False Teaching, Optimizing Life, Plan Carefully and Seek Wise Advice

What Is Love?

People put a lot of focus and money into highly marketed holidays like Valentine’s Day, but should we? Is a man-made holiday really ever a reason to make major financial purchases you would not otherwise make? I think the answer is very intuitive when the question is phrased this way. No, we should not let marketing and man-made holidays dictate when we make major purchases. Love is not about how much money you spend on someone or what you give them on a designated day of the year. That is not God’s definition of love at all.

We are sharing an article posted by our sister site, HearingFromJesus.org.

What is love? This is a very old question with many answers. Context is important. We may “love pizza”, but that is different than when we say we “love our spouse”. Today, the world even steals the word “love” as a replacement for “sex”, which is completely incorrect. These are certainly not the same meaning. Greek, the language in which the New Testament was largely written, had multiple different words for different types of love. In English, we have one word and we must therefore pay close attention to context.

Many put a lot of time and focus into the highly marketed cultural holiday of Valentine’s Day. Candy makers will tell you that you must buy chocolates to show you love your spouse. Greeting card makers insist you must “care to send the very best” and thus spend $5 or more on a card, and send one to everyone you know. Flowers are a must, right? But now they even sell gold dipped flowers. Wow. Of course, not to be outdone, Jewelers insist that you are a buffoon if you don’t buy diamonds for that special someone in your life. Once company even suggests you should buy from them a new luxury car. We do well to remember that this is marketing intended to sell things and get our money. This is not how God tells us to show love to one another.

God calls us to show love to one another daily, not once a year, or on a few annual special occasions!

1 Corinthians 13

The Excellence of Love

      1If I speak with the tongues of men and of angels, but do not have love, I have become a noisy gong or a clanging cymbal. 2If I have the gift of prophecy, and know all mysteries and all knowledge; and if I have all faith, so as to remove mountains, but do not have love, I am nothing. 3And if I give all my possessions to feed the poor, and if I surrender my body to be burned, but do not have love, it profits me nothing.

      4Love is patient, love is kind and is not jealous; love does not brag and is not arrogant, 5does not act unbecomingly; it does not seek its own, is not provoked, does not take into account a wrong suffered, 6does not rejoice in unrighteousness, but rejoices with the truth; 7bears all things, believes all things, hopes all things, endures all things.

      8Love never fails; but if there are gifts of prophecy, they will be done away; if there are tongues, they will cease; if there is knowledge, it will be done away. 9For we know in part and we prophesy in part; 10but when the perfect comes, the partial will be done away. 11When I was a child, I used to speak like a child, think like a child, reason like a child; when I became a man, I did away with childish things. 12For now we see in a mirror dimly, but then face to face; now I know in part, but then I will know fully just as I also have been fully known. 13But now faith, hope, love, abide these three; but the greatest of these is love.

If you want to give a gift, and it is wisely within your budget to do so, go ahead. But don’t do so because you “have to” or are “expected to”.  These gifts mean little and will ultimately have a very limited impact if you do not show love the way God tells us to. Often times just giving gifts on designated marketing holidays comes to be expected and not appreciated as much. If you choose to give an expensive gift, don’t do it because it is Valentines Day. Consider intentionally giving it at some other time besides the widely marketed holidays for an even greater impact.

Warning… when you make changes in how you celebrate these marketing holidays, discuss it openly with your spouse ahead of time! Don’t surprise someone by not giving them something they already expect from years of habit.

When you are ready to truly grow in maturity, turn towards God’s definition of love and begin showing it today to those you love. No warning necessary. They will greatly appreciate how you treat them. However, you may consider sharing the scripture with your spouse and helping one another as you both make the effort to shift focus from the world’s definition of love to God’s.

You can also ask yourself, if I am celebrating love, would it not be right to celebrate loving God as well as loving one another? And to come in thanksgiving to Him for all the love He has shown, shows, and will show us? If we are to focus on love in the Biblical sense, Valentine’s Day just does not match up very well at all. If you explore the origins of this celebration you will find that once again the Catholic church embraced this festival, but it was based first on a pagan celebration. As followers of Christ, we are better off not letting these pagan holidays dictate how we show love for our spouse or loved ones. Instead, love people the way God teaches.

