Apostles, Prophets and Personal Finance

Editor’s Note: Mathew originally posted this in April 2004. It’s worth another look, in conjunction with Mat’s new post.

I think it is widely known among Mormons that, depending on which data set you look at, Utah has led the nation in bankruptcies for a few years. Even before Utah assumed the number one spot, our leaders talks about personal finance seemed to get more pointed — moving from general words about thrift and frugality to extended sermons and bits of specific advice. Some of that advice is contrary to what a financial planner would likely recommend — a fact not lost on the speakers themselves. In his October ’98 address during the priesthood session President Hinckley had the following to say in a story referring to President Faust:

He had a mortgage on his home drawing 4 percent interest. Many people would have told him he was foolish to pay off that mortgage when it carried so low a rate of interest. But the first opportunity he had to acquire some means, he and his wife determined they would pay off their mortgage. He has been free of debt since that day. That’s why he wears a smile on his face, and that’s why he whistles while he works.

I urge you, brethren, to look to the condition of your finances. I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage.

No doubt this advice is being taken literally by many of the faithful. I have family members who have taken money out of retirement accounts in order to make lump sum payments on their home. This is almost certainly a bad decision from a financial standpoint — yet I can’t imagine a clearer example of following the prophet.

In his talk, Elder Wirthlin admiringly told the story of a man who vowed to pay off his debts instead of declaring bankruptcy. It was a great story and it reminded me again of some family members who did something similar. It took those family members well over the 10 years that a bankruptcy can legally remain on a credit report to pay back the money, but they considered it something close to a sacred obligation to honor their debts. Again, this was almost certainly a bad decision from a financial standpoint (although not as clearly as bad a decision as raiding the retirement accounts to pay down the mortgage).

I think I’ve been pretty clear that I think some of the advice being given across the pulpit is not very good from a financial standpoint. At the macro level it seems even worse. To the extent they agree on anything, economists are pretty united in the belief that bankruptcies are useful tools governments can apply to encourage appropriate amounts of the type of risk taking necessary for wealth-creating entrepreneurial activity to thrive. If everyone treated their debts as an obligation to be honored at almost any cost, the nation and the world would be poorer (I understand that you could probably argue the converse — but I think it is a stupid argument and this post is already too long). Since only Mormons will give credence to Elder Wirthlin’s talk, we may end up poorer as a people if we follow his advice while the rest of the nation continues to engage in healthy entrepreneurial activity.

Looked at from a spiritual wellness perspective, however, I firmly believe that both President Hinckley and, to a lesser extent Elder Wirthlin, have taught true principles. I expect that the couple who raided their 401(k)s to make a lump sum payment on their home will be blessed for it, at the very least in the same way that President Faust was blessed — with the peace of mind knowing you are free of debt.

I personally take a net worth approach to my finances. I invest money every month, but I don’t pay down my student debt as fast as I otherwise could. Most of my loans are locked at a rate that is lower than historical rates of inflation and all of them are well under the 4% President Faust’s mortgage was at. In my rational mind, as long as my total net worth increases, it doesn’t matter to what account the money is applied. Using this approach it is likely that my net worth will actually be zero sooner than if I otherwise payed directly on my loans due to the fact that my fairly conservative investments will almost certainly have a greater rate of return than the interest payments I pay on my loans. Yet…there is a pebble in my shoe. Knowing that I owe a financial institution money — and that I will be making payments to that entity for the next 29 years and 7 months (my rational self says that I should extend the debt to the maximum amount of time possible) bothers me.

Likewise, I believe that in many, perhaps most, cases there is more satisfaction and honor in paying back one’s debts than seeking the protection of the courts. At the end of the day, material wealth is a poor substitute for lasting happiness.

I guess my conclusion is that the prophets and apostles aren’t in the financial advice business — they are in the spiritual guidance (what lifestyle managers might call “well being”) business and their advice ought to be seen and interpreted first and foremost in that light–and not as a guide to increasing your material wealth. Let’s hear it folks — what’s your take on this new-found interest among our leaders in personal finance?


  1. “a man who goes into law because it is practical but really wants to be an academic”

    Jordan, you have just described most lawyers in the world, I think. at least, most of the lawyers on this blog (and others)

  2. …cont

    The quote on my blog suggests we should in fact question them.

