ASi
ADVENTIST–LAY PERSONS
SERVICES & INDUSTRIES
Inter-American Division
13th International Convention
THEME:
BLESSED TO SERVE
Barcelo San Jose Palacio
Costa Rica
August 14-17, 2013
ASi
Inter-American Division
ADVENTIST –LAY PERSONS
SERVICES & INDUSTRIES
PRESENTATION TOPIC:
“PERSONAL & BUSINESS SURVIVAL
AFTER A FINANCIAL MELTOWN”
August 15 & 16, 2013.
PREPARED & PRESENTED BY:
WALDON B. WRIGHT, MBA, Bsc, Dip. Pharm
• TREASURER, EAST JAMAICA CONFERENCE OF SDA
• SEMINAR PRESENTER, LOCALLY & INTERNATIONALLY
• Married to Violet, Nursing educator; a union which
produced three (3) sons.
• FORMER:
– OFFICER IN CHARGE – BUSINESS LOANS & SPECIAL
PROJECTS, CHURCHES CREDIT UNION
– CORPORATE EXECUTIVE in the Finance Industry
– UNIVERSITY LECTURER
Prepared & presented by Waldon
Wright, MBA.
3
THOUGHT
• Don’t tell God how big the
financial storm is, tell the
financial storm how big God
is.
Prepared & presented by Waldon
Wright, MBA.
4
OVERVIEW OF PRESENTATION
1. Objectives
2. Deliverables
3. Questions for You
4. God’s desire for His People
5. Financial meltdown
6. Causes of Financial Meltdown
7. Aftermath Assessment
8. Survival Strategies
9 – 10. Summary and Conclusion
Prepared & presented by Waldon
Wright, MBA.
5
1. MAIN OBJECTIVES
i) To outline God’s desire for His people
including in financially challenging times
such as during and after a financial
meltdown
ii) To share with you on Financial
meltdown, its causes, and aftermath
assessment
iii) To share principles and strategies for
personal and business survival after a
financial meltdown.
Prepared & presented by Waldon
Wright, MBA.
6
2. DELIVERABLES
At the end of this presentation you should be able
to:
i) State God’s desire for His people
ii) Explain what is a financial meltdown and state at
least four causes of a financial meltdown
iii) Identify some of the effects of a financial
meltdown and name 4 countries affected
iv) Identify some things to consider in an aftermath
assessment
v) State at least four (4) things and strategies that
you can implement to help you and or your
business survive after a financial meltdown.
Prepared & presented by Waldon
Wright, MBA.
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3. QUESTIONS FOR YOU
i) Do you believe that God designed and predestined financial
meltdown to punish some of His people and their businesses
with unemployment, loss of assets, and poverty?
ii) Do you believe that bad things happen only to bad people and
good things happen only to good people?
iii) How do you think that your response has affected your present
situation in life today?
Prepared & presented by Waldon
Wright, MBA.
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4.
GOD’S DESIRE FOR HIS PEOPLE
i) What doesthe Bible say is God’s desire for His people?
a) Prosperity –Prosper and be in health (3 John 2, Mal. 3:10; Jer.
29:11)
b) Peace -(Psalm 119:165)
ii) Is God’s good desire for His people and their business automatic
or conditional? See Deut. 30: 9-10.
Prepared & presented by Waldon
Wright, MBA.
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4.
GOD’S DESIRE FOR HIS PEOPLE
ii) Is God’s desire for his people and their business automatic or
conditional? Read below Deut. 30: 9-10.
9And
the LORD thy God will make thee plenteous in every
work of thine hand, in the fruit of thy body, and in the fruit
of thy cattle, and in the fruit of thy land, for good: for the
LORD will again rejoice over thee for good, as he rejoiced
over thy fathers:
10If thou shalt hearken unto the voice of the LORD thy God,
to keep his commandments and his statutes which are
written in this book of the law, and if thou turn unto the
LORD thy God with all thine heart, and with all thy soul.”
Prepared & presented by Waldon
Wright, MBA.
10
5. FINANCIAL MELTDOWN
What is a financial meltdown?
1. “Refers to events like steep fall in stock
markets, decline in asset values,
corporate losses etc. that hurt the
economy and lead to losses
for investors.”
http://financialdictionary.thefreedictionary.com
Prepared & presented by Waldon
Wright, MBA.
