In the Lectures on Faith, Joseph explains three principles of faith. First, faith is a principle of action.
 Faith leads to Action
We begin with a belief in a true thing. We then open our hearts to receive revelation on the topic. This assurance then leads to action. For example, we plant seeds because we believe they will grow. We knock on a door because we believe it will be answered. In spiritual things, we believe Jesus set the example for how to live and having been told by the Spirit that this is true, we now have faith in this principle and we then try to live like Jesus. We believe the scriptures are true. We pray about them and receive revelation that this is so. We then read them because we know they contain the word of God and inform us how to live. I can go on. But this is a key to understanding faith. Having a just a particular belief, such as believing in Santa, rarely makes us live differently. But, faith, on the other hand, because we have received revelation and know something is now true, leads us to act differently. In this way, faith is a principle of action.
Throughout First and Second Nephi we can find evidences for Nephi acting on account of his faith: He returned to Jerusalem to obtain the brass plates (1 Nephi 3-4), he returned to Jerusalem to get a wife (1 Nephi 7), he built a ship (1 Nephi 17), and so on. Each time, Nephi acted because he has received God’s word (either from his father or from the Lord himself, although in each case he knew through the spirit of revelation it was from the Lord). He had an assurance that what he had received from the Lord was true and this then led to action.
While still living in South Africa I was offered my dream job. This is what I had been working towards for a few years and I wanted to take the position so badly. But when my boss told me about how they wanted to give it to me, the Spirit told me not to take it. I knew God's will for me was not to take the job but I now didn't know what He wanted me to do. Over time people began suggesting I move to Utah and go to BYU. I didn't want to do it because I loved where I lived and what I was doing. My family and friends were there. Then, the Spirit said to me that if I stayed in Cape Town I would not get married. If I moved to the States I would have that opportunity. I now knew God's will for me. I felt quite anxious because I wanted to do what Heavenly Father wanted me to do, but I wasn't sure about what specifically I was supposed to do. So I prayed and asked if I should go to BYU and I felt prompted to open up the Doctrine and Covenants. I randomly opened to section 98. Through reading the first three verses, I knew God had heard my prayer and that He was saying that I needed to go to BYU. I felt the most indescribable joy in that moment. I felt like I was about to burst. It truly felt like a fulness of joy. Because God told me his will I now had faith (and not just belief) that moving was what I needed to do and no matter how hard it was for me to relocate to a different part of the world, my faith (and the revelation) enabled me to do it. God telling me that I needed to move meant though that I needed to act. I needed to do something. When God tells us His will, it requires action on our part. Faith always leads to action.
A while back I felt like I need to be more patient with my husband and children. I was praying about what to do and after opening up the Doctrine and Covenants I read this: “And above all things, clothe yourselves with the bond of charity, as with a mantle, which is the bond of perfectness and peace” (Doctrine and Covenants 88:125). The Lord told me that I need to control my emotions and have more charity for them. Since then I decided on some actions that I would take because I know God's will and want to do it. My faith has led me to action.
 Faith gives us access to God's Power
Faith leads a person to act and when they act, this leads to power. This is the second principle of faith that Joseph Smith discusses. By faith, things come into existence, things are changed, or things remain the way they are. For instance, it was by faith that the world and everything on it was created (Lecture 7:2). It is by faith that our characters are changed to become more Godlike. It is by faith that the worlds stay in their orbit (Lecture 7:5). Mormon and Moroni taught that Christ said if you have faith, you can do whatever is expedient in Christ (see Moroni 7:33; Moroni 10:23). This is more than just action, since you can perform an action without divine help. The power that comes from faith enables you to do so much more than you could on your own.
In Hebrews 11 there are multiple examples of faith operating as a principle of power. In Verse 7, for instance, it states, “By faith Noah, being warned of God of things not seen as yet, moved with fear, prepared an ark to the saving of his house; by the which he condemned the world, and became heir of the righteousness which is by faith.”
Through the word of God, Noah was told to build an ark. He was obedient, having faith that he was doing God's will. Because he acted, based on his faith, through the power of God, the animals then came on the boat. Could he have gathered the animals by himself? No! It could only have been done through God's power. This only came about because he acted. If he had not acted, he would not have experienced this great miracle. Power follows action.
Verse 30 refers to Joshua and the Israelites taking the city of Jericho. The Lord told them they needed to walk around Jericho each day and gave them specific instructions on how to do it. They were obedient and acted. They then were able to take over the city as the walls fell to the ground. This was a demonstration of God's power. Would they have been able to take over the city if they had not done as the Lord said? No! It is interesting to go through all the examples that Paul cites in Hebrews 11 and see how the demonstration of the power of God was followed by the individual acting based on revelation that was received.
