Category Archives: Investing

Financial Lessons from Jacob?

Sometimes I am amazed where I find insight in God’s word for a given topic. I was reading about Jacob in Genesis. We get insight to see Jacob from beginning to end in his relationship with God. It struck me that like so many of us, as he lives out his life and grew more and more committed to God, He did so quite imperfectly… like all of us who try to serve God.  Genesis 30 documents many mistakes, and the consequences of those mistakes on Jacob and his family. God, however, has not removed His blessing or promise from Jacob and Jacob prospers financially. There are a few important nuggets to consider in his attitude during a tough spot in his life.

Genesis 30:25-43

   25Now it came about when Rachel had borne Joseph, that Jacob said to Laban, “Send me away, that I may go to my own place and to my own country. 26“Give me my wives and my children for whom I have served you, and let me depart; for you yourself know my service which I have rendered you.” 27But Laban said to him, “If now it pleases you, stay with me; I have divined that the LORD has blessed me on your account.” 28He continued, “Name me your wages, and I will give it.” 29But he said to him, “You yourself know how I have served you and how your cattle have fared with me. 30“For you had little before I came and it has increased to a multitude, and the LORD has blessed you wherever I turned. But now, when shall I provide for my own household also?” 31So he said, “What shall I give you?” And Jacob said, “You shall not give me anything. If you will do this one thing for me, I will again pasture and keep your flock: 32let me pass through your entire flock today, removing from there every speckled and spotted sheep and every black one among the lambs and the spotted and speckled among the goats; and such shall be my wages. 33“So my honesty will answer for me later, when you come concerning my wages. Every one that is not speckled and spotted among the goats and black among the lambs, if found with me, will be considered stolen.” 34Laban said, “Good, let it be according to your word.” 35So he removed on that day the striped and spotted male goats and all the speckled and spotted female goats, every one with white in it, and all the black ones among the sheep, and gave them into the care of his sons. 36And he put a distance of three days’ journey between himself and Jacob, and Jacob fed the rest of Laban’s flocks.

37Then Jacob took fresh rods of poplar and almond and plane trees, and peeled white stripes in them, exposing the white which was in the rods. 38He set the rods which he had peeled in front of the flocks in the gutters, even in the watering troughs, where the flocks came to drink; and they mated when they came to drink. 39So the flocks mated by the rods, and the flocks brought forth striped, speckled, and spotted. 40Jacob separated the lambs, and made the flocks face toward the striped and all the black in the flock of Laban; and he put his own herds apart, and did not put them with Laban’s flock. 41Moreover, whenever the stronger of the flock were mating, Jacob would place the rods in the sight of the flock in the gutters, so that they might mate by the rods; 42but when the flock was feeble, he did not put them in; so the feebler were Laban’s and the stronger Jacob’s. 43So the man became exceedingly prosperous, and had large flocks and female and male servants and camels and donkeys.

Laban realized that he was blessed because of association with Jacob, who serves God. Jacob, despite his mistakes, has been a witness to Laban and Laban wishes him to stay. Before we give Laban too much credit, though, his reason for wanting Jacob to stay is selfish and greedy. He has financially prospered with Jacob. Laban shows no interest in worshipping or serving God or even thanking God.

Jacob, however also realized that he needed to begin investing not only in Laban’s flock but also in preparing for his own household for the future.  Jacob was willing to leave without pay other than the wives (and children) he had agreed to previously… even though Laban’s flocks have clearly prospered under Jacob’s care. Jacob demanded nothing extra, and was willing to leave with only his agreed upon wages (e.g. his wives and children) and God’s promise. He did not demand more than he agreed to just because Laban had prospered. He did not resent Laban and wish him ill because of his success.

However, God made a way for Jacob to prosper from his hard work helping with Laban’s flocks for those fourteen years. When Laban suggests Jacob name his price, Jacob finds wisdom in a solution that meets both his need and Laban’s, so he stays. Jacob tends the flocks and prospers exceedingly.