(World Religion News: Pagan origin of Valentines day)

One last parting thought… we can love YHWH and love others because He has first shown me love. Yeshua died for us to make a way for us to be forgiven our sins.

John 15:12-13

      12“This is My commandment, that you love one another, just as I have loved you. 13“Greater love has no one than this, that one lay down his life for his friends.

The best way to show love for one another is through how we treat one another every day of the year.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Guiding Framework, Treasures In Heaven

Will It Profit a Man to Gain the World But Lose His Soul?

In order to live by our values and achieve our goals in life, we must begin by clearly defining for ourselves not only our values and goals, but also the priority in which we place them relative to one another. These basics will establish the foundation for everything else.

Paul provides an excellent example. He had a set of talents and abilities that he used first to persecute followers of Christ. He killed and imprisoned them. He was zealous for God, but did not recognize Jesus as the Messiah. It affected the outcomes of his life greatly.

After meeting Jesus Christ on the road to Damascus, Paul lived a life that serves as a good portrait of one who lived submitted completely to Jesus Christ. His values and goals were transformed and redirected toward service to Jesus Christ. Paul truly died to self and took up his cross to follow after Christ.

Matthew 16:24-27

      24Then Jesus said to His disciples, “If anyone wishes to come after Me, he must deny himself, and take up his cross and follow Me. 25“For whoever wishes to save his life will lose it; but whoever loses his life for My sake will find it. 26“For what will it profit a man if he gains the whole world and forfeits his soul? Or what will a man give in exchange for his soul? 27“For the Son of Man is going to come in the glory of His Father with His angels, and WILL THEN REPAY EVERY MAN ACCORDING TO HIS DEEDS.

As he prepared to leave for Jerusalem, Paul met with local elders of the church to remind them about his personal life lived as example of one submitted to Christ. It was filled with hardship and uncertainty, but also hope and joy in all circumstances. Paul provides a good summary of how we should approach our lives submitted to Christ. We do well to read carefully as if Paul were writing this to us and try to apply it in our lives today.

Acts 20:17-38

Farewell to Ephesus

      17From Miletus he sent to Ephesus and called to him the elders of the church. 18And when they had come to him, he said to them,
“You yourselves know, from the first day that I set foot in Asia, how I was with you the whole time, 19serving the Lord with all humility and with tears and with trials which came upon me through the plots of the Jews; 20how I did not shrink from declaring to you anything that was profitable, and teaching you publicly and from house to house, 21solemnly testifying to both Jews and Greeks of repentance toward God and faith in our Lord Jesus Christ. 22“And now, behold, bound by the Spirit, I am on my way to Jerusalem, not knowing what will happen to me there, 23except that the Holy Spirit solemnly testifies to me in every city, saying that bonds and afflictions await me. 24“But I do not consider my life of any account as dear to myself, so that I may finish my course and the ministry which I received from the Lord Jesus, to testify solemnly of the gospel of the grace of God.

      25“And now, behold, I know that all of you, among whom I went about preaching the kingdom, will no longer see my face. 26“Therefore, I testify to you this day that I am innocent of the blood of all men. 27“For I did not shrink from declaring to you the whole purpose of God. 28“Be on guard for yourselves and for all the flock, among which the Holy Spirit has made you overseers, to shepherd the church of God which He purchased with His own blood. 29“I know that after my departure savage wolves will come in among you, not sparing the flock; 30and from among your own selves men will arise, speaking perverse things, to draw away the disciples after them. 31“Therefore be on the alert, remembering that night and day for a period of three years I did not cease to admonish each one with tears. 32“And now I commend you to God and to the word of His grace, which is able to build you up and to give you the inheritance among all those who are sanctified. 33“I have coveted no one’s silver or gold or clothes. 34“You yourselves know that these hands ministered to my own needs and to the men who were with me. 35“In everything I showed you that by working hard in this manner you must help the weak and remember the words of the Lord Jesus, that He Himself said, ‘It is more blessed to give than to receive.’”

      36When he had said these things, he knelt down and prayed with them all. 37And they began to weep aloud and embraced Paul, and repeatedly kissed him, 38grieving especially over the word which he had spoken, that they would not see his face again. And they were accompanying him to the ship.

