Don’t panic, keep giving say financial experts
Rather than raising alarmist fears, the current financial crisis should remind us of the difference between "needs" and "wants" Christian financial experts advise.
Bill and Dolores Block watched with growing "consternation" as their investments dropped by 25 per cent in October. "A bit of panic," is how Bill describes his feelings as their fund dwindled. The retired couple draws from their investment annually to supplement their pension income.
"How much lower could it go?" Bill asked himself. He and his wife began to imagine what they would do in a worst-case scenario: sell their Winnipeg home and car and move into a small apartment?
It would mean "no garden, no outdoor backyard kind of joys," admits Bill, "but in terms of necessities that would not be panic city at all. We could do that."
How deeply the current market roller coaster will affect Canadians depends on how much money they have invested and how soon they need it, says Gary Hawton, CEO of Meritas Mutual Fund. "If they're retiring and relying on income from that portfolio starting in the next year, then the amount they're able to draw out will be considerably less."
Most world stockmarkets are down somewhere between 35 and 50 per cent on the year.
But don't start making coffee out of burnt toast as though it's another Great Depression, just yet.
"If you think back to the 1987 crash, it's very difficult to even pick that out now if you're looking at the markets over a hundred year span," says Hawton, "At the time it was by far the largest drop in the markets. But now it looks like just a little blip in an upward trend."
It took markets about two years to recover from both the 1987 crash and the 1997 Asian debt crisis, says Hawton.
Instead of cutting back on their giving to sustain their lifestyles, Hawton believes Christians need to put their "needs" in perspective.
"We are borrowing to buy a second house that we couldn't afford, borrowing to buy all kinds of things we don't need," says Hawton.
"You see churches doing expansion projects and all kinds of things when there are people who are living just down the road that, frankly, are starving physically.
God provides
"We need to recognize that at the end of the day God will provide for us. He will provide what we need—not necessarily what we want…. I think Christians can get caught up in the cycle of greed and wanting more when in fact I think we need less."
Dieter Kays, president of FaithLife Financial agrees. He encourages Christians to keep investing in a responsible way, to share the fruits of their labours with others and not to let "greed be the dominant motivator driving us."
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