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5. FINANCIAL MELTDOWN
What is a financial meltdown?
2.“A financial meltdown refers to a
malfunction, breakdown, failure or
collapse of a national or international
monetary, banking and/or credit system.
The results are economic instability,
chaos, turbulence or collapse.”
http://www.financialmeltdown.com
Prepared & presented by Waldon
Wright, MBA.
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5. FINANCIAL MELTDOWN
What is a financial meltdown?
3.“The meltdown can briefly be described as
a freeze-up of credit in a system that is
saturated with debt that can no longer easily
be serviced.
Lenders are unwilling or unable to lend and
borrowers are unwilling, unable or
unqualified to borrow. All of this is taking
place in an environment where the value of
most collateral is depreciating.” Ibid
Prepared & presented by Waldon
Wright, MBA.
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5. FINANCIAL MELTDOWN
What is a financial meltdown?
4. Financial meltdown can take place in any
country, large or small.
5. The world has become a global village,
with the connectivity and dependency of
economies (trade, globalization) upon one
another; what happens in one country
affect others.
Prepared & presented by Waldon
Wright, MBA.
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5. FINANCIAL MELTDOWN
What is a financial meltdown?
6. Net results of a financial meltdown:
a) Many people all around the world lose
large portions of their wealth.
b) Many people lose their homes and their
jobs.
c) Small and large businesses worldwide
are forced into bankruptcy.
d) Entire nations face bankruptcy. E.g.
Greece.
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
i) The Biblical Perspective
a) Unethical, unbridled greed, and the
love of money. 1 Tim. 6:10; Eccl. 7:29
b) The wicked borroweth and does not
repay. Psalm 37:21
c) “… when the wicked beareth rule the
people mourn..” Proverb 29:2
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
i) The Biblical Perspective
d) Robbers of God result in individual and
national curse and disaster. Mal. 2:2, 3:812.
e) Disobedience to God’s commandments
lead to curse instead of God’s blessings.
Mal. 2:2; Deut. 28:15.
f) Choice of the devil as leader instead of
God. John 8:44
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
a) Unbridled or runaway greed – the one
persistent culprit that is common to every
known financial meltdown in history.
http://www.financialmeltdown.com
Eccl. 7:29; 1 Tim. 6:10.
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
b) Moral, market, or other causes.
E.g. 1 - Argentina, 2002
* Approx. 50% of citizens of this once-rich
country were living below the poverty line;
* Defaulted on its foreign public debt
* Economy shrank 11%;
1991-1997 the economy grew by 6.7% p.a. on
average, 2nd only to Chile in Latin America
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
b) Moral, market, or other causes.
E.g. 1 - Argentina, 2002
* Reasons for the meltdown
- Too large budget deficit;
- Large public spending over revenues resulting
in unsustainable accumulation of public debt
(collapsing revenue & ballooning interest
payments);
- Cutting Govt. wages & pensions by 13% in Aug.
2001, not enough to prevent the crisis.
Prepared & presented by Waldon
Wright, MBA.
20
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
b) Moral, market, or other causes.
E.g. 2 - Thailand, South Korea, Malaysia, &
Indonesia, 1997 & 1998.
* All four currencies collapsed and had to be
renegotiated.
* Indonesia and Thailand also suffered full
fledged banking crisis.
Prepared & presented by Waldon
Wright, MBA.
21
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
b) Moral, market, or other causes.
E.g. 2 - Thailand, South Korea, Malaysia, &
Indonesia, 1997 & 1998.
* All four economies grew spectacularly in the
previous decade with South Korea becoming a
world class industrial power.
* Good macro economic and exchange rate
management was a key ingredient in their
recipe for success.
Prepared & presented by Waldon
Wright, MBA.
22
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
b) Moral, market, or other causes.
E.g. 2 - Causes for their financial crises:
- Poorly regulated banks;
- Too much short-term debt;
- Govt. guarantees;
- Over-investment;
- Quasi-relations between politicians and
business men;
- Outright corruption, market failure, and
institutional Prepared
weaknesses.
& presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
c) Collapse of a country currency (which
loses much of its value against the dollar)
occurs in most financial meltdown crises.
Prepared & presented by Waldon
Wright, MBA.
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6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
d) What else is involved in a financial crisis
changes from country to country and also
has tended to change over time.