  3. Aaron, you seem to be suggesting that we shouldn’t encourage people to the prophet’s words at face value becaue it might create “disillusionment with Church leaders.” In the first place, I’m not sure why that’s a bad thing. Religious history tells us that people have always been disillusioned with prophets, some so much so that they kill them. It seems, the only way to change that, is to try to tell the prophet what he can and can’t say (like some early church members), or to give lip service to the prophet’s divine role, while we merely ignore him when he speaks on a subject that we don’t think he is qualified to opine on (as some church members do today). More fundamentally, who’s problem is it, if people are “disillusioned” with church leaders? Isn’t it the people’s problem. Some early brethren, who followed Joseph on the zion’s camp march, became disillusioned with him, when things didn’t turn out as they expected. Others, like Brigham and Wilford, recognized a greater purpose in the experience, and fondly remembered it in later years.

  4. Agreed on errors of fact — the prophets are human too. There is no need to get hung up on Brigham Young speculating about moon men.

    I’m in the Elders Quorum presidency. So, imagine that I — called of God to lead the Elders — I had told them that I thought the quickest way to get to Logan’s house is to take the 225th street stop, which is clearly a factual error, since the 231st street stop is much closer. Wow, my calling and the divine source of my priesthood must be wrong! How could I have made such an error?

    Or, one could remember that I typically have a hard time navigating my way out of a large parking lot, much less a complex city, and any error I make is likely to just reflect my own human weaknesses.

  5. As the saying goes, “those who can, do — those who can’t teach — and those who can’t teach, become lawyers.”

  6. Kristine says:

    But Frank, couldn’t it also be argued that many peoples’ apostasy stemmed from their expectation that Joseph would be infallible in the areas of finance and politics, and that they then concluded he was a fallen prophet when his financial and political schemes did not pan out? Wouldn’t a more reasonable set of expectations about what prophets are about have prevented their disillusionment and apostasy?

  7. DJ265: JAG is a great option. I will probably do a few years myself…after I get back from Iraq. My NG unit was mobilized today for Iraq duty.

  8. ETB’s not completely off-base, mind you; but when we’re talking about facts & data, I think we’re out of the scope of what he was saying.

  9. Every post I start to write turns into so much whining about my job that I’ve erased them and started over. The best indicator of my work life is that I was released from the YM’s presidency last year and was just released (shh, not yet public information) as Chair of the activities committee for different stated reasons but the truth being that I’m too busy.

    As for Mormon networking, Tokyo is the place. My bishopric is two CEOs and a COO. Lots of work-aholics, too, though–fun stories about wives being on home leave in the states and getting so fed up with living in Tokyo that they buy their dream house in Utah just for fun and tell their husband later; ditto for the upsize of the rock on their wedding rings. Somebody shoot me before that happens to me.

    In an attempt to relate my post to this thread, I am paying of loans first and will invest later.

  10. Excel = magnify talents.

  11. Frank,

    First off, and for the record, I do not take the dogmatic position that there are certain fields or areas of inquiry for which we should assume the prophets are ignorant, or for which their prophecies are surely without value. So, for example, I do not say that “the Prophet should stay out of politics, period.” (That said, I still can get uncomfortable about Church involvement in public policy debates, for reasons I’ve discussed in another post).

    My reference to Benson’s “14 Fundamentals” was meant to refer to some specific claims he makes therein that are very problematic. To cite one example, Benson argues that the prophet is “not limited by man’s reasoning” in any subject area. But this is demonstrably false. Brigham Young’s cosmological views were a little “off,” for example (and that’s putting it very mildly). I think the speech is very troubling in a number of ways, but I don’t have time to get into all of them at the moment.

    As Steve says, there are various types of disillusionment. If Church leaders’ rhetoric creates unrealistic expectations about themselves in the eyes of Church members, and this leads to disillusionment when members see that the reality doesn’t match the rhetoric, then YES, that’s the Church leaders’ problem. That strikes me as a very uncontroversial claim.

    That said, whether or not Church leaders actually do this is a debatable point. But I think Benson’s speech is a clear example of one case where a Church leader did.