Each of us should consider…

  • Am I planning responsibly for my future needs and those of my family similar to Jacob?
  • Do I trust God to provide for me, adhering to His principles and values?
  • Do I keep my word and live up to my agreements? or do I demand more from someone just because they prosper from the work I agreed to do?
  • Do I resent someone else’s success or am I satisfied with the wages I agreed to?
  • Of course it is also acceptable when our agreements have concluded to negotiate for better terms in the future based on the quality of our work. If all parties agree, we have a new agreement. If not, we should not resent the other, but just make a different choice to pursue our goals… just as Jacob was willing to leave. At no point did Jacob think of Laban as an enemy.
  • Do I recognize that if / when God blesses his people in financial matters it seldom comes overnight or without hard work, faith, and planning? Jacob, like Abraham before him, trusted God and worked hard over many years to generate his wealth. God blessed his hard work and it was fruitful. God does not reward laziness or lack of faith.

Yes, we can still get much wisdom to apply for our lives by reading and studying the Bible, all of it. I encourage you to spend time every day in God’s word. I have found it to be very fulfilling in my life and my relationship with Jehovah.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Do Not Catch A Falling Knife

When cooking in the kitchen we may remind ourselves not to catch a falling knife. We recognize it will cut us if we catch it on the way down. It is better to let it fall, getting hands and feet out of the way… and then pick it up.

However, sometimes it is easier said then done. Reflex kicks in when the knife drops and we reach for it. To avoid grabbing the knife as it falls typically requires planning ahead of time not to catch it and then discipline to avoid reaching for it. It is easy to make a mistake when reacting to a situation without upfront planning.

The same is true for many investments… in particular the stock markets when we see dramatic declines in a market. Sometimes the temptation is to jump in quickly to a market that is seeing dramatic declines. However, this can be a lot like trying to catch a falling knife. Sometimes the market will rebound and sometimes it continues to fall. You may want to wait to make sure it has finished falling before you get substantially in. You certainly don’t want to make that decision on a reflex or without a plan.  A market decline is one of the times that a clear, well thought out plan really helps.

For effective long term “investors”, or the “investment” section of our portfolios, a sharp decline can be a good opportunity to buy some stocks you have already researched and targeted.  An effective long term investor already had a plan for a market decline. They had cash or liquid fixed income on the sidelines they could use to buy stocks when the price falls. They have an idea of what they want to buy and for what time horizon. They have already considered a strategy to cost average in or rebalance their portfolios as the markets decline. They are less “reactive” and minimize risk of “panic” decisions because they had a clear plan.

If you are a long term investor and did not prepare for a decline… maybe your plan was just to ride out the short term storms, holding the same assets you held on the way in. While this is a long term strategy and it minimizes the chance for panic selling at a market bottom, you may want to look for a chance to rebalance your portfolio.  Are there some investments you think have a better chance of recovering quickly than the ones you are currently holding?  Do not rush into changing your strategy. Consider carefully. You may want to seek competent professional advice.

If you are a non professional “trader” or have part of your portfolio reserved for trading you want to consider a few key points.

  • You should already have a plan for this scenario. If you had a good plan you should stick to it… or at least revisit it before you start making quick decisions to buy or sell stocks on emotion or reflex.
  • If you didn’t… you are now reacting with emotion and reflex. Take some time to ensure you are calm and evaluate a strategy from where you are at the moment.
  • Avoid the psychology of holding onto a losing position… hoping it to become a winning position if you can hold out long enough.  Try to make decisions based on the facts rather than emotion.
  • If the basic reasoning, or thesis, for your trades is no longer valid you need to be willing to change your positions (take a loss if necessary) and position for recovery.
  • Avoid the assumption that you “must be near the bottom” and thus can put everything into the market. Be prepared for the market to stabilize, recover, or continue declining. Avoid “betting” on one direction.

