The Bible and Your Finances
This month PCNAK wants to introduce Finney Jacob Cherian, the CEO and President of Millennium India Acquisition Company (MIAO). MIAO is a publicly traded private equity fund on the American Stock Exchange (ticker symbol: MQC). Their business acquires major high growth companies in India, brings them to the United States, and lists them on a U.S. stock exchange. This provides U.S. investors an investment vehicle to take advantage of the tremendous economic boom taking place in India, and it provides the Indian companies tens of millions of dollars for higher growth.

Prior to becoming CEO and President of Millennium India Acquisition Company, Finney was a Partner at Computer Sciences Corporation (CSC)--a $16 billion, 90,000 employee, Fortune 500 firm. Before CSC, he was a Director at KPMG LLP, and prior to KPMG he worked many years in Wall Street at JP Morgan & Company. In addition, he was also an Adjunct Professor of Finance at St. John’s University (the largest Catholic University in the U.S) for 10 years.

In the following interview, Finney shares his thoughts and advice on various finance-related topics.

What does the Bible say about finances/money management?
The Bible says a great deal about finances, money management and giving - all from a point of serving the greater good. If you look at the Old Testament, you will see that Abraham, Isaac, Jacob, Joseph, David, Solomon, and Job (just to name a few) were fabulously wealthy. The book of Proverbs speaks a great deal about money matters, practical money management and tithing. When you come to the New Testament, Jesus speaks about money as often as he does about the Kingdom of God. Apostle Paul especially talks a great deal about money and giving.

The verse “the love of money is the root of all evil” has been quoted and mis-quoted and used for many selfish and self-serving purposes by Christians. Wealth and gaining wealth is a mindset. The Bible says that as a “man thinketh so is he.” You are what you think, and you become what you think about most.

Also, tithing and giving has been used and mis-used by churches and tele-evangelists, to the point thar Christians have no idea what to believe. Therefore, it is critical that Christians really understand the Biblical view of money matters and not simply accept someone else’s interpretation of passages.

What are a few key financial principles/behaviors that people of any age should live by and practice?
Never overextend too much in terms of credit card debt and do not live too beyond your means just to keep up with the Joneses. If the current total balance on your credit cards cannot be paid off in 3 payment cycles (or if you are just paying the minimum amount), do not charge anything further on your cards until the balance is paid off (unless it’s critically important). I read recently that credit card companies are sending credit cards to first year college students, and they are racking up thousands of dollars of debt with no means to pay it off. They end up defaulting on payments which will ruin their credit even before they ever get out of school (I will talk about the importance of credit further down). Remember credit card debts will not allow you to achieve financial freedom. Also, just keep one or two or a maximum of three credit cards, this will allow you to manage them a lot better and gives you more leeway with the credit card companies.

Secondly, always save. Indians are great savers, and 401K plans or an IRA is a great vehicle for savings.

Is it wise for parents to involve or inform their kids when it comes to financial planning for the household?
For the most part, it is wise for parents to inform their children about money, the value of money and giving--especially giving. If done properly, you will have given your children a great gift for their future that will stay with them the rest of their life.

On the flip side, some “toxic parents” use money as a way to flex their muscles with their children, to show them whose boss, and to keep them under their thumb. They justify it by saying that they are teaching them discipline and obedience. If they really understood their actions, these parents would know that they are neither teaching them discipline nor obedience; instead, they are sowing the seeds for contention, rebellion and alienation. These kids will grow up with a twisted view of money and its uses.

What are some interesting ways of making young people more aware and knowledgeable about money management?
I would like to recommend two must reads for everyone. It will change your life as it has changed mine. The two books are: Think and Grow Rich by Napoleon Hill and The Secret by Rhonda Byrne.

What type of financial advice do you have for recent college graduates or current students many of whom will be dealing with loans, debt, and bills?
The one piece of advice I will give you is the importance of your credit rating. As a recent graduate from school with debts, student loans and looking for a job, the last thing on your mind is your credit rating. Please make this a priority that as soon as you find a job. Make all your payments on time even if it is just the minimum amount. You will see the importance of this as you go through life. Everything from the purchase of a car, applying for credit for home loans--even getting a job offer—will depend on your credit and what the credit agencies say about you. Most employers now conduct a background check prior to making a job offer which may include a routine look into your credit rating. Make this a priority.

What, if any, are financial pitfalls that are specific to newly-married couples? The number one reason for divorce in the U.S. is money. In many cases, newly married couples look at their parents and others who are established and think they need to have all the things that others have. When they attempt to obtain these things, they go into deep debt. They need to realize that others have accumulated those things (great house, great home furnishings, great cars, great exotic vacations) over a period of many years or over a lifetime. Accumulate nice things over a period of time as your wealth increases. I really think that if you paid cash as opposed to giving your credit card for purchases, you will think twice before forking over $500 dollars for a scarf.

Secondly, save to buy a home or a coop or a condo as soon as possible. This will make a tremendous impact on your tax savings. Making a great deal of money means nothing, if you have to give it all back through federal and state taxes. The only way to keep your wealth is by creating equity and save taxes in the U.S. through the purchase of a home. Home ownership is of utmost importance if you want to build wealth.

How important is investing? What types of investments should someone choose?
Investing is very important, but all investment does not need to be stock or equity investment. The best way to start investing is through the 401K. You must take advantage of this. If you are a college graduate and just got your first job and the company offers 401K plan, sign up for it on day one. It is that important.

In stock investment, the rule of thumb is diversification. Invest in stocks of multiple industries or sectors (some in financial services stocks, some in technology, some in the energy sector and some in overseas markets such as China and India through various growth funds offered by mutual funds). If you follow this rule, you will see great returns in the long run no matter what condition the market is in temporarily.

The best investment, though, is your first home because it will allow you to save money on your taxes. Home mortgage interest and tax deduction is your best defense against paying unreasonable tax rates. A home in a good neighborhood with an excellent school system will always be an investment (before you buy a home always check the rating of the school system).

The other investment you can make is in your self—through more education and certification. We are living in a knowledge society where how much you earn depends on how much you learn. There are career opportunities out there for young people in high school, and even more for college graduates. Do not get into the mindset that the only professions out there are medicine and law. There are some amazing off-the- beaten path career opportunities. Pray, do your research, and you will find the right choice for you.

Also, avoid all the “get rich quick” schemes. Follow this rule of thumb – if an investment seems too good to be true, it usually is.

What are your views and experiences regarding tithing?
Personally, I think this is the most important question. I believe that giving is a universal law that will take your life to amazing heights. Read Malachi (Chapter 3) or Proverbs or how Abraham gave 10% of his income or Apostle Paul’s letters and you’ll also see the importance. Giving is an infallible law in the universe. When you give, you will receive. If you want to be truly prosperous in every way, start giving early in your life. Your finances will be transformed to your own amazement! If you wait to have enough money before you give, you will never have enough. Remember that every thing that God created gives something – the sun gives light and heat, the plants and animals give us food, flowers give us beauty etc. Therefore, it is in God’s design that his noblest creation (made in his image) also gives.