    Aaron B

  12. Frank, I guess there are different types of disillusionment we’re talking about here – sometimes, it’s because we think leaders are “fallen prophets” because their predictions fail or their spiritual teachings turn out to be bogus. I don’t think we’re talking about that kind of dillusionment here, but rather one that stems from leaders talking about fields extraneous to the gospel or outside of their relative areas of expertise. Distinguishing along those lines seems important if we want to relate your comment back to Aaron’s (or Mathew’s).

  13. Kristine says:

    Frank, yup.

  14. Good point brayden. I’m def. in that area…i.e. making decent money & far too indebt cuz i tried to ‘do it all’; i.e. exercise stewardship by driving a toyota prius, trying to be self-sufficient. I’ll have to think twice re: whether I want to be an entrepreneur…

  15. Good thing you two (Lyle and DJ265) don’t attend the University of Michigan Law School. One mention of JAG around here, and the kind of reaction you get from your progressive and socially conscious classmates is actually worse than it would be to have human excrement hurled at you.

  16. Ha- funny because I did leave grad school for law school. But that wasn’t because the law was more practical, rather, it was because I was so miserable in academia. It was truly horrid! (even though I was a “promising” young scholar- I was somehat good at thinking up total b.s. that people would then want to publish… Amazing…)

  17. Hey, I never said I wanted to be a legal academic, either. Just adored by co-eds, that’s all. I believe I’m not qualified to be a legal academic, for that matter.

  18. Kristine says:

    I don’t think we should limit them–they can talk about whatever they want to, but we shouldn’t expect them to be experts in every subject, nor should we throw out our own expertise if they say something that is uninformed or mistaken. (It happens–not often, but it happens.)

    Just a little example with no serious salvific implications (I’m pretty sure): Elder Oaks gave a talk a few years ago, in which he said that “thee” and “thou” are formal pronouns meant to show respect. It happens that in English, this is not the case. I know a little bit about this, having studied a couple of old Germanic languages and, specifically, the transition of pronouns from Middle High German into Old English. As a matter of linguistic fact, Elder Oaks was mistaken. It would be stupid for me to spend much time or mental energy supposing that he had some esoteric wisdom which renders the common scholarly understanding of these pronoun forms meaningless. Instead, I can recognize that he is correct about the principle of reverence and leave it at that. But I think there are people who would devote scholarly careers to trying to show that, in fact, thee and thou were somehow formal forms in special situations or in some small region where Brigham Young’s ancestors were born or some such nonsense. Far better, I think, to recognize that Elder Oaks’ is teaching an important principle, and not get too hung up in the illustrations he chooses.

  19. Grasshopper says:

    I had an experience recently that made me ponder the real purposes of the financial advice given by the prophets. My family was approached by an acquaintance in a third-world country (where the PEF is not yet set up) asking for financial assistance with her education. If we had no obligations to creditors, we would have been in a position to easily pay the monthly stipend necessary to cover the balance of the costs of her education. Unfortunately, we *do* have those debts, which made it impossible for us to help her in the way we wanted to.

    It struck me, as we pondered the situation, that the prophets’ financial advice is typically given in terms of bondage, not in terms of financial gain. My debts put me in bondage so that I am not able to help someone else; therefore, she cannot be blessed by my family, and my family cannot be blessed by the service.

    I think the financial advice we receive from Church leaders is focused on making us *free*, not on making us rich.

  20. I second the idea of gauging one’s finances using “net worth”. Although I have to admit Grasshopper’s take is important as well. The trick is finding the balance, which we all do differently based on our circumstances more so than on what a GA has said.

  21. I think President Hinckley summed it up nicely when he said, “That’s why he wears a smile on his face, and that’s why he whistles while he works.” As you alluded to, the leaders of the Church find it more important to have members that are happy than members that are rich (If you can have both, great :)).

    I think if someone’s going to view the leaders’ advice as official financial advice—to heed it or to disagree with it—I think, as with other similar issues, that such a person should be careful to how s/he regards its importance.

    That does not sound right. Let me explain with an example.

    Say someone is a financial advisor or even an advisor and President Hinckley comes to the pulpit and gives the same speech. Say the person reacts to the speech by thinking, “He doesn’t know what he’s talking about. He is a PR person, a media professional. I am the financial professional. All of my education is based on learning, understanding and applying financial professionals. He does not know much about finance. I would not be surprised if I know more. Yeah, I know more about financial investing then the prophet does. His authority in this regard is limited. Hmmm…if I know more than him in this case and have more authority than him in this case, I wonder what other areas…” You get the picture.