As we consider this portrait of living for Christ, Paul reveals several key elements we should carefully consider and apply in our own lives, not matter what our work or ministry.

  • Serve God with humility, even through trials and tears.
  • Do not shrink from teaching truth and repentance, regardless of consequences to you personally.
  • Remember that our life’s purpose is not our own when we are submitted to Christ. Our purpose is to wholeheartedly seek after the work God assigns us to further His kingdom.
  • Be on guard for false teaching and those who would draw you away from Christ. The threat comes both from those outside the church as well as from among the church. People will pervert God’s word to draw disciples after themselves.
  • Do not cease to admonish one another so that we help one another to remain in Christ and in His truth.
  • In testing for false teaching, admonishing, and living for Christ we must look to God and to the word of God as our unchanging source of truth.
  • Work hard to provide for yourself and do not covet someone else’s wealth.
  • Help the weak.
  • Pray for one another in genuine love and concern. Create a community of brothers and sisters in Christ that truly love and care for each other.

Do not seek after wealth alone as your objective in life… your master. Ask yourself “How does this teaching from Paul apply to my life today?” and then take action to make any course corrections you need to live fully submitted to Christ. Pray humbly for our Father in heaven to help you.

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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, Plan Carefully and Seek Wise Advice

Are You As Smart As An Ant?

Are you as smart as an ant? Yes, I mean “a-n-t”, not “a-u-n-t”. This may seem like quite a silly question, but sadly many do not fare well in a practical comparison of the wisdom of the ant compared to their own behavior.

Proverbs 6:6-11

     6Go to the ant, O sluggard,
Observe her ways and be wise,

      7Which, having no chief,
Officer or ruler,

      8Prepares her food in the summer
And gathers her provision in the harvest.

      9How long will you lie down, O sluggard?
When will you arise from your sleep?

      10“A little sleep, a little slumber,
A little folding of the hands to rest”—

      11Your poverty will come in like a vagabond
And your need like an armed man.

While I have great compassion for those to whom bad situations or poverty has come, we do well to recognize that there are many times when it is of our own doing. If we blame others, we do not address the situation. Let us take a lesson from the ant and remind ourselves to plan ahead. Let us not live only in the “now”. Let us give up some pleasure now and trade it for hard work and self discipline. In many cases we can be much more prepared to deal with the challenges which may come our way.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Control Spending, Greed, Optimizing Life, Treasures In Heaven

Gaining the Right Perspective on Finances

1 Timothy 6 contains timeless wisdom for us to consider and apply in our lives. As you begin to read, consider that though the slave/master guidance may seem obsolete, perhaps you should consider it in regards to the employee/employer perspective as I believe it still applies in that context or others where you are subject to the proper authority.

1 Timothy 6

     1All who are under the yoke as slaves are to regard their own masters as worthy of all honor so that the name of God and our doctrine will not be spoken against. 2Those who have believers as their masters must not be disrespectful to them because they are brethren, but must serve them all the more, because those who partake of the benefit are believers and beloved. Teach and preach these principles.

      3If anyone advocates a different doctrine and does not agree with sound words, those of our Lord Jesus Christ, and with the doctrine conforming to godliness, 4he is conceited and understands nothing; but he has a morbid interest in controversial questions and disputes about words, out of which arise envy, strife, abusive language, evil suspicions, 5and constant friction between men of depraved mind and deprived of the truth, who suppose that godliness is a means of gain. 6But godliness actually is a means of great gain when accompanied by contentment. 7For we have brought nothing into the world, so we cannot take anything out of it either. 8If we have food and covering, with these we shall be content. 9But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. 10For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith and pierced themselves with many griefs.

      11But flee from these things, you man of God, and pursue righteousness, godliness, faith, love, perseverance and gentleness. 12Fight the good fight of faith; take hold of the eternal life to which you were called, and you made the good confession in the presence of many witnesses. 13I charge you in the presence of God, who gives life to all things, and of Christ Jesus, who testified the good confession before Pontius Pilate, 14that you keep the commandment without stain or reproach until the appearing of our Lord Jesus Christ, 15which He will bring about at the proper time—He who is the blessed and only Sovereign, the King of kings and Lord of lords, 16who alone possesses immortality and dwells in unapproachable light, whom no man has seen or can see. To Him be honor and eternal dominion! Amen.

