Category Archives: Investing

Control Debt, Control Spending, Diversification, Ethics, False Teaching, Generate Income, Greed, Optimizing Life, Plan Carefully and Seek Wise Advice, Saving, Speculative Investment, Stewardship, Treasures In Heaven

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 .

Control Debt, Control Spending, False Teaching, Generate Income, Investing, Optimizing Life, Parables, Plan Carefully and Seek Wise Advice

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 .

Control Debt, Control Spending, Ethics, Generate Income, Investing, Plan Carefully and Seek Wise Advice, Proverbs, Saving, Stewardship

Victory Comes Through Wise Counsel

We are all at different experience levels and have different gifts in regard to many aspects of life that affect our finances. We have a certain perspective that contains some bias based on our prior experiences and personality. We will better understand a situation well 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 .

Investing

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 from the past, 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 .

Generate Income, Investing, Optimizing Life, Stewardship, Taxes

This Decision Could Impact Your Income By 10-20% Or More – Vote Wisely

What if I told you that a single decision could impact all of your earning potential, savings, and investing by 10-20% or more? A wrong decision moves toward reducing your income, and a good decision moves toward increasing your income. You would immediately want to know what it was and how to learn more about it.

In the United States of America, we have the honor of voting in elections to select who takes many of our public offices at the local, state, and national levels. Elections have consequences and voting matters… a lot!

Our country was founded by Christians who were seeking freedom to worship God freely and Biblically, out from under any tyrannical rule of a king. Freedom was important… and so often not truly achieved.

It is very important to understand that the USA was not founded as a democracy, in which a majority of people can vote for whatever they want, including taking the wealth and possessions of the minority. Instead, God guided our founding fathers to establish a wonderful form of government known as a constitutional republic. We do in fact participate in voting to elect representatives to the national government, but just as important is the US Constitution, which is in place to limit the power of the national government. The intent was to have a small national government doing the bare minimum (such as providing for the common defense… that’s the military) and not getting involved in impinging on the freedom of the states and the people.

Now we have a huge, stifling, mass of national government bureaucracy that tells us even how much water our toilet can flush and what kind of light bulbs we must use or cannot use.  We have fallen a long way and given up much freedom. The Constitution is constantly under attack from those who wish to redefine it and consider it a “living document”, which means essentially… “as long as we can get judges to say it means something else, then it does”. This approach is wrong.  The founders put in place a management of change process for the Constitution… and it is not simply getting people in black robes to say it means something else today than it did a few hundred years ago. It is called constitutional amendments. The process has been used many times, but not recently. The Constitution means what it says until we follow the process to change it. That is the only way to protect the individual rights of the people and the founding fathers knew it! It is supposed to be hard to change!

Not only does the national government continue to grow and impinge on personal liberty, but it continues to spend money it does not have at an increasingly alarming rate… on things it should not be involved in managing and does not manage well. To pay for this, the national government always says we need to spend more money on more government programs and raise taxes or go so far into debt we will never get out. Even if they print enough money to pay off the debt, the money we have will fall in value because of the extra money printed. Our purchasing power plummets! If a business was run this way, the same government would probably throw the business leader in jail.

America was founded as a land of opportunity! Those who work hard can improve their family’s standard of living over multiple generations or sometimes even in a single generation. This is harder and harder to do as the government gets bigger and taxes more and puts in place more regulations and more burdens like healthcare programs for which they have no constitutional authority, despite what a ruling of the Supreme Court may say.

Elections have consequences.   It all ends up affecting your ability to earn income with liberty, to keep what you earned rather than giving it to a government to waste, to save and invest freely and rely on God and the talents He gave you rather than relying always on the national government.

For those who want to get everything for free with someone else’s money… there is not enough of “someone else’s money” to pay for everything you want you will always be beholden to the national government to get by. You basically make yourself a voluntary dependent (e.g. like a child) of the government. On the other hand, many of us want to keep our freedom and the fruits of our labor. We want a small national government and a return to the protection of our personal liberty provided by the US Constitution. We trust in God and ourselves to work hard and get ahead. If we fail, we own it, and we get back up and try again. We don’t expect someone else to always pay our bills or cover our mistakes. We are accountable to God for how we use what He has given us in this life, whether time, talent, or treasure.

I encourage active participation in elections, not only by voting but also by influencing those around you. Research the truth. Do not trust what politicians say, but rather judge by the fruit of their lives as the Bible instructs us. Do not be lazy and believe what TV network news shows tell you, for they are decidedly leaning toward big national government and less individual freedom. The same is true for most social media sites today. Instead, seek out the truth diligently on the internet. Search out confirmation from multiple time-tested, reliable news sources. (You can’t trust everyone’s blog, either.) We are to test everything and discern truth from lies. If someone is constantly changing positions when it suits them, then you know they have no principle. They are political chameleons, and you cannot trust them except to look out for their own best interests. If they are honest but their plans will bankrupt our country worse than today… you may be able to trust them, but you are voting for disaster and loss of freedom. Look for those whose past actions and accomplishments line up with what they say and line up with what God’s word says. Seek those who strongly support the protection of individual rights provided by the Constitution… for ultimately it is your rights they protect!

How much harder it is to manage your personal finances when the government always takes more and more from what you earn, what you spend, what you invest, and even what you own when you die! What good is it to earn and save and invest if the government can just come and take what they want from whom they want?

Elections have consequences. Get involved today and don’t stop trying to influence your elected officials once they get into office. Remain engaged!

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

Diversification, Plan Carefully and Seek Wise Advice

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. They 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 the 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 .

Diversification, Plan Carefully and Seek Wise Advice

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 in one stock or even in a set of related stocks that could all lose value simultaneously. 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 a 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 for 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 the performance of your investments and underlying sectors or companies on a regular basis.

