The 7 Primary Financial Needs & The Most Important ONE

Austin L Garner
11 min readAug 16, 2023
Photo by Alexis Fauvet on Unsplash

Working with clients from all walks of life, there are really only seven primary financial needs that are planned around. Each one looks completely different for every individual, but they are fundamental to each person. One of these needs, if prioritized, will substantially empower all the other financial needs.

#1 — Income

Production (People at work)

Earned income is money received as compensation for work performed, such as wages, salaries, bonuses, commissions, tips, and net earnings from self-employment.

Passive (Capital at work)

Passive income is earnings from a business activity in which a person is not actively involved — a silent investor, for example.

Portfolio (Capital at work)

Portfolio income does not come from passive investments and is not earned through regular business activity. It comes from dividends, interest, capital gains, royalties, and from interest paid on loans.

Voluntary Charity (Other people at work)

Generosity is the voluntary giving of help, typically in the form of money, to those in need without expecting anything in return. Generosity comes in many forms, including birthday money from grandparents. It is the voluntary giving from other people’s production.

Involuntary Charity (Other people at work)

Welfare refers to a range of government programs that provide financial or other aid to individuals or groups who cannot support themselves. Welfare programs are typically funded by taxpayers and allow people to cope with financial stress during rough periods of their lives. It is the involuntary giving from other people’s production.

No matter what income source anyone has, value must be produced by someone in order for anyone to have income. If no one wants to produce anything, nothing gets produced and everyone loses. If people willingly produce because they acknowledge the rewarding outcome of creating value for other people, everyone wins. The more the merrier.

For the most part, I found that people generally like to work. They enjoy being productive, providing value to others, and earning an income in the process.

Beyond working, the majority of people I have spoken to mostly prefer Passive income. They want to invest in other productive people and organizations for a financial return, as tax efficiently as possible.

People who desire to either Earn income or invest for Passive income, typically do not prefer to live off of the productivity of others but tend to think generously about their abilities and economic activities. People with this way of thinking simply CREATE.

Most importantly though, people really just want the freedom to choose the opportunities that may be available for them to pursue at any given time.

#2 — Cash

As income flows to us, what is it that we actually receive? When we create value and exchange that value to others, what do we want in return? There is a reason it is commonly known as Cashflow.

Cash is the instrument of financial transactions, or the medium of exchange. It is a tool that we typically do not consume directly but utilize in trading for the goods or services that we may consume directly.

Money

The Federal Reserve Note is currently the legal tender of the U.S. and is our standard of “money”. It is backed solely by the claims paying ability of our government, which is really just the ability to tax its citizens.

Money Substitutes

Other things that are utilized in transactions that are considered as good as actual money are Checks, electronic transfers of Bank Deposits (digits on a computer screen), and Debit Cards.

Money has been in many different forms and has changed throughout history. Ultimately, whatever the form of money is, for the most part, really doesn’t matter. It is simply a tool that people have accepted as a means to transfer value between themselves.

#3 — Expenses

Once income is received from the various sources, it will be utilized in 4 primary ways. It will be used to LIVE on, it can be used to GIVE away to others, we may OWE it in debt, taxes, and insurance, or it may be used to GROW until needed in the future.

Money isn’t necessary for us to acquire the needs of life, but it certainly adds a tremendous amount of convenience to the process. We no longer have to barter our possessions, but can barter an already acceptable object of exchange.

The exchange of value, with our without money, in our desire to acquire the things of life, is simply the activity of TRADE.

#4 — Capital

Emergency Savings

Emergencies happen to everyone. It is best to plan for them to happen rather than getting caught off guard and having to make harmful sacrifices. If we do not plan for them, we will be forced to use someone else’s money, with a price, that may put us in a more difficult situation. Emergencies are things we cannot plan for but could reasonably happen. However, we should NOT try to insure against anything bad from happening, but we do want to be wise in our planning.

Another name for this portion of savings would be ‘insurance money’. We have it ready if it is needed, but desire to never use it. The typical guideline for how much should be in someone's emergency fund, is 3 to 6 months of expenses.