In First Nephi there are clear examples of faith as a principle of power. For instance, when Nephi and his brothers were returning from Jerusalem through the wilderness, his brothers wanted to return to Jerusalem. His brothers were angry and bound him with strong cords and were going to leave him in the wilderness to die. But then Nephi prayed, “O Lord, according to my faith which is in thee, wilt thou deliver me from the hands of my brethren; yea, even give me strength that I may burst these bands with which I am bound.” When he said that the bands were made loose. This occurred because of his faith and not because of any strength Nephi had (1 Nephi 7:17-18).
Another profound example is in the Joseph Smith Translation of Genesis 14:26, “Now Melchizedek was a man of faith, who wrought righteousness; and when a child he feared God, and stopped the mouths of lions, and quenched the violence of fire.” Melchizedek as a child had faith and through that faith he used the power of God and did things he would not have been able to do alone.
One time when I was in England visiting some friends I woke up with an abscess in my mouth. My face began to swell more and more each day. For various reasons I was not able to go to a dentist and I still had another 10 days of being in England. I didn't know what to do. I did had faith that God could heal me though. I had had various experiences in the past so that I knew that. One night I knelt down and prayed. I told Heavenly Father I knew he could heal me and I was now asking Him to do that. My faith led me to act and ask God to heal me. I couldn't heal myself. I needed God's power to do it and through having faith and then acting through prayer, I was able to be healed. The next morning I woke up and the abscess was gone. Faith leads us to action which then leads us to be able to access God's power.
Mormon's sermon in Moroni 7 which I quoted from earlier discusses this power that comes as a result of faith:
...for it is by faith that miracles are wrought; and it is by faith that angels appear and minister unto men; wherefore, if these things have ceased wo be unto the children of men, for it is because of unbelief, and all is vain.For no man can be saved, according to the words of Christ, save they shall have faith in his name; wherefore, if these things have ceased, then has faith ceased also; (Moroni 7:37-38).If we want to experience the power of God and many miracles in our lives, we need to have faith. We need to learn God's will through revelation and act accordingly. This brings great power.
 Faith and Sacrifice
In the end, our aim is to develop “faith unto life and salvation.” This is the type of faith that is necessary for exaltation. Joseph Smith discusses the three things necessary for the exercise of this faith:
(1) The idea that God actually exists.
(2) A correct idea of his character, perfections and attributes.
(3) An actual knowledge that the course of life which he is pursuing, is according to his will.
For a person to sacrifice all things, it requires more than just belief that they are doing the will of God. They need to know it. Otherwise, when they are required to sacrifice everything, it will be too hard. Without this sacrifice, it is impossible for us to develop the necessary faith unto life and salvation. This type of faith is required for exaltation.
The process for developing this faith is cyclical. We sacrifice, which leads to God telling us we are doing His will. This then leads to an increased ability to sacrifice. We then are told we are doing His will and our faith increases. We sacrifice more, and again our faith increases in the same way. This continues until we have the ability to sacrifice all things. Once we have reached this point, we then are able to obtain faith unto life and salvation.
Joseph Smith states,
Let us here observe, that a religion that does not require the sacrifice of all things, never has power sufficient to produce the faith necessary unto life and salvation; for from the first existence of man, the faith necessary unto the enjoyment of life and salvation never could be obtained without the sacrifice of all earthly things: it was through this sacrifice, and this only, that God has ordained that men should enjoy eternal life; and it is through the medium of the sacrifice of all earthly things, that men do actually know that they are doing the things that are well pleasing in the sight of God. (Lecture 6:7)Without faith unto life and salvation, there is no exaltation. Joseph Smith stated in Lecture 7:8, “When men begin to live by faith they begin to draw near to God; and when faith is perfected they are like him; and because he is saved they are saved also; for they will be in the same situation he is in, because they have come to him; and when he appears they shall be like him, for they will see him as he is.” He then continues, “And what constitutes the real difference between a saved person and one not saved, is the difference in the degree of their faith: one's faith has become perfect enough to lay hold upon eternal life, and the other's has not.” (Lecture 7:9)
So with each increase in faith, we become more like the Savior, until our faith is perfected and we are like Him. This takes continued sacrifice, until we are able to sacrifice all things. When we have sacrificed all things, we are then in a position to obtain the faith that is necessary for exaltation.
It is a process to develop this kind of faith. It begins with a desire to believe. We then open our hearts to receive God's word. We then act on it and access the power of God. We are asked to sacrifice. As we do so because we have faith, knowing we are doing God's will, our faith increases. We then sacrifice more and our faith increases again. Each time we sacrifice, we become more like the Savior. Eventually, we are able to sacrifice like Abraham and then like the Savior. We are then like the Savior, having perfect faith.