Saturday, March 14, 2009

Money and spititual growth

There's been quite a discussion recently on the UU ministers chat list about what to do about taxes. Some of what I wrote on the chat applies to a wider audience than just ministers, so I decided to revise it and post it here.

At this time of year, people are thinking about taxes. Some people choose to use a computer program, such as Turbo Tax. My spouse, an Enrolled Agent who has been doing taxes for nearly 30 years, reports that Turbo Tax can work, but many people have trouble with it and find it takes them a long time to use. You may also not find all the deductions you are due.

Another option is to seek professional help. One minister shared her experience of finding a financial professional who not only does her taxes but also provides advice on investments and retirement planning. She has found that over the long haul using a professional she trusts has saved her lots of money--as well as providing peace of mind in dealing with her finances.

The difference between doing it yourself and working with a professional is kind of like doing religion on your own, finding resources online to deepen your spirituality, or out in nature, or in books. For some people, this works well and serves their needs. It's probably cheaper--and may be less time consuming--than being part of a group. However, there's nothing like working with a group facilitated by a professional religious leader.

In case you think I'm stretching the point by relating taxes to religion, some of my clergy friends and other clergy clients call my spouse, their "money minister."

Something else was said on the chat that I take issue with. A minister praised her financial professional for doing business on a "fee for service" basis and implied that anyone who operated on commission might not give as good advice or support.

My spouse gets paid in three different ways:
1. fee for service
2. percent of assets under management
3. commission

The choice of which way to pay is determined by the client, the size of the account, the type of transaction. Financial professionals, like my spouse, who provide a broad range of services offer the same advice and support to all clients, no matter which way they pay.

Some financial planners, however, do not handle investments themselves. They only offer advice. so they would have nothing to charge a commission on. Some of them have the attitude that this makes them better than those who handle investments directly. Sometimes, however, in order for them to make enough money to stay in business, they have to charge fairly high upfront fees. If you don't have a lot to invest, you might be better off with a reputable financial professional who works on commission.

Sometimes, when people start working with my spouse, they have fairly small accounts and pay commissions. Then as their accounts grow they switch to percent of assets under management. Sometimes people come to her for advice only--on a fee for service basis--for instance to ask her to evaluate their current investments in terms of social responsibility or for retirement planning. Sometimes people come to her for tax planning and advice, also on a fee for service basis, but do not have her do their taxes. She also provides advice and sets up mortgages and equity loans, and life insurance policies. These services are only available on commission. It all depends on what you want, need, and have.

To find a financial professional, like my spouse, who is knowledgeable about socially responsible investing, check out Green America's (formerly Coop America) National Green Pages.
In the drop down menus, look for "Financial Consultants: Advisors and Planners."

Here's our website, in case you want to check out what my spouse does.

If you have a financial advisor or money manager for your congregation or organization funds, then chances are they are paid on percent of assets under management. If you are not already working with a socially responsible investment professional, you might want to check this list (and the Money Manager list) and compare fees and services. We have been surprised to learn that many banks and managers charge a higher percent than independent financial consultants who often offer a greater range of services and have important tools to help you invest your money is ways that are consistent with your organizations's mission.

In terms of your personal finances, I suggest you keep an open mind. Interview several professionals (like church shopping) and get a sense of who they are and how they work. Talk to their other clients. Pay attention to their reputation in the community. Find someone you are comfortable talking with. Money gets us into some pretty deep places and it's good to have someone you can trust to work with.

Our money lives are in many ways as important as our spiritual lives, especially in these difficult economic times. Getting into right relations with money can be an important part of spiritual growth. Blessings on the journey.

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