Whatever amount is determined to be appropriate, where should it be stored? If you could find or design the most ideal place to park these funds, while not using, what would the features of that solution be?

Primary characteristics commonly described by clients:

  • Quick and easy access to money.
  • No risk.
  • Maintains purchasing power/keeps up with inflation.
  • Contributes to overall family wealth creation.

Major Purchases/Expenses

Major Expenses can and should be planned for. They don’t have to be necessarily large purchases or expenses; they really are anything outside of the normal monthly spending that is more than you would normally spend. This need is exponentially the largest need over one’s lifetime. Think about it. How many appliances, pieces of furniture, medical procedures, vehicles, vacations, etc. will someone purchase throughout their life?

If one person starts driving at age 16, purchases a car on average every 5 years, with their last vehicle being purchased at 76 years old, they would need 12 cars. Suppose the average price of those twelve cars is $20,000 (my first car was much cheaper than this, by my last one will be much more expensive). This person’s need for transportation will cost at least $240,000 over 60 years.

Are they married? Add another $240,000.

Kids? Add another $240,000 per kid.

You and I both know the cost will be well over $720,000 over a family’s lifetime.

Where are they going to get the money for these purchases?

Borrow

The Lender will get rich off the family's purchases.

Save

The Interest is not making the Lender rich, but it’s not making the couple rich either.

In fact, there is not much difference, in the long term, between borrowing and saving. With Debt, we pay interest that flows away from us, but in Saving, we interrupt compounding and give up interest we otherwise could have earned. Lost opportunities are almost equally expensive as debt interest. Saving does give us more freedom and control, but it tends to not be enough for all of our lifetime needs, which can encourage the use of debt and welfare programs.

Simply saving cash also limits our ability to take advantage of great opportunities beyond our personal needs.

Opportunities

How many opportunities do we miss out on because “we do not have the money”? Most people would like to get out of debt, support their children’s or grandchildren’s education more, check some items off their bucket list, buy the house for sale in their neighborhood, start a new or expand an existing business, give more generously to their favorite organizations or start a new ministry, etc. We never run short on opportunities that we want to pursue, but we may be limited on our ability to take advantage of them.

We have an enormous need to STORE money, to build Capital.

#5 Investments

The misconceptions around investing today are staggering. When that word is mentioned, most people automatically assume a complicated Wall Street product that they need help to manage.

If we want to be successful investors, we must think and behave like the most successful investors. The absolute most profitable business in the world is banks. To think like a banker and therefore generate profit like a bank, we must ask what do banks invest in? For the most part, they require collateral in the form of real estate, vehicles, equipment, and various other assets. The collateral is their contingency plan. Their primary investment is the person who borrows from them.

“All investments are investments in people.” — Austin L. Garner (yes, I just quoted myself)

Therefore, to profit like a bank, we should lend, like a bank, to ourselves for the things we may typically purchase by borrowing from a bank. We should also PAY IT BACK (with interest) just like we would willingly do through a traditional bank. We can also finance the purchases of other people, including family members, business entities that we own, and business partners.

This is how we can invest in ourselves without the help from “professional money managers”. Who do we consult to purchase our vehicles, plan a vacation, choose the education for our children, purchase houses, etc.? Most of the time we simply discuss it within our family and make the decision ourselves. Everything we do is making others wealthy because they are the one’s financing our lives. We should be our best investment. We invest when we LEND for profit.

If there are other assets that we are curious about, we will be better equipped to acquire the proper education first (another opportunity to invest in ourselves), then manage it ourselves for maximum benefits.

The beginning of wisdom is this: Get wisdom. Though it cost all you have, get understanding. — Proverbs 4:7

Whoever gives heed to instruction prospers, and blessed is the one who trusts in the Lord. — Proverbs 16:20

#6 Generosity

Many times giving is considered a separate activity from investing because it implies no return on the gift. Scripture has a little different perspective:

Matthew 6:19–21 (ESV) “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.

Luke 12:33–34 (ESV) Sell your possessions, and give to the needy. Provide yourselves with moneybags that do not grow old, with a treasure in the heavens that does not fail, where no thief approaches and no moth destroys. For where your treasure is, there will your heart be also.