Many 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 houses, you get their input but you make the decisions. The same is true for investing.

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 valuable tools to give you information at a quick glance with the opportunity to drill down for more detail. I found one example of a good tool for sector analysis at Fidelity. You can start with a sector overview and drill down for more information within each sector.  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

I hope these quick thoughts help you stay properly connected to your investment decisions!

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

Diversification, Plan Carefully and Seek Wise Advice, Tools

How Do I Diversify My Investments?

Congratulations to those of you who are ready to consider investing as part of actively managing your finances. Now… a common question is “How do I know how much to invest in what assets?”

Truly it can be overwhelming at first. To start, it is important to assess your personal risk tolerance. Are you wanting to take more risk for more potential gain or minimize risk and accept more modest returns?

There are lots of good tools online if you look for them. For example, Charles Schwab provides good information to get started investing on their How To Invest page. Vanguard also has a similar investor page to help you assess your risk tolerance to guide your investments as well as information on asset allocation. Fidelity.com also provides a lot of information for those getting started. There are many sites you can research, and you probably want to look around for more than one. Another example may be the Motley Fool, a funny name to be sure, but a good site.

There are also investment advisory firms like TradeSmith and Stansberry Research.  These last two will try to sell you investing tools or research. You can consider carefully and decide if or what you want to buy. For a few hundred dollars a year you can get good investment advice without a big financial commitment. If you are interested in managing your own investing more actively, some of their tools are worth considering.

Information on sites like these is available to a large extent even if you don’t invest with them. Of course, each website will have contact information for you to contact them and get more information.

It is important to get a feel for how you may want to invest and diversify your money. How aggressive or conservative do you want to be? Always consider that the highest returns generally bring the highest risk, meaning that you could lose money chasing high returns.

I encourage you to pray and take time to assess your comfort with the various risk/reward balance associated with different asset allocation approaches. Do not rush into investing. It is a long-term activity not to be hurried and decided in 30 minutes or even a single day. That said, you will never get there if you don’t get started.

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

Investing, Plan Carefully and Seek Wise Advice

Are Fear and Greed Really an Investment Strategy?

Warren Buffet is a well-known and well-respected long-term value investor. He invests in companies when he sees the cost is low relative to the value of the company and then sells later after the stock value has increased. He is not a day trader and typically invests with a long-term horizon. When Buffet speaks, many who want to make money investing will listen closely.

We should take caution whenever we put someone on a pedestal as a role model or guide for our lives. We should test what they say against what God teaches in the Bible to ensure we are not following a “false prophet” who appears to lead to prosperity but in reality leads to destruction or separation from God.

Whatever I may think of Mr. Buffet’s political opinions, he certainly has some real credibility with regard to investing.  One of his well-known quotes can actually be quite helpful in establishing a certain mindset for us to consider when we are investing.

“Be fearful when others are greedy and greedy when others are fearful.” Warren Buffet

I could certainly do a study on the words “fearful” and “greedy” and make a case that we should not literally let fear and greed make our investing decisions, but that would truly be missing Mr. Buffet’s point. What he is suggesting is that the average investor, and many professionals as well, have a tendency to allow emotions to guide their investing and not for the better.

When the market is priced very high, people get greedy and forget about the danger of a market pullback. The same investors who were too fearful of buying when stocks were low now jump in when stocks are high.  Then when difficulties around the world cause the same stocks to tumble in value, people become fearful and sell while stock values are low. This represents “buying high” and “selling low”, which is not a robust strategy.

Of course, Buffet is not suggesting we blindly buy when people are fearful, as we could easily buy stocks that are still going lower. He is simply suggesting that we take note of when people are widely fearful about stocks plunging down and look for bargains that we are confident will increase in value over a several-year time frame as market forces settle out. On the flip side when the market seems “unstoppable” and we are tempted to keep putting more money in… consider selling some of what you bought and taking profits. Then you are once again ready with cash in the account to buy the next time people panic and the stock values fall.

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

Control Debt, Control Spending, Generate Income, Greed, Investing, Optimizing Life, Treasures In Heaven

Contentment Is Essential for Financial Success

Financial success is not to be measured against an absolute standard of money earned or by comparison of net worth to others. There is always someone with more money. Financial success is achieved by matching our resources to our needs and desires while we humbly live for God and serve others. Finding contentment rather than coveting what others have is essential for finding this success. Then we are free to find our joy through relationship with Jesus Christ, who promises never to desert us.

Ecclesiastes 3:12 I know that there is nothing better for them than to rejoice and to do good in one’s lifetime;

Hebrews 13:5 Make sure that your character is free from the love of money, being content with what you have; for He Himself has said, “I WILL NEVER DESERT YOU, NOR WILL I EVER FORSAKE YOU,”

The United States of America is a wealthy nation. By global standards even many considered to have low income in the USA are relatively wealthy. Despite this relative wealth, most consider themselves to be living day-to-day or month-to-month. They genuinely feel that they are barely getting by. There is insufficient planning for the future, insufficient savings and little investment. There is much coveting and little contentment.

We could double the money everyone is earning, and I dare say the broad results would be largely unchanged. Many people would have more stuff they want (and do not need) but would be no better prepared for the future and still be unsatisfied because they don’t know how to be content.

For those who cannot find contentment with what they have, they may never have enough. There is always the potential to have more. The ability or willingness to be content provides a foundation for satisfaction in achieving personal success.

Of course, contentment should not be confused as an endorsement to be lazy. Instead, in proper context, contentment provides important balance in managing your work hours required to generate income, controlling spending and debt, in how you select your investing strategies… and opens wide the door toward giving to others and serving God.

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