    Many other issues regarding doctrine should be approached in the same way.

  22. I thought, based on your opening statement about the prevalence of bankruptcy in Utah, that this post was going to be about how poorly (pun intended) Church members follow the counsel of the Apostles. It is astounding that, after we’ve been counseled to avoid excessive debt over and over again, that Mormons are still pretty good at going bankrupt.

    Or, there’s another way of looking at this problem. Mormons are also pretty good at making money. Part of the risk we incur when accumulating wealth is losing that wealth when one of our investments goes south. One way of reading this data point is that Mormons are actually pretty savvy business people and that their financial sense usually overrides their willingness to avoid debt.

    As LDS we are simultaneously expected to excel in our respective fields (e.g. be the best entrepreneur you can be!), be self sufficient (which is often translated as “be your own boss”), and to avoid debt. It is almost impossible to follow each of these counsels simultaneously if, say, you want to go into the pool making business. There is no way an entrepreneurial poolmaker could avoid some debt. In fact, sometimes more debt is a good thing because the goal may not be to acquire more assets but to acquire more equity. Anyway, in a related point bankruptcies are common among entrepeneurs. If we truly wanted to avoid the risk of debt, very few Mormons would ever be entrepreneurs. We’d all be slaves for the corporate machine that goes into debt vicariously for us.

  23. In his post Matt mentioned the much-commented-upon Utah bankruptcy rate. I assume that this was cited perhaps as evidence of Mormon financial profligacy and the precieved need for thrift-inducing sermons. I have never seen anyone control the Utah statistic for demographic data. Utah also has the youngest population in the country. Young people file bankruptcy at higher rates that older people. Ergo, you would expect an “unusually” high bankruptcy rate in Utah even if the general propensity of the Utahns to file for bankruptcy was the same as the rest of the nation. Indeed, you might even see “abnormally” high filing rates in Utah even if the propensity to file among Utahns was below the national average.

    I have not run the data on this, but it seems like the statistic may mean less than people suppose.

  24. Interesting ideas K, but not everybody is going to be able to filter the way that you can. When leaders quote erroneous facts, most members will take it as gospel… so what is the appropriate reaction? Just keep it to yourself that you know what’s really going on?

  25. Kristine,

    Reread my comments. I never said we can’t ever disagree with the leaders; I said we should be careful when we do.

  26. Kristine–

    I’m not at all convinced that President Hinckley would find it troubling that members are taking his story of President Faust as a literal pattern for themselves. In general I think there is a tendency among many educated saints to underestimate the level of sophistication among church leaders. Somewhere in the back of our minds is the thought that the only thing keeping President Hinckley from agreeing with us is a course in economics or a few months in New York.

    In the specific instance of President Faust’s mortgage, we know that President Hinckley was aware that many would take issue with the wisdom of paying the mortgage off early. Surely the apostles are aware of the weight their words carry and choose them carefully. Of course they are in the position of speaking to many people with drastically different situations–so it is up to the members to cull through it and apply it personally (a point that apostles have made in the past). But I doubt Hinckley would be at all discomfited to learn that people are literally paying down mortgages early and forgoing other investments that carry a higher rate of return.

  27. Let me second Kristine’s “yup” to Frank. Although much of Ezra Taft Benson’s “14 Fundamentals” may be fine, taking every one of his points literally would be a real recipe for disillusionment with Church leaders generally.

    Aaron B

  28. Matthew, reread the old post on church networking and then hook me up with a job like DJ265.

  29. my current list of dream jobs is:
    Jag Corps (30 days paid vacation)
    High school teacher (3 months vacation)
    River rafting guide (life is a vacation)

    It’s mainly about peace of mind although I have some other reasons on one of my excel spreadsheets.

  30. Nice counter-point, Kristine. I think the historical record supports both arguments. Certainly, some members left because things didn’t pan-out the way they thought they should, given that they were following the marching orders of a prophet. On the other hand, some apostates stated that they left merely because they felt that a prophet shouldn’t be delving into subjects like finances, politics and sex.