If you are a non-professional trader and have a large portion (or all) of your portfolio dedicated to “trading” instead of a more stable approach with some dedicated to longer term “investing”… now may be a good time to reconsider. You may look at “trading” into some high quality names, perhaps with dividend, diversified across sectors and convert some of your portfolio to “investment” as diversification to your “trading” portfolio.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Are You Digging a Hole, Investing, or Gambling?

There are always a lot of uncertainties in the world. Some may be global political conflict or wars or terrorism. Others may include domestic conflict between political parties with very different views. The world is still recovering from a recession with a lot of interference from central banks keeping interest rates lower than they should remain. You do not hear about it much anymore, but banks are not really back to historical interest rates, which indicates they are still manipulating the markets to the extend they can.

How do you handle your finances in a situation like this? Are you digging a hole, gambling, or investing with your finances?

Digging a hole refers to constantly spending more money than you earn. Even if you are not accumulating debt, if you are not saving money for future emergencies or future planned expenses (e.g. car, house, retirement, etc.) you are actually digging a hole for yourself that gets harder and harder to climb out of as you get older. This principle applies whether world events are volatile or calm. Remember, that if you want to retire someday or even if you have to retire due to medical issues… you may not always be able to continue bringing in new income.  That means that over the long range, you need to save ahead, not dig a hole or even break even paycheck to paycheck.

Gambling reflects those who, often driven by greed, make disproportionately large investments, or bets, on things like oil or a particular stock that they think will make them “rich” if it moves in a particular direction. This approach may be acceptable as a speculative diversification in part of an investment portfolio but the typical investor should never assume any particular investment is “fool proof” and go “all in” on it. Sometimes it will work out, but it may also result in disaster.

A wise investor instead diversifies across multiple investments. He or she is prepared for unexpected moves in value of the investments in short term and long term. The wise investor does not always make the highest return on any one investment, but instead makes a steady and predictable return on investment regardless of circumstances.

So each of us should periodically reflect… “Am I digging a hole? gambling? or investing?”

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Biblical Guiding Framework For Financial Freedom

God lays out important principles for managing finances in the Bible. He wants His people to be wise stewards of the resources He provides.

In this article we lay out a high level framework that  provides valuable insight for those who take time to genuinely understand and apply it. I have paired the elements of the framework with some of the scriptures that support them, but there are many other scriptures that could be added.

You can also check out our Resources section of the website for other organizations with a great depth of material on this subject.

1 – Earn Money: Develop a skill and work hard to generate income.

  • Colossians 3:23 – Work willingly at whatever you do, as though you were working for the Lord rather than for people.
  • Proverbs 6:9-11 – But you, lazybones, how long will you sleep? When will you wake up? 10 A little extra sleep, a little more slumber, a little folding of the hands to rest— 11 then poverty will pounce on you like a bandit; scarcity will attack you like an armed robber.

2 – Control Spending:  Set a budget that matches your income and stick to it in order to control spending. This budget should include short term “monthly expenses” but also saving ahead for long term expenses like a house, university education, future medical expenses, retirement, and contingency funds for the unknown.

  • Proverbs 6:6-8 – 6 Take a lesson from the ants, you lazybones. Learn from their ways and become wise! 7 Though they have no prince or governor or ruler to make them work, 8 they labor hard all summer, gathering food for the winter.

3 – Control Debt: Carefully consider any debt before committing.

  • Proverbs 22:7 – Just as the rich rule the poor, so the borrower is servant to the lender.
  • Romans 13:8 – Owe nothing to anyone—except for your obligation to love one another.

4 – Invest: Choose to invest your financial resources for growth. Don’t stuff your mattress with cash in hopes of avoiding risk.

  • Matthew 25:14-30 – Jesus teaches us through the parable of the talents. Click the link to read the scripture.
  • Ecclesiastes 11:1 – Send your grain across the seas, and in time, profits will flow back to you.

5 – Diversify Investments: Diversify investments to manage risks.