      17Instruct those who are rich in this present world not to be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy. 18Instruct them to do good, to be rich in good works, to be generous and ready to share, 19storing up for themselves the treasure of a good foundation for the future, so that they may take hold of that which is life indeed.

      20O Timothy, guard what has been entrusted to you, avoiding worldly and empty chatter and the opposing arguments of what is falsely called “knowledge”— 21which some have professed and thus gone astray from the faith.
Grace be with you.

We are to treat one another with respect and not enmity, whether boss or employee, slave or master. We do so to shine the light of Christ for others.

We brought nothing into this world and we can take nothing out. Let us be rich in good works. Let us be content, even joyful, with what we have. Let us guard ourselves against the love of money, which is the root of all sorts of evil.

Store up treasure in heaven rather than a bank, though this is not saying to spend and give away all you have. Indeed, we will have nothing to help others if we give all we have away. We should steward it carefully and thus do many good works in the name of Christ.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Ethics, Treasures In Heaven

How Should We Treat Others in Business and Finance?

Many people consider business and finance to be separate environments in which it is expected that people are aggressive or deceptive with one another in order to “get ahead”.

Is it ok to take advantage of people in business and finance? Is it ok to deceive someone to get them to buy your product? Is it ok to give poor advice as a financial consultant to sell the products your company wants you to sell?

Simply put, and hopefully obvious to you by now… the answer is “No. It is not right to take advantage of others.”

Jesus has a way of simplifying key concepts to help us remember and apply them to our lives. Many of us have heard of the “Golden Rule”, though it may surprise quite a few that it originates from Jesus Christ in Matthew 7:12.

12“In everything, therefore, treat people the same way you want them to treat you, for this is the Law and the Prophets.

This scripture matches closely with Matthew 22:37-40.

 37And He said to him, “ ‘YOU SHALL LOVE THE LORD YOUR GOD WITH ALL YOUR HEART, AND WITH ALL YOUR SOUL, AND WITH ALL YOUR MIND.’ 38“This is the great and foremost commandment. 39“The second is like it, ‘YOU SHALL LOVE YOUR NEIGHBOR AS YOURSELF.’ 40“On these two commandments depend the whole Law and the Prophets.”

In the context of Matthew 7:12, Jesus is addressing how His disciples should treat one another. He is not referring to our relationship with God. In Matthew 22:37-40, He addresses both our relationships with God and with one another.

Jesus calls us to help one another and to deal respectfully and honestly with one another whether we are at church, in our family or at work.  If we know more about a certain area than someone else (e.g. financial investing, selling phones or computers, etc.), it is an opportunity to help them. We each have different gifts and abilities. Jesus wants us to use them to help one another, not to convince them to buy the wrong product for them so we get a higher commission.

Is it ok to take advantage of non Christians? Again… a decisive “No.” What a great opportunity to show non Christians what we, as followers of Christ, are all about. Help them in matters of business and finance rather than trying to take advantage of them to make more money for yourself.

Jesus really has a way of simplifying things so we can remember. Do unto others as you would have them do unto you. So simple, we can teach it to children, but the challenge is for us as adults to consistently apply it to all aspects of our lives.

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

Control Debt

Do Not Pledge for Others’ Debt More than You Are Willing to Give Them

We are all accountable to the Father for all the resources He entrusts to us. Let us not be foolish and careless in how we manage what He has provided us.

We ought to take seriously any and all debt we incur directly or indirectly for which we can be held accountable. Let us not be hasty in participating in the debt of others, whether neighbor or stranger, in a way in which we may be accountable to repay it. We are wise to consider that any debt risk we expose ourselves to should not exceed that which we are willing to lose or give away. We must not make assumptions that any particular individual will “definitely” pay back a debt they incur, even if members of our own family.

Proverbs 6:1-5

Parental Counsel

      1My son, if you have become surety for your neighbor,
Have given a pledge for a stranger,

      2If you have been snared with the words of your mouth,
Have been caught with the words of your mouth,

      3Do this then, my son, and deliver yourself;
Since you have come into the hand of your neighbor,
Go, humble yourself, and importune your neighbor.

