Thank you, Dr Wong for sharing with us. Let’s kick start with the first question on financial management. Why is it so important to have good management of money?
We all know that money is not everything but everything needs money. If you look at the Scriptures there are a lot of passages about money and possession. In fact, there are more quotations, verses that deal with money and possessions than prayer and faith. So God knows that we are going to have problems with money. And if we don’t manage our money adequately well, we will have problems with all the other areas of our life.
Some people talk about the six areas of life: finance and career, family and home, physical and health, mental and educational, spiritual and ethical, community and service. But all these other areas, if you are not adequately successful in your money management, or do not have enough money, all these other areas will be affected.
You can’t even look after your physical and health. Medicine costs money, supplement costs money, good food, nutritious food costs money. Spiritual and ethical: how can you be contributing to the development of your church and your community of faith when you have got no money? Relationships need money. So everything needs money.
However, we must not make money the focus of our life, rather, we must have enough skills and ability to have enough money so that we have a total and complete life.
That is why we need to ensure that people, especially the younger generation have something to work with because money management is not very often taught in schools and the universities. Many of us learned it the hard way. We made mistakes, we lost money. That is not a good way to learn.
It is good that we can actually undergird our financial knowledge through a process of learning from others. That is why I think it is very important that the young people, the young working adults, the college students establish some grounding before they even come out to work – why they need to learn about money management and how money works.
We all know that we are not of the world, but we are still in the world. And the world is driven by money. So we cannot escape this aspect of our life on earth.
What are some potential problems or pitfalls that people might fall into when they have poor financial management?
When we don’t understand how money works, we take unnecessary risks, to the extent that we do not know we are taking risks. For example, the risk-reward ratio, there is no such thing as ‘high return, low risk’.
I notice nowadays, because there is this need to earn more money, everyone strives to get more money. They get into entrapped situations or businesses like the pyramid schemes, Ponzi schemes, which they don’t recognize.
If we understand how money works, we can avoid. At least we are alerted to these pitfalls. In the marriage vow, the couples say, ‘till death do us part’. Nowadays it is ‘till debt do us part’. I think money problems are one of the greatest contributors to divorces. When you have money issues, it creates all sorts of emotional, physical conflict within the family, between husband and wife. The Bible advises us, teaches us that we must provide for our family. If we do not provide for our family, we are worst than heathen. We have to learn some of these things.
The other thing is that if we do not learn this early enough, when we come to old age, we realize suddenly we are in a situation where we do not want to be. When you are 65, 75 years old, you do not want to come to a state where you have to take a drastic drop to your quality of life or standard of living. You want to be at least able to maintain it.
But that doesn’t come just like that. You have to prepare in your early years to come to that situation whereby you know that you are fine, and you can continue to contribute towards our community, to help people who are in need, to contribute towards the welfare of the church.
These are some of the things that we have to avoid. These are the pitfalls. Otherwise you find that you are destitute when you get older. There are things that may jump at you. You may have illness; you may encounter an accident; you may make an investment decision that goes wrong. You must understand how money works in order to avoid these pitfalls.
What are some key guiding principles to a good financial management?
I think most of us recognize that there is a need to maintain our physical health, by having regular medical checkup, even for younger people. Companies do that now. They send their employees, their executives for annual medical checkup, to make sure that people are alright.
And what do we get after an annual medical checkup? We get a report showing the blood test, the x-ray the ECG, etc. Based on the report, we know where we stand physically.
Similarly, if you talk about financial health, we need a report. But we usually don’t. We who work in the marketplace know that the income statement and the statement of financial position, which used to be called the balance sheet are very important statements to evaluate the financial health of a company or a business. Why are we not doing it for ourselves?
At minimum, we must start to prepare those statements for ourselves. Because without those statements, we do not know how we are doing. We need to record it; we need to measure it.
Once you know how you are doing then the next step is, ‘are you happy with where you are?’ If you’re not, then the next question is, ‘how do you move to the next stage?’ That is when you need to set financial goals, career goals, and business goals. Then you need to know how to arrive at those goals.
However, we should not only learn from worldly knowledge alone. We are in the world, which operates with certain rules and environment that we must be aware of. The Bible asks us to be as wise as serpent and harmless as dove. We also must know what the Bible says about money so that we combine worldly knowledge with biblical knowledge in the management of our financial health.
Actually, personal financial management or any financial management is not that difficult. There are only four main areas that we have to pay attention to. One of course is income, how much you are making. It is the same for a person or a business or company, and for the nation as well. Two, expenses – how much are you spending? If your income is less than your spending, you are in trouble; this is common sense. The third area you have to look at is your assets. What assets, short-term and long-term do you have? And the fourth thing is your liabilities.
The ideal situation is when we know where we are; we know where we want to go. Then we set financial goals; we are motivated to do the things that need to be done to achieve those financial goals.
If you manage each of these four elements adequately, you should be alright. It is not difficult. Each of these four elements are related to one another. Your financial health is dependent on these four elements, and your financial statement reflects these four elements. It is actually quite simple.
What are some key biblical principles that are important for us as Christians to anchor ourselves in, the right perspective that you actually mentioned?