  • Ecclesiastes 11:2 – But divide your investments among many places, for you do not know what risks might lie ahead.

6 –Consider Carefully and Seek Wise Counsel: Whether choosing how you will earn income, how to control spending or debt, or how to invest to grow your finances you should carefully consider your strategy and seek wise counsel.

  • Proverbs 22:3 – A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.
  • Proverbs 15:22 – Plans go wrong for lack of advice; many advisers bring success
  • Proverbs 14:15 – Only simpletons believe everything they’re told! The prudent carefully consider their steps.

7 – Steward Your Financial Strategy: Once you establish your financial strategy you must periodically review and analyze all elements to ensure you are following it and it is effective. This applies to earning income, spending, debt, and investment.

  • Matthew 25:14-30 – Jesus teaches us through the parable of the talents not only that we should invest, but that a good steward periodically checks on the effectiveness of his investments and makes adjustments according to their performance.

8 – Ethics: Following God’s instruction in how we manage our finances is more important than the actual dollars themselves.

  • Proverbs 22:1 – Choose a good reputation over great riches; being held in high esteem is better than silver or gold.
  • Proverbs 22:5 – Corrupt people walk a thorny, treacherous road; whoever values life will avoid it.
  • Ecclesiastes 12:13 – That’s the whole story. Here now is my final conclusion: Fear God and obey his commands, for this is everyone’s duty.

9 – Do Not Be Greedy: To those who love money, they will never have enough. Money is a tool to serve God and to support yourself and your family. The draw to “get rich quick” brings much risk.

  • 1 Timothy 6:10 –  For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows.
  • Ecclesiastes 5:10 – Those who love money will never have enough. How meaningless to think that wealth brings true happiness!

10 – Store Up Treasure in Heaven

  • Matthew 6:20 – Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal.
  • 2 Corinthians 9:7 –  You must each decide in your heart how much to give. And don’t give reluctantly or in response to pressure. “For God loves a person who gives cheerfully.”
  • Proverbs 22:9 – Blessed are those who are generous, because they feed the poor

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Fix Your Thoughts on What Is True, Honorable, and Right

There are many traps that can lead us to fail in executing our personal financial strategy. One of the most common mistakes is to take our thoughts off of what we are trying to accomplish and focus instead on the obstacles in our way or get distracted focusing on what others have that we may want.

We can easily get distracted by lies and frustrations that are not productive focus for accomplishing our goals.

“If I only have a better car, bigger house, newer phone, etc. then I will be happy.”

“I deserve (or need) a better job, and more expensive clothes, etc.”

“I will save more in the future, when I am making more money.”

“I don’t have the job skills I need, so I can never accomplish my goals.”

“Others had an easier road than me. I am just not lucky enough.”

Scripture tells us to avoid the trap of coveting what others have and comparing ourselves to them.

17 “You must not covet your neighbor’s house. You must not covet your neighbor’s wife, male or female servant, ox or donkey, or anything else that belongs to your neighbor.” [Exodus 20:17]

In Paul’s letter to the Philippians, he gives additional guidance to help us.  

And now, dear brothers and sisters, one final thing. Fix your thoughts on what is true, and honorable, and right, and pure, and lovely, and admirable. Think about things that are excellent and worthy of praise. [Philippians 4:8]

This instruction applies broadly to all aspects of our lives and is certainly applicable to how we manage our finances. We do best when we focus on what is true and honorable and right. Instead of focusing on what others have or what we think we deserve or our frustrations over obstacles we face, we stay focused on our financial plan and working toward achieving our goals.

Set goals, steward progress, remain focused. Yes, be aware of obstacles enough to plan a way around them… but don’t focus on them as permanent blocks in your path. Instead of focusing on what you think others do not deserve, focus on what you need to do to be successful.

  • Stay focused on and content with what God has provided.
  • Focus on the plans you set to accomplish our goals, or on developing good plans.
  • Steward progress toward those goals.
  • Avoid distractions and traps that could lead you astray.
  • Pray for God’ s help, praise Him as He works in your life, and give Him thanks!