2 Corinthians 9:6 (ESV) The point is this: whoever sows sparingly will also reap sparingly, and whoever sows bountifully will also reap bountifully.

1 Timothy 6:17–19 (ESV) As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life.

… and many others.

It actually seems that the Bible is very clear that our generosity in this life does have a return, but perhaps not in this life. What we give today can be an Eternal Investment. I tend to view generosity as an investment, but it does require a different perspective, therefore I have listed it as a separate financial “need”. However, we can only SHARE with others what we have been given first.

#7 Legacy

Eternal investments also include how we bless succeeding generations to think and behave properly about stewarding the blessings of God. We must learn to think multi-generationally: how our lives will impact those that follow us. Legacy is much more than just leaving behind stuff. It should include a proper training. Legacy is discipleship in its purest sense. We do not have to wait until our latter years to establish a legacy. It should be a priority in all stages of our lives. If we do, we will LEAVE much more than just our possessions.

The Most Important ONE

All of these financial needs are important and everyone prioritizes them differently depending on their circumstances and stage of life. But there is ONE that should be prioritized in every circumstance and stage of life that will empower every other financial need. It is our need for Capital. By prioritizing capital accumulation, I will desire to create as much value for others that I can to generate as much income as I can. I will also be incentivized to spend wisely for personal needs, so that I can also plan to take advantage of profitable opportunities that will arise.

The more capital we have access and control over, the more potential we have. In fact, when we have a readily available pool of cash, opportunities will appear that we could not have seen before. Preparedness opens our mind to see other possibilities and equips us to be better stewards of our resources.

What would be the ideal solution for our ENORMOUS need for Capital?

Build Wealth

The same discipline to borrow and repay, or save up, each month can be structured to capture the benefits of both strategies. The initial capital is saved up, just like the Saver, then as enough capital is saved up, rather than withdraw and interrupt a lifetime of compounding, it is borrowed against and repaid (with interest) just like the Borrower. The interest typically paid to other lenders flows toward us rather than away from us. We can be both the borrower and the lender for the things we are going to do anyway.

“Fortunately, there is a place where wealth can be accumulated and stored that… has been has been around for over 200 years and is widely accepted. There are millions of people who participate in the practice. It is Dividend-paying Whole Life Insurance with a Mutual Company — one that is owned by its policy holders.” -R. Nelson Nash, Building Your Warehouse of Wealth

As compounding continues and more capital is accumulated from additional “deposits” (premium payments to a high cash-value dividend-paying whole life insurance policy) and loan repayments, our capital exponentially increases to take advantage of other opportunities as well.

“[The Infinite Banking Concept] is all about building a banking system so that you control 100% of your needs for money at all times. You can recapture that “financial energy” that is now flowing away from you (you will never see it again) and it will accumulate on an income tax-free basis for your benefit.” — R. Nelson Nash, Becoming Your Own Banker

Biblical Actions

In conclusion, we can empower our creation and management of wealth by adopting the entire process of biblical stewardship:

  1. CREATE: Produce Value for Yourself & Others, According to Your Abilities. (Exodus 35:30–35)
  2. TRADE: Engage in Mutually Beneficial Free Exchange Directly (barter) or Indirectly (money). (Deut. 14:24–26)
  3. STORE: Accumulate Capital as the Seed for Greater Wealth. (Exod. 3:8, 21–22)
  4. INVEST: Lend to Many Others & Borrow from None Other. (Deut. 15:6; Exod. 22:25)
  5. SHARE: Support God’s Servants & Serve the Needy. (Deut. 14:27–27, 24:19)
  6. LEAVE: Inspire a Legacy of Faithful Stewardship. (Numb. 36:9)

Accumulating Capital through high cash-value, dividend-paying, whole life insurance, as taught by R. Nelson Nash, will empower every aspect of our stewardship.

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Austin L Garner

Founder of Disciple Wealth Strategies (DiscipleWealthStrategies.com). Teaching God's Solution to the World's Financial Problems.