E.g. 1: Govt. defaults on its more
expensive external debt.
E.g. 2: Private firms/businesses often times
cannot pay their debts.
Prepared & presented by Waldon
Wright, MBA.
25
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
e) Other causes:
E.g. 1: Banks get into trouble (run on banks)
E.g. 2: Countries (emerging markets) that
suffered currency or financial meltdown
since 1980 include: Argentina (twice);
Bolivia; Brazil (twice); Bulgaria; Chile;
Columbia; The Dominican Republic;
Ecuador; Hungary; Indonesia;
Korea; Malaysia; Panama; Mexico
(twice)
Prepared & presented by Waldon
Wright, MBA.
26
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
* Going back to the 1960s & the 970s,
the answer seem clear:
“Living beyond your means.”
* At the individual level, it means
spending more than you earn or your
income.
* At the business level, it means income
exceed expenses and cash outflows exceed
presented by Waldon
cash inflows.Prepared &Wright,
MBA.
27
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
* At the national level, we speak of the
current account deficit.
* A current account deficit is by definition an
excess of expenditure over national
income.
Solution: Reduce expenditure and your
problem will go away.
Prepared & presented by Waldon
Wright, MBA.
28
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
“Post-mortem of the 1980s – Imprudent
behaviour by countries was to be blamed.
NB: i) Too much borrowing hikes interest payments
thereby swelling expenses.
ii) We consume too much and invest too little.
iii) So the moral failure was double:
spending too much; and spending on the
wrong items.
iv) The elements are there for a spike in loans
followed Prepared
by a& presented
crash.
by Waldon
Wright, MBA.
29
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
The USA situation of 2007/2008
* Financial institutions lured the
unsuspecting consumer to carry
excessive debt burden.
* Very low interest rates by the Federal
Reserve
^ Banks made more money by lending;
more loans, more profit for the banks.
^ Variable interest rate lending
Prepared & presented by Waldon
Wright, MBA.
30
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
The USA situation of 2007/2008
* Mortgage lending into collateralized
securities of dubious quality/derivatives
– Mortgage-backed securities (MBS)
* Sub-prime lending
* Banks ceased lending
* Unregulated lending and lack of
supervision of the banks.
Prepared & presented by Waldon
Wright, MBA.
31
6. CAUSES OF FINANCIAL MELTDOWN
ii) Realities (Past & Present) Reflect the
Biblical Perspective
f) What is behind the meltdown/crises?
The USA situation of 2007/2008
Result/Impact: 2.6 million net job losses in
2008 (with 524,000 in December 2008 alone)
rising to 11.1 million (or 7.2% unemployment
rate) –BBC News. Also multi-nation recession
(More than 1% of all USA householders was in some
stage of foreclosure in 2008; Banks repossessed
850,000 properties.
For Dec
2008, 303,410 houses
Prepared & presented
by Waldon
Wright, MBA.
32
were in some stages of foreclosure.)
7. AFTERMATH ASSESSMENT
i) Thought provoking questions
a) How do you go forward if you
experienced a financial meltdown?
b) If you have never experienced a financial
meltdown, what can you do to cope if one
comes your way in the future?
ii) Response
a) Review what happened and ensure that you
clearly and correctly understand the problem
b) Identify what lessons you have learned and
what you need to do differently going forward.
Prepared & presented by Waldon
Wright, MBA.
33
7. AFTERMATH ASSESSMENT
ii) Response
c) Assess your situation objectively and honestly
to ascertain what damage or loss you have
suffered bearing in mind the great controversy.
d) If you never experienced a financial meltdown
you may inquire from those you know who
have experience it and or research the matter
so as to be prepared if one comes your way.
e) Review your core values and ethical
standards to ensure that they are still intact.
Make amends where necessary.
Prepared & presented by Waldon
Wright, MBA.
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7. AFTERMATH ASSESSMENT
ii) Response
f) Assess the aftermath to identify what changes
have taken place, such as:
> Is the stock market on the rebound? Are
assets values rising?
> Are corporate losses being replaced by
profits? Are housing prices on the rise again?
> Is the economy on the rebound? Is the dollar
gaining in value? Is employment on the rise
again? Are the banks and other lenders lending
again? Are borrowers willing and qualified to
borrow again?Prepared & presented by Waldon
Wright, MBA.
