Eleven Two Fund Management - Financial Planning from a Biblical Perspective

Thomas G. Cloud Jr., president of Georgia-based Eleven Two Fund Management, uses Biblical principles in his work. According to the company website: "We hold people accountable to make wise financial decisions and have a Christ-like mind set that will give them a better chance to experience God's best for their life. This includes His peace, wisdom, joy, and contentment."

Thomas answered questions from Christian Counseling Services.

Some Christians are suffering with debt problems in the current recession. What general words of guidance can you offer them?

To answer this question, I would say two things. Number one would be for Christians to start by recognizing that being in debt and particularly carrying large amounts of debt is not a wise position to be in. Then, once they recognize this, much like the Christian life itself, is that once you recognize you are a sinner, you are ready and able to receive God’s grace. In the same situation here, once someone recognizes that debt is not a wise position to put themselves in, then I think their behavior is ready to change.

The second thing regarding debt that I would recommend is that, after they have recognized it is not a wise position to be in, to go ahead and have patience with it. If it’s a married couple, they need to get on board with each other and be 100 per cent committed to getting themselves out of debt. Then the next step is getting on a plan to get out of debt and trying not to take on any new debt.

One way to get yourself on a plan is to enroll in courses that constantly talk about debt. The Bible talks about renewing our minds, so maybe a person could sign up for a Dave Ramsey course and begin to follow some of those steps.

Then maybe they could take a Crown Financial course, constantly renewing their mind, constantly reminding themselves of their commitment to stay out of debt and maybe subscribing to some things on the internet - maybe a blog or maybe a financial eNewsletter like the one that I send out to my clients that constantly reminds them about the importance of not being in debt.

Do you recommend the use of debt consolidation companies?

I really don’t know that much about debt consolidation companies. If the premise is that you can take your debt and get a lower interest rate, I think it would be a wise idea, especially as an alternative to bankruptcy and if the interest rates are lower than what you see on credit cards, where the interest rates are above 10 per cent.

How should Christians approach the use of credit cards?

The way that we have decided in our family, meaning my wife and I, is not to use credit cards. That’s tough advice to give though, because the Bible says it is the wicked who borrow and do not repay.

The Bible does not say the wicked simply borrow. So because of the high interest rates on credit cards and the typical uses that people use credit cards for, they live above their means with them to buy things that they really don’t need.

I would say my recommendation would be to tear up your credit cards and never use one again for the rest of your life. If you need to have some sort of an electronic way of using a card then you can get a check card through your bank and it will have the security protected through MasterCard or Visa, just like a credit card, but it will only be a check card - every time you spend the money it will come directly out of your checking account, rather than putting you and your family into debt and therefore leading to a whole chain of events that Satan can use to devour your family spiritually.

Please tell me a little bit about yourself and your company.

My firm is a company that specializes in doing financial planning from a Biblical perspective and we also manage money for people.

I have spent my time for the last 10 to 15 years studying investments and reading about investments. I do that every day and I have the resources and the time to get my clients into investments that they wouldn’t normally know about and they wouldn’t normally put themselves in. Therefore I can help my clients’ money to grow better than they could if they were doing it themselves.

The other thing that I’m really good at doing is walking through a family and helping them to accomplish their goals in a tax-efficient manner. We do tax planning for families and help them to reduce their taxes in a legal, ethical and moral way.

We also do insurance planning. I used to sell insurance but I don’t any more. Now our firm is a fee-only financial planning and investment advisory firm. However, because of my experience in the insurance market, I am able to help my clients save money on insurance and also get the right amount without having any vested interest or conflicts of interest on the amount of insurance that they purchase.

My firm is independent. I am not pressured or have any kind of quotas to sell a certain type of mutual fund or sell a certain type of insurance or sell a certain amount of financial advice. We are totally independent and we get paid just by our clients. So these are the things that we do.

One thing in addition that makes our firm unique, which is the Number One thing that makes our firm different from most other financial advisory firms, is that thanks to God and His Son Jesus we have a different perspective. We have a Christian or Biblical world view and we try to encourage people to apply those principles to their finances. Then we begin to see God’s peace in their life. We also use Biblical principles to pick out stocks for people. It’s a very small amount that we are able to manage.

We are still accepting clients who want to stay invested in the U.S. stock market. However, they want to be in stocks that will perform better than the overall general market and so we’re able to do that as well. People who are interested in learning more about our individual stock managing portfolio that we’ve been doing for about six years can go onto our website or drop me an email and I can get them some information on that.

Even through this recent market downturn of 2008 we’ve been able to have an average annualized return of over 13 per cent over the past six years managing individual stocks, which is kind of unique and different.

Christians are charged with being separate from the culture around us but also being salt and light. Do you have any thoughts about how this might apply in the financial sphere?

Yes I do. Alex and I practice it in our own life. My wife goes out into playgroups with children and meets with women that she went to college with or she talks with women when she takes my daughters to different activities like dance.

What happens is other people will begin talking about taking out second loans to redo their kitchen. They might mention buying a nice car and start talking about how they bought that car on a loan and start bragging about their interest rate. So what we do and what we respond with is we just talk about our own situation. We don’t brag about it but we say, well, our cars aren’t that new, but we don’t have a payment on them.

You know, I try to talk to some of my friends that are kind of driven and competitive and they will talk about their home loans and that type of thing. So I’ve been telling my friends that my wife and I took out a 15-year loan when we moved into our home and so I’ve noticed that two or three of my friends have changed their mortgages to 15-year mortgages. So what we want to do is try to influence people to do the things that God wants them to do and try to flip the whole cultural thing on it.

Let’s try to make it the norm to follow God’s principles and therefore be out of debt instead of trying to get in the rat race here.

The more confident you are, and the more content you are with your own life, and people can see that I think that the truth that you speak and the deeds in your life will be that much more of a challenge to them and to your own self to keep doing God’s principles, while Satan is telling everyone around us to get more into debt so that he can control you and he can also devour you spiritually.

Can you say a little about the challenges of being a Christian and working in the financial world?

I do reduce my fees for pastors and widows and missionaries. I have been doing that for years. I reduce my fees a substantial amount for widows and pastors. That can be as much as 25 or 33 per cent of my normal fees or more. It can sometimes be 50 per cent, depending on the situation.

So we do try to follow God’s teachings and the way that we try to help the widow and the orphan in need is by dramatically reducing our fees. We also want to help support God’s kingdom and the spreading of His word and His truth by dramatically reducing our fees for missionaries. So yes, we do that and we have been doing that now for more than five years.

Thomas, thank you very much.

April 29th, 2009

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