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Victory Comes Through Wise Counsel

We are all at different experience levels and have different gifts in regards to many aspects of life that affect our finances. We have a certain perspective which contains some bias based on our prior experiences and personality. As an individual, we will not see and understand a situation as well as if we approach it from multiple perspectives including wise counsel from those we trust.

Proverbs 11:14

  14Where there is no guidance the people fall,
But in abundance of counselors there is victory.

I remember a great example where my family was walking from a van to the entrance of some entertainment we were going to on vacation. I was focused on the destination, where is the gate, where do I buy tickets, and “marching” quickly with purpose. Yes I was focused on my goals. My wife, however, also interested in our shared goal, had a very different perspective. As I promptly walked passed a beautiful flower display she gently tugged at my arm and showed it to me. I am glad she did. We were approaching the same situation and had the same goals, but very different perspectives while doing so. Together we had a better view then individually.

This same concept is true for controlling debt, controlling our spending, behaving according to the ethics and guidelines that God has lined out for us in the Bible, making decisions with regards to generating income, saving, investing and stewarding our finances. Seek wise counsel from people you can trust or from professionals. To seek counsel does not mean you must follow it. It simply provides more background and understanding and perspective to help you make wise decisions and achieve victory on your goals. Of course, we should be cautious as to who we trust and how we weigh the opinions and insight of others. To listen to the counsel of a fool is to join him in his folly.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Better To Lose Opportunity Than Money

For those of us who are focused largely on investing rather than high speed trading to grow our portfolio over time we must constantly remind ourselves that our time horizon is not to maximize our net worth daily, weekly, or even monthly. We are on a long journey of growing our money reliably and predictably over time.

When we see high volatility in stock markets as we have recently it can be tempting to try to start trading swings or try to perfectly time our investments to buy at the very bottom and sell at the very top. This is not typically an effective strategy for most of us.

Try not to get distracted by hindsight evaluation of “missing opportunities” where you “could have” invested at the bottom. Market bottoms are seldom formed in a day. What looks like a cheap stock today, may be even cheaper tomorrow or in 6 months.

Stay focused on long term strategy. If you are well positioned with cash or cash equivalents available in your stock portfolio, start identifying what stocks you may want to buy and at what levels. Establish a plan with a specific time frame (e.g. 1 year, 5 years, 20 years). Then identify for those stocks you want to buy… at what levels you want to cost average your way in as the market may continue to go down or may level and go back up.

It is ok to not have all your money in the market even when it hits bottom. Part of a good strategy is capital preservation… not losing what you already have. And a foolish mistake can wipe away a lot of prior gains and turn them into a loss in a volatile market.

As an example, let’s consider some round numbers for the S&P 500. The market highs were around 2100. If you put in all your cash or cash equivalent to the index when it declined 5% to 2000, you may have felt good at the time, but probably less so when it moved lower after that. It may be even lower in 3-6 months.

On the other hand, if you have mapped out a strategy to cost average in and bought some at 2000, knowing you have more investment capital to invest if it continues to decline, you are probably feeling ok about your decision.  You may want to keep buying in portions as the market declines 5, 10, 15 or 20%. If it never makes it down to your final “buy” targets… that is fine. You have missed an opportunity but not lost any additional money. In fact, that is good for the rest of the investments you already made.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

The Way of a Fool Is Right In His Own Eyes

We should be careful to listen to God’s advice. Those who wish to become wise, who love knowledge, must accept discipline and correction… must recognize that others may have more wisdom in some areas than ourselves. That is how we learn and get better.

Proverbs 12:1 and 15

1Whoever loves discipline loves knowledge,
But he who hates reproof is stupid.

 15The way of a fool is right in his own eyes,
But a wise man is he who listens to counsel.