35
7. AFTERMATH ASSESSMENT
ii) Response
Answers to these questions will give you a good
guide as to how to proceed.
They will indicate in what sectors and industries
are emerging opportunities and where to
invest.
They will also help you to develop survival
strategies.
Prepared & presented by Waldon
Wright, MBA.
36
8. SURVIVAL PRINCIPLES AND STARTEGIES
i)
ii)
iii)
iv)
Resolve to pass your past, so you can go
forward, especially if you suffered a lot and lost
assets or wealth.
Remember and believe that good things happen
to bad people and bad things happen to good
people. (Remember Job and Joseph.)
Resolve to be faithful and obedient to God and
His commandments and ask Him for wisdom.
Live within your means
a) Individual level: Spend less than you earn
b) Business level: Contain expenses within
income andPrepared
cash
outflows within cash inflows
& presented by Waldon
Wright, MBA.
37
8. SURVIVAL PRINCIPLES AND STARTEGIES
iv) Live within your means
c) National level: A current account surplus; if
individuals and businesses operate within their
means (income/inflows), the aggregate effect
is that it with go toward creating a current
account surplus; and good ethical and prudent
national governance with ensure this happens.
v)
Caress opportunities for an individual or
business (entity):
a) If income exceeds its expenditure, the
individual or entity can lend or invest the
excess income.
Prepared & presented by Waldon
Wright, MBA.
38
8. SURVIVAL PRINCIPLES AND STARTEGIES
b) If income of the individual or entity is less than its
expenditure, then either can raise capital by
borrowing or selling equity claims, decreasing
its expenses, or by increasing income.
c) A key survival strategy is to remain liquid during
and after a financial meltdown.
vi) Think long-term with goals and investing.
vii) Return faithful tithe and offering proportionate to
God’s blessings on you and or your business.
viii) Maintain emergency savings and build up your
liquidity.
Prepared & presented by Waldon
Wright, MBA.
39
8. SURVIVAL PRINCIPLES AND STARTEGIES
ix) Minimize the use of debt and credit cards
x) Develop a saving philosophy rather than a
wasteful mentality. A cash budget can be a useful
tool to help you achieve this goal.
xi) If you are unemployed, but have entrepreneurial
characteristics and skills, examine the option of
starting your own business.
xii) Maintain your values and integrity at all costs
and under all circumstances like Joseph and
Job.
Prepared & presented by Waldon
Wright, MBA.
40
QUESTIONS AND ANSWER TIME
BEFORE
SUMMARY & CONCLUSION
Prepared & presented by Waldon
Wright, MBA.
41
9. SUMMARY & CONCLUSION
i)
God does not plan nor predestine that bad
things should happen to His (good) people or
their business?
ii) God’s desire for his people to have prosperity
and peace is conditional upon their love for
Him and obedience to His commandments.
iii) A Financial meltdown is not a design of God
to punish anyone, but is an aberration arising
from human’s sin and departure from God’s
standard and manifested in avarice and
selfishness.
Prepared & presented by Waldon
Wright, MBA.
42
9. SUMMARY & CONCLUSION
iv) The impact of Financial meltdown includes:
* Loss of assets/wealth by many;
* Many persons lose their homes and jobs;
* Businesses– large and small – worldwide
are forced into bankruptcy.
* Entire nations face bankruptcy
v) A major and recurrent cause of financial
meltdown is sin manifested in unethical,
unbridled greed, and the love of money .
Prepared & presented by Waldon
Wright, MBA.
43
9. SUMMARY & CONCLUSION
vi) Each person and business should objectively
and thorough assess how each is affected by
the meltdown and strategize how to go
forward.
vii) A prudent survival strategy should include:
a) Choosing to be faithful and obedient to God;
b) Living within ones means at the individual
and business levels and caressing the
opportunities they provide.
c) Remaining liquid and being long-term with
goals and investing., and maintain integrity.
Prepared & presented by Waldon
Wright, MBA.
44
10. CONCLUSION
Jeremiah 29:11
For I know the plans I
have for you, declares the
Lord, Plans to prosper you
and not to harm you,
plans to give you hope
and a future.
Prepared & presented by Waldon Wright, MBA.
45
ASi
Inter-American Division
ADVENTIST –LAY PERSONS
SERVICES & INDUSTRIES
The End