We just finished Crown’s Ten week Biblical Financial Study in our church. If you have never taken the study, I would encourage you to do so. I believe it is one of the most effective tools available in understanding what God’s Economy is all about. The study goes into more depth than normal about financial issues. Many of these are areas you would not expect the Bible to address. One of these is investing.
But does the Bible include good investment advice? Absolutely! Our last post we talked about risk, and investments include risk. So what can we learn from God’s Word about managing this risk or being good stewards of our investments? Here are just a few passages to get us started.
Invest for the long term: Proverbs 21:5 says “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty”. Proverbs warns in many passages about a “Get Rich Quick” attitude (Proverbs 28:22; Proverbs 33:4-5). On December 12, 1914 the stock market dropped 24.4%. On October 19, 1987 it lost 22.7% and the first week in October in 2008 stocks fell over 22%. But yet overall from 1926 – 2010, the S&P 500 returned an average annual gain of 9.8%. (CNNMoney.com)
The Bible says invest for the long term. Starting early is always important, but it is never too late. When we invest, we must determine a goal (retirement, education etc.) and invest towards meeting that goal and not concern ourselves with the day to day fluctuations of our investments.
Incidentally this also is why I believe it is wrong for a Christian to play the lottery. The lottery is the ultimate “Get Rich Quick” scheme.
Avoid risky investments and know what you are investing in: Ecclesiastes 5:14 says in the New Living Translation “Money is put into risky investments that turn sour, and everything is lost…” We must be careful of the investments that promise those “unbelievable returns”. Remember the higher the return, the higher the risk. Ask those that invested in Bernie Madoff’s investments and lost 65 million dollars.
Proverbs 27:23-24 tells us to make sure we know what we are investing in and stay away from the excessively risky investments.
Don’t put all our eggs in one basket. Diversify!: Solomon tells us in Ecclesiastes 11:2 to diversify our investments. If all of our investments were in Japanese stocks we probably lost about 15% in March. If all of our investments were in US stocks we probably lost over 30% in 2008. It is important to remember that no investment comes with a guaranteed return. Even our homes have probably lost value over the last five years. Solomon could have been the wealthiest and possibly wisest man of all times and we should heed his advice about diversification.
It amazes me at how many areas of our financial life the Bible addresses. Luke 12:34 says that where our treasure is there our heart will be also. I believe this is why God has devoted more verses in the Bible to money and possessions than almost any other subject. God cares about our heart and how we handle our money, including our investments, is a good indication of what the priorities of our heart are.
God wants us to invest and to take reasonable risks. But we must remember to trust Him; not our investments or even the government or our insurance.
The Bible includes so many principles on how we, as His followers should handle the money He has given us to manage. This includes our investments. Make sure any investment advice we receive is consistent with God’s Word.
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