for us an eternal weight of glory beyond all comparison, as we look not to the things that are seen but to the things that are unseen. For the things that are seen are transient, but the things that are unseen are eternal."

I Peter 5:6-11, "Humble yourselves, therefore, under the mighty hand of God so that at the proper time He may exalt you, casting all of your anxieties on Him, because He cares for you. Be sober-minded; be watchful. Your adversary the devil prowls around like a roaring lion, seeking someone to devour. Resist him, firm in your faith, knowing that the same kinds of suffering are being experienced by your brotherhood throughout the world. And after you have suffered a little while, the God of all grace, who has called you to His eternal glory in Christ, will Himself restore, confirm, strengthen, and establish you. To Him be the dominion forever and ever. Amen."

Living under the rule of One King,

Ashley Hodge

Favorite Websites/Blogs

Here are some blogs/websites that I frequent relating to the stewardship of money/investing.

1. Carpe Diem: Economist Mark Perry gravitates towards the optimistic side of things. I like that. Chris Davis of Davis Advisors said a few years ago, "You sound smarter when you are pessimistic but history has tended to reward optimists."

2. Infectious Greed: Paul Kedrosky links articles of interest that relate to investing/managing money.

3. Hussman Funds: John Hussman gives excellent weekly commentary on his view of investing. He has compiled an impressive track record of conservative growth in a difficult decade to be a growth investor.

4. Greg Mankiw: Harvard professor's economics blog.

Less frequent posts, but I enjoy reading their commentary:

5. GMO: Led by Jeremy Grantham. This firm has compiled a good track record predicting asset class returns for 7-10 year periods.

6. Crestmont Research: Ed Easterling's research on stock market cycles.

7. Stewardship Partners: Rusty Leonard's quarterly newsletter highlighting his view of world markets and biblical stewardship principles.

It is a tough time economically. The future is always a mixture of difficulty and opportunity. No one sees the future clearly except our Lord. But wise counsel always helps in understanding some of the risks and possibilities of what the future has in store.

For God's Glory,

Ashley Hodge

Creation Care

Like anyone interested in stewardship, I consider caring for creation to be a top priority. I despise littering. I don't like waste. There is something fundamentally wrong with walking along a beautiful stretch of beach in the morning and seeing cigarette butts, soda cans and beer bottles all over the place.

Or visiting a national park and finding plastic bags and trash everywhere I look. When I see these things, I long for Heaven and a day when things will be continually cared for. There will be no more littering. No more spoiling God's beautiful creation.

The environmentalists would have us believe that as the planet grows wealthier, we are in greater danger of seeing our planet implode. They would argue that economic progress is environmental destruction. What say you evidence?

Mark Perry- an economic professor at the University of Michigan- has a blog called Carpe Diem that I read regularly. Today, he came out with some great charts and EPA based evidence that would indicate our environment is getting healthier as the population grows and people prosper.

http://mjperry.blogspot.com/2009/04/earth-day-2009-air-qualitys-better-than.html#links

Here is a good editorial piece in the NY Times that argues: the richer we become on Earth, the greener our planet will be.

http://www.nytimes.com/2009/04/21/science/earth/21tier.html?_r=2&ref=science

Finally an editorial in Investment Business Daily that urges us to have a day to honor capitalism for being responsible for a better Earth.

http://www.ibdeditorials.com/IBDArticles.aspx?id=325207473659451

This evidence fits perfectly with what I understand the Bible to reveal about stewardship and progress. We are not called as believers to re-pristination as many environmentalists would desire. Re-pristination is a belief that the Garden of Eden is ideal. We should shun technology, consumption, material blessings and live a life of austere simplicity.

But the Bible teaches something different. Genesis 1:28, "God said to them, 'Be fruitful and multiply; fill the earth and subdue it; have dominion over the fish of the sea, birds of the air, and every living thing that moves on the earth.'"

We are to improve on God's good Creation by using technology and resources in a way that improves life for all of God's creatures. The Bible starts with mankind in a Garden in Genesis and ends with mankind in a City in Revelation- Heaven or the New Jerusalem.

There has to be incentives and regulation that encourage good stewardship of the environment. But don't discount technological improvements as the basis for why this planet is not teetering on the edge of environmental disaster.

Looking Forward to a Perfect Planet One Day,

Ashley Hodge

Reflections on 40

I'm a reflective guy. Tomorrow I turn 40. The number 40 has a great deal of biblical significance. The number symbolizes a long period of time. There are many examples in Scripture: 40 days Noah was in the Ark; 40 years Israel wandered in the wilderness; Jesus was tempted in the wildnerness by Satan for 40 days, etc...

My prayer is that I have at least 40 more years left. I hope that the next 40 years are my best years for service to God and usefulness to my fellow journeyers.

Today I am reflecting on the lessons that I have learned in my previous 40 years. And how these lessons can help the years ahead be more fruitful.

1. The sweeter the sin, the bitter the taste in my mouth.

It's a line from a U2 song. It is true. Unfortunately, I have tried most of the sins that there are to try. The ones I haven't tried, I have thought about. The result is momentary pleasure and lifelong regret. Proverbs 14:12, "There is a way that seems right to a man, but its end is the way of death."

I have discovered that you can establish a good reputation and have a wicked heart. A line from a study in Romans has stuck with me the past month: Reputation is what people think about you. Character is what God knows about you. I need to always elevate the pursuit of godly character. Reputation will take care of itself.

2. Pursuing God has to be active.

God seeks us. The Bible makes this clear in many places. But feelings have to be trained. Those who wake up early to exercise know that many days the body tells us that we are crazy. If the body could speak, it would say, "Sleep in, this is insane. Why do you torture me this early?" But our minds know that many benefits come from exercise: endorphin rush, better health, less aches and pains in the long run, longevity, etc...

Wanting to spend time with God- at least for me- comes and goes in waves. There are many days I don't feel like praying. Many days I don't feel like opening up the Bible to receive daily nourishment. Many times where I struggle through a spiritually rich book. But my mind knows that James 4:8 is true, "Draw near to God, and He will draw near to you." I have discovered that we need a battle plan for growing closer to God rooted in prayer and study.

3. Stewardship is the path

I know that I was created for a purpose: to glorify God. I know that my soul and body will be resurrected to a destination: Heaven or Hell. I know that I deserve Hell because I have a sinful heart. Sinning comes easy. I know that Heaven is an unmerited gift of God's redeeming grace available only through the cross of Christ.

Overwhelmed by God's mercy, I know that stewardship of all that God has entrusted to us is the right path. I fall of this path so quickly. I have an enemy who wants me off the path of faithful stewardship. Because it is where the power of authentic faith lies. When we manage money, ability, time and health with a purpose of building God's kingdom, our lives have influence and power.

I know these things to be true. I pray that the next 40+ years are spent in faithful application of these truths.

4. Every discipline affects every discipline

I think I first heard this on a self-help tape. I have found this to be true. When we are disciplined in our spiritual lives, we tend to be more disciplined with health. When we are disciplined in these areas, we tend to be more disciplined with our tongue. Those disciplines lead to further discipline with money.

The chapter in the Bible that most speaks to me is Hebrews 12. Hebrews 12:11, "For the moment all discipline seems painful rather than pleasant, but later it yields the peaceful fruit of righteousness for those who have been trained by it."

There are many other lessons, but these stick out today. Birthdays are a time for reflection and an opportunity for renewal. Thank God for new opportunities and new chances.

Forgetting what lies behind and straining forward to what lies ahead, I press on toward the goal for the prize of the upward call of God in Christ Jesus- Philippians 3:13-14.

Life begins anew at 40,

Ashley Hodge