If you are not humble enough to acknowledge that others may have wise input worthy to consider, that you may have made or be making mistakes than you will continue to make mistakes.

Be humble. Seek wisdom. Accept correction from God and from others. Learn from it. Grow in wisdom.

These fundamentals apply to all aspects of life… and certainly to all aspects of managing your finances. There are great examples of public organizations or private advisors that can help. Most people even have others around them that may have good input.

For a few examples, please visit our resources section of our website.

Resources

Our mission is to help you. We provide the Resources section of GrowGodsMoney.org to help provide you with greater depth of resources by referring you to high quality organizations that have a lot of great content or provide a financial service (e.g. broker for investments).

We do not get paid by these organizations for referrals. We do not “compete” with these institutions, but rather see ourselves as part of the body of Christ in connecting you with helpful resources they already provide.

If there are resources you would like to recommend or give us feedback on, please send us information from the Contact Us page.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Diversify Through Fixed Income

When I first started investing, I did not know where to begin in regards to researching the fixed income (e.g. government or corporate bonds) asset class. It is a significant asset class to consider for our portfolio which typically may have more modest returns but  less risk than stocks. It can seem overwhelming to at-home investors, or even those who are trying to understand recommendations from their financial advisors. However, we do not  win by guessing or by always assuming our advisor is right, but by studying and asking good questions to improve our understanding.

I recommend spending some time at the Vanguard site online to research and possibly invest in diversified government or corporate bond funds. They provide a lot of choices and effective diversification through bond funds. The also have a good search tool to help you sort through the many options available and find what is right for you.

vanguard bond funds

Take the time to research and study either with Vanguard search tool or other similar tools at different investing sites. Browse through and drill down to read about the different options. For those working with a financial advisor, use this research to help focus your questions and validate the advice they may be giving you. Compare the fee structure of products you are offered vs. the low fee structure at Vanguard.

For the record, I have no affiliation with Vanguard or any other products I comment on in my articles.

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .

Diversify Within Stock Investments

Once you have used your personal financial plan to decide how much money you have to invest within an asset class like the stock market, you still want to ensure you diversify within that asset class.

In other words, if you have 5,000 dollars to invest in the stock market you should not put it all on one stock or even in a set of related stocks that could all lose value at the same time. For example, I am not diversified very effectively if I spread my investment across 5 stocks, but they are all banks… or all oil companies… or all technology companies. If everything goes well I may feel like a genius, but I am also taking significant risk if something disrupts a whole sector. If I invest in all oil related stocks, then I am subject to the changes in the price of oil affecting my entire portfolio.

There are many options in investing, even in how to diversify. One way to diversify is to invest in Exchange Traded Funds (ETFs) that represent sectors of the stock market instead of single stocks. Another way is to pick specific stocks but make sure they are diversified (e.g. maybe 1 financial, 1 oil, 1 tech, 1 healthcare, etc.). However, the more specific you get in investing in individual stocks, the more homework you need to do to keep up with each individual company and what may affect the stock price. You should never just buy and hold without continuing to follow the stocks or groups of stocks you hold.  You should visit performance of your investments and underlying sectors or companies on a regular basis.

For many, they are well served to consult an investment professional. However, even those who rely on professional investors to help them should do their own homework to understand the recommendations and investments that they are making. You would not just tell a real estate agent to buy a house for you… you go with them, look at the data, look at the specific investment, you get their input but you make the decisions.

For those still trying to find out what diversification across sectors of the stock market means, or for those trying to find effective ways to steward their investments there are many useful tools to give you information at a quick glance with opportunity to drill down for more detail. I found one example of a good tool for sector analysis at Fidelity. You can start with sector overview and drill down for more information within each sector. Helpful to getting quick exposure to sector analysis. I have included a picture below as an example of different sectors of stocks. In the live version you can click on the “+” and drill down further on their website.

fidelity sectors

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Remember that all you have belongs to God. Manage your money God’s way. Visit GrowGodsMoney.org .