      4Give no sleep to your eyes,
Nor slumber to your eyelids;

      5Deliver yourself like a gazelle from the hunter’s hand
And like a bird from the hand of the fowler.

I encourage you to take this scripture quite literally. If you are “on the hook” for debt incurred by your neighbor, family member, or stranger such that you have to pay if they default… look for ways to quickly get out of the situation. You should only offer up what you are willing to give or lose in these types of situations. Never offer up your guarantee or cosign for a debt on the confident assumption you will never have to pay it.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Ethics, Greed, Optimizing Life

Should I Put My Trust in Money?

We all face times when we feel like things are not going well and others are against us. David certainly had times when he experienced many enemies plotting against him. Even if all others had abandoned him, he knew he could find refuge in his heavenly Father.

No matter what comes against you, trust in the LORD. Do not put your trust in oppression, robbery, or taking advantage of others. If riches increase, do not set your heart upon them either, but only in the LORD. God is the answer to our needs, not money. He may use money, but we should seek Him first rather than money.

Psalm 62

God Alone a Refuge from Treachery and Oppression.

For the choir director; according to Jeduthun. A Psalm of David.

      1My soul waits in silence for God only;
From Him is my salvation.

      2He only is my rock and my salvation,
My stronghold; I shall not be greatly shaken.

      3How long will you assail a man,
That you may murder him, all of you,
Like a leaning wall, like a tottering fence?

      4They have counseled only to thrust him down from his high position;
They delight in falsehood;
They bless with their mouth,
But inwardly they curse.

        5My soul, wait in silence for God only,
For my hope is from him.

      6He only is my rock and my salvation,
My stronghold; I shall not be shaken.

      7On God my salvation and my glory rest;
The rock of my strength, my refuge is in God.

      8Trust in Him at all times, O people;
Pour out your heart before Him;
God is a refuge for us.

Selah.

      9Men of low degree are only vanity and men of rank are a lie;
In the balances they go up;
They are together lighter than breath.

      10Do not trust in oppression
And do not vainly hope in robbery;
If riches increase, do not set your heart upon them.

      11Once God has spoken;
Twice I have heard this:
That power belongs to God;

      12And lovingkindness is Yours, O Lord,
For You recompense a man according to his work.

I would encourage each of us as well, no matter how dire our situation may seem, even if we feel completely alone… trust in God. Pour out your heart before Him.

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Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Ethics, Greed

Do Not Deceive Others in Your Financial Matters

I find it fascinating as I read the Bible what I may find in what seems like the strangest places. Many Christians and churches will never venture into Leviticus in their Bibles, but we do well to remember that all scripture is god inspired and good to direct our path.

2 Timothy 3:14-16

14You, however, continue in the things you have learned and become convinced of, knowing from whom you have learned them, 15and that from childhood you have known the sacred writings which are able to give you the wisdom that leads to salvation through faith which is in Christ Jesus. 16All Scripture is inspired by God and profitable for teaching, for reproof, for correction, for training in righteousness; 17so that the man of God may be adequate, equipped for every good work.

Paul was referring to the Old Testament as the New Testament was not written yet. It is not obsolete. There is treasure in there that is very applicable today.

The chapters that precede Leviticus 6 discuss various offerings to be made as part of reconciling to God for our sin or guilt. Leviticus 6 reminds of the need to also reconcile with people whom we have sinned against. It also provides a very tangible incentive to discourage the actions described that come about from greed or coveting and represent sin against God and fellow man.

We can clearly see that God does not want us to deceive one another in regards to money. He wants us to deal fairly with one another and treat one another with respect. We are to help one another rather than take advantage of others who may not know better about a certain situation.

Leviticus 6:1-7

Guilt Offering

      1Then the LORD spoke to Moses, saying, 2“When a person sins and acts unfaithfully against the LORD, and deceives his companion in regard to a deposit or a security entrusted to him, or through robbery, or if he has extorted from his companion, 3or has found what was lost and lied about it and sworn falsely, so that he sins in regard to any one of the things a man may do; 4then it shall be, when he sins and becomes guilty, that he shall restore what he took by robbery or what he got by extortion, or the deposit which was entrusted to him or the lost thing which he found, 5or anything about which he swore falsely; he shall make restitution for it in full and add to it one-fifth more. He shall give it to