    Incidentally, I’ve never been taught (and I don’t know that the early saints were either) that the duty to follow the prophet is contingent on him always being right on matter of finance and politics. You are no doubt familiar with Brigham Young’s statement about Joseph in that regard. If he’s wrong on such matters, he’s wrong; perhaps, the most important thing is whether the saints learn to follow.

  31. Kristine says:

    No, climb up on a soapbox and mouth off, using the biggest words I know, so everyone will know I’m the smartest, OF COURSE.


  32. Oops. I should have said “teachings” in the first sentence of my prior post, rather than “prophecies.”

    Given my prior thread on “prophecy,” I think the term may have too much baggage at present, at least coming out of MY mouth. :)

    Aaron B

  33. So, is it safe to assume that many of us don’t put a lot of stock in Ezra Taft Benson’s Ten Fundamentals in Following the Prophet?

  34. Kristine says:

    So, Kim, is it wrong to disagree with President Hinckley about anything? Do we really expect prophets to be experts in every subject? I think that’s an abdication of our own abilities and knowledge that the Lord would dislike. Look at how Joseph Smith asked people to teach him Hebrew and German, so he could interpret the scriptures better–clearly he felt that his prophetic authority did not make him an authority on everything (not even everything scriptural or doctrinal), and was keen to learn from others whom he regarded as authorities on particular subjects. I suspect President Hinckley would be frankly horrified to hear that members were taking the example he used in his talk as a literal pattern for their financial affairs; I feel pretty certain that he would himself consult with financial experts to help him with his personal finances, and I know he has experts investing tithing monies, etc. This idea that being a General Authority somehow gives people, well, general authority, is pernicious.

  35. Steve,

    A little quick to speak for the rest of us–I wouldn’t want to be an academic–at least not a legal academic.

    DJ265–why pay off your loans first? I assume that you have a fairly reasonable interest rate. Is this just a strategy to deliver yourself from bondage?

  36. Steve–

    Did you read my post (and if you can’t get off today for golfing why do you have so much time to blog)? I don’t think the 4% thing was strange advice generally–just bad financial advice. But although it may have looked like President Hinckley was giving financial advice, in fact he was giving spiritual advice. Grasshopper has already made the point that our leaders aren’t trying to make us free rather than rich.

    I identify with the bondage analogy because I, and many of my friends, feel as though their options are limited due to the fact they are in debt. I know a guy who goes by the moniker DJ265 because that’s what he makes a year. He frequently expresses his dissatisfaction with his job but continues on because of his debts. He seems to view the long hours away from his family as a sort of bondage–but is making a short term sacrifice so that he can deliver himself up.

    I wonder if my reservations about viewing my financial position from a “personal net worth” viewpoint don’t stem from the fact that I will likely continue to work long hours and neglect my family as long as I need to make payments on my student loans and the mortgage which I will assume at some point in the future. I interpret President Hinckley to be saying that as long as you have anything but a zero in the “liabilities” column you are in bondage. He isn’t saying that we shouldn’t ever find ourselves in that position–just that we should move out of it as quickly as possible (generally speaking).

    I mentioned in my post family members who took money out of their 401(k) to pay down their mortgage. One of the primary reasons they did this was because they felt like they could be more useful in the service of God as–they hope–couple missionaries without worrying about their mortgage.

  37. Steve: I thought we were talking about whether we should implement President Hinckley’s “financial planning advice,” when it is clear that he is not a financial planner and the advise runs contrary to the advise most professionals would give. ETB indicates that we should, and I generally agree. Interestingly, one can characterize most of the major opposition faced by Joseph Smith in the Kirtland, Missouri and Nauvoo periods as stemming directly from people taking issue with the Joseph’s advice regarding three areas: finances, politics and sex life. Many of the Saints turned apostate/persecutors stated that they didn’t have a problem with Joseph while he stuck to purely lovey-dovey religious theme. They thought that Joseph was out-of-line, however, when he started giving guidance and taking positions as to financial, political and personal issues (read: polygamy). To many of them, the fact that he was giving advice in these areas was a sign that he was a fallen prophet.