There are two realities we need to be discerning: one is of consumerism. The whole world is a consumptive environment. Industries are built up by encouraging you to consume. In marketing and advertisement, everything and everyone are asking us to consume. Not surprisingly, we are attracted by this consumptive behavior.
However, the more we consume, the more we forget to live sparingly. I think it was Mother Theresa who said, ‘live simply so that others may simply live.’ However, our lifestyle has encouraged us to consume more and more, better and better, bigger and bigger, sometimes to a ridiculous extent.
If you are staying in a small apartment in Singapore or Hong Kong, Why do you need a 60-inch Smart TV? You can’t see it without keeping a distance. But people consume as to keep their aspirations. If they buy a Prada handbag, they feel good. But they don’t need a Prada handbag! So that is the danger. That is the thing we have to look out for.
It has gone way overboard and economies are driven by consumerism. That is why in China people are encouraged to consume more, similarly in Japan.
The other thing we have to look out for is debt, borrowing money. The bible doesn’t say that it is a sin to borrow money, but the bible warns us about the danger of borrowing money and the most famous one is “the borrower is slave to the lender” (Proverbs 22:7).
Now anyone who has borrowed money, either from a bank or a loan shark or any other source, you would know that you are a slave to the vendor the moment you default. The moment you fail to make one payment as of it, you can see how much you are a slave to the vendor. The vendor has all the powers over you and you have none. So I think these two are the main danger.
Lastly, don’t be so focused on just making money. John Wesley has this famous saying, “Earn all you can, Save all you can, Give all you can”.
“Earn all you can” doesn’t mean you do anything to earn money. There is nothing wrong with making money. God has given us the intelligence, the creativity, the ability to make money. But we must make money righteously, without offending God, without offending men. Earn our money the righteous way.
Now, “Save all you can” doesn’t mean that you hoard. There is a big difference between being stingy, miserly, and frugality. “Save all you can” simply means you set limits, boundaries to your lifestyle. Even as your income increases and improve, you have set limits on your lifestyle.
If a Honda Accord is good enough, it is good enough. You don’t need to go to a Mercedes 500. Because there is no end to spending. I read in the news media that there is a prince in the Middle East, who bought an A380 as a private jet. He has a concert hall, private quarters and a swimming pool in the private jet. Does he need it? No. But people don’t set limits. They keep extending the boundaries of their consumption.
‘Save all you can’ means you set boundaries, not hoarding. Because when you hoard, being miserly or stingy, you are without love. A miserly person has no love. So, earn all you can, save all you can. Why? So that we can give all we can.
The purpose of earning, saving, is to give, not to hoard. And if we look after our money well, year-by-year, we should be able to give more and more to those who don’t have, to our community, to extend the kingdom of God. Those are some biblical principles that we need to put into our hearts and live it out.
What’s your advice to young people? How should they start? what are the areas that they should be aware of? Or look into in the context of the consumerism that you said, in the context of the different needs that we have, how can they navigate themselves to have a long term plan?
The first thing that they have to acquire is understanding: how money works in the world and what the bible says about money, about life. It is not in the amount of possessions that we have. It is how we lead our lives. And we have to live our lives to honor God.
The problem is that we are all motivated by success. We want to seem to be successful. But what is success? And typically the world look at success based on money and possession. I like the quotation from Southern Hills, “success is knowing the will of God and doing it”.
Young people have to recognize that we can be successful in the world but not successful in God’s eyes. There was a very rich tycoon in Malaysia who spoke at one of our Full Gospel Businessmen banquet and he said that, ‘people consider me to be a successful Christian businessman. Successful businessman, maybe; successful Christian – I’m still working on it.’
Our journey as a Christian in this world is far from easy. We are struggling every day. So bear in mind that the world’s system with its structure is an environment that is not friendly to us. In order to be successful in God’s eye, we need to:
- know who we are in His kingdom.
- depend on God to live our lives on earth.
- know His will for our lives and seek to do it.
Then we will be successful. What the bible says, “you cannot serve God and mammon” is absolutely right. Because you physically cannot. Jesus doesn’t say you should not or you must not, He says you cannot serve both God and mammon.
If we are serving mammon, we can’t be serving God; our goal is to serve God. And I believe if you serve God, even in our work and businesses, you don’t focus on making the money, but we focus on serving God and serving people, loving God and loving people. When we do that in our businesses, the money will come. Look at what the service industry is telling us, it is the same thing in a different context.
So I think that for young people, the first thing is to acquire knowledge, secondly is to apply biblical principles in their life. Peter Wagner says this, ‘be it considered our jobs and our businesses to be our ministry’, because there is now this move to change our worldview that ‘the church is not within the four walls’. The church is out there. The church is Monday to Friday and not just Sunday. And he says this, ‘ our job becomes a ministry or our businesses become a ministry when we take the voice of God and the anointing of God and apply biblical principles as we work’, then your work becomes ministry. You don’t have to be a full-time worker. Your job and your business is a ministry, and we all have to look at it that way. We are all ministers Monday to Sunday, every day of our lives, especially Monday to Friday when we are interacting with people all the time.