Michelle Singletary is one of the most successful Christian columnists in the United States, and she uses her ever-growing platform to encourage readers to make financially sound decisions.
Michelle makes regular appearances on network TV morning shows, writes for major magazines, and has published three books on financial wellness. And somehow, in the middle of all of that, she managed to found a financial mentorship program at her church for people who need help in getting their finances in order.
Michelle will be one of the speakers at Pursuit 2015, so we thought it would be interesting to get a preview of the wisdom she will be sharing with the folks who will be at the conference. She had a lot of interesting things to say about dating and finances, overusing credit cards, ignoring bad financial advice, tithing, and working for companies like Amway.
1. If you could go back in time and give your 21-year-old self any financial advice, what would it be?
Michelle, this is your older self talking to you. Take risks with your investments. I know you are concerned about the gyrations in the stock market, but you have one of the best things going when it comes to investing: time. So don’t be too conservative in your investing style. Don’t be reckless. Just create a diversified portfolio with small cap, mid-cap and large cap stocks.
Here’s some perspective on my advice. When I was in my early 20s, our company began offering a 401 (k). They were very new back then, and I didn’t really understand it. So I asked a more mature co-worker who was probably about eight to 10 years out from retiring. He told me to be very conservative because the stock market is risky. He told me to invest in bonds. I didn’t know any better, so I did what he said. And I missed out on great gains during the next 10 years.
The lesson is that you have to invest for yourself — not based on what someone else is doing or his or her risk tolerance. At the time, I didn’t realize that I had years to weather the ups and downs of the market. I could afford to be more risky because I was so young. Now I know better.
2. How many credit cards are too many?
Technically, there isn’t a “too many” rule of thumb. But I ask folks why they need more than one or two cards. If you are paying off your credit card balance every month, you don’t need more than a few cards or just one card.
Now perhaps you have a lot of cards because you can only get approved for low credit card limits. That should tell you something right there. If you can’t qualify for more credit without multiple cards, you probably aren’t in a financial position to be charging so much.
Here’s something else to consider with credit cards: Avoid having outstanding credit card balances that exceed 30 percent. In other words, if you have a credit card with a $1,000 credit card limit, you don’t want to have more than $300 outstanding on your bill at any one time.
3. Do you think Christians should tithe off their net or their gross income?
When it comes to the question of whether you should tithe off your gross or net, I like what my pastor says: “Do you want a net or gross blessing?”
Of course you don’t tithe with the expectation that you’ll get something back, but it does say in Malachi 3:10, “’Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test,’ says the LORD of hosts, ‘if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need.’”
The problem with tithing on your net is: what net do you use? Do you base it on net after taxes or retirement savings or cost of health insurance and other benefits that are typically taken out of your paycheck? You get into murky water when you try to subtract what you earn from the things you think shouldn’t be included in your tithes.
So I tell folks to tithe on their gross pay or the gross of any funds they receive.
4. When you’re dating someone, what are some red flags that should tell you that you’re involved with a financially unstable person?
So often we think we should judge people on what they earn. But I recommend looking at a person’s financial values. Does the person believe in tithing? Is he miserly, which is far different than being frugal?
Look for indications that the person isn’t prepared to change to become a better financial steward. We all fall short of the things we should do, including being a good money manager. Or life gets in the way. You lose a job, or health issues cause a disruption income. Or perhaps the person was irresponsible at one point in his or her life.
We all make mistakes. The question is, how do we recover? Are we willing to change? Look for red flags that the person is a poor money manager and isn’t doing anything to change that behavior. If they are OK with paying bills late and lying to a creditor, that’s a red flag. If he spends more than he makes, that’s a red flag. If she’s a shopaholic and makes no apologies for it, that’s a red flag. Look for present behavior that suggests the person isn’t willing to do better with his or her money.
5. What advice do you have for someone who wants to get involved with a multilevel marketing company like Herbalife, Amway, Mary Kay or The Pampered Chef?
When someone wants to get involved with any business, but especially a multilevel marketing company, I ask them, “What’s your gifting?” These types of companies are really about selling and recruitment — selling products, but most importantly, recruiting others to join the enterprise. If you aren’t a salesperson, this isn’t a business area for you. If you don’t want to spend your career recruiting, this isn’t for you.
I can sell, but I don’t like sales. My gifting is teaching. So I found a way to bring in multiple streams of income by pursuing my gifts given to me by God. Follow your gifting and not pitches to be rich, and the money will come.
We look forward to hearing more from Michelle at Pursuit in July. In the video below, she gives us a sneak peek of what she’ll be talking about at the conference. Also check out her website at MichelleSingletary.com or on Twitter @SingletaryM.