  38. There are clear arguments for and against the early payment of debt, especially the low interest kind. Something to keep in mind: when we pay down debt over a longer period of time, the key assumption is that we will continue to have the income stream available to make the payments. For many, thatÂ’s a safe assumption. But for others, money in the hand may be best directed to pay off tomorrowÂ’s debt, today.

    It’s clear to me that our leaders’ frequent treatment of “resource management” is reflective of one of the more acute challenges we face as a church. Spend time in any priesthood executive committee meeting and you will quickly see why: even a few members’ financial troubles can quickly overwhelm and deplete a unit’s limited resources (not just monetary). Financial mismanagement breeds all sorts of familial, marital, and eventually spiritual discord. It can be an all-consuming burden, where things of lasting value take a back seat to mere survival. To borrow a phrase from James, poor financial management often leads to a “multitude of sins.”

    I’ve heard some members wonder why the financial management topic is raised so often in a church setting—“I don’t see anyone starving. . .” Money is an extremely intimate topic for many people. They’d rather discuss their sex lives than disclose how much money they make, or their struggles to pay off unproductive debt. I would argue, then, that these matters tend to be undercounted on our personal tally sheets. We’re simply not privy to most of it.

  39. To be fair to the G.A.s, they’ve been pretty good about distinguishing between consumer debt and mortgages/student loans, etc. I agree that the 4% loan thing was strange financial advice, but in general their advice is pretty good.

    But I guess you’re asking in a way whether there is a “business” that G.A.s should stick to (i.e. salvation) and leave the rest to us. I’m not sure we can limit them. Kristine’s right that we don’t expect our leaders to be experts in every subject, but we can (and do) expect that when they pipe up about something, they know what they’re talking about. Debatable though some of the specifics may be, no one can dispute the overall wisdom of their financial advice, I think.

    Now, if we’re talking about taste in movies, that’s another story, because the church really didn’t know what it was saying when it made R movies off limits.

  40. Kristine says:

    Um, seriously, most of the time small factual mistakes aren’t that important. Heck, they probably make them on purpose so that people like me will have the opportunity to repent of our intellectual pride :). There’s rarely a need to correct them publicly, I think.

  41. Where in the gospel does it say that “mormons are expected to EXCEL in their respected fields”? Or is that some sort of CULTURAL expectation?

  42. Why would unquestioning obedience be key lesson that God would want us to learn during our short time on earth? How will that be helpful in the eternities?

    And isn’t a little ironic that Brigham Young preached that one of the most important lessons is obedience to authority, when he was the spiritual and political king of utah?

  43. Yes, but one can magnify talents without “excelling” in one’s profession. Take for example, a man who goes into law because it is practical but really wants to be an academic. (Not me, by the way).

  44. I identify with the bondage analogy because I, and many of my friends, feel as though their options are limited due to the fact they are in debt. I know a guy who goes by the moniker DJ265 because that’s what he makes a year. He frequently expresses his dissatisfaction with his job but continues on because of his debts. He seems to view the long hours away from his family as a sort of bondage–but is making a short term sacrifice so that he can deliver himself up.

    I see that in my wife’s co-workers. In her field, you can make 90k a year or you can make 400k a year, the difference being the number of hours you work and where you live. You get people who are not able to cut back their hours or their work, because they are in bondage to their debts.

    My wife? She can work only two days a week and “spend” most of that on savings and keeping her skills fresh. I could afford to turn down a job that paid twice what I make (and required 200 billable hours a month) for one where I can walk my daughter to school most mornings.

    Some great thoughts in that comment.

  45. RE Kristine’s comment on “thee” and “thou”:

    According to the textbooks, you’re right, but in terms of contemporary English usage, you are wrong. When any normal English speaker (i.e. not an academic) hears “thee” or “thou”, they hear the formality of archaic language and will generally be reminded of the Bible. Since these familiar pronouns dropped out of normal usage, they have taken on the associations of the only place they are normally found nowadays, the KJV, i.e. formality, solemnity, and not knowing what the heck is meant by words that seem familiar.

    When an LDS English speaker uses these pronouns, it sets apart the speech act from everyday language usage. I hope that for many people this creates a closer bond to Heavenly Father. For me, when I really want to feel close, I pray in Finnish so I can use normal pronouns and not feel guilty about it.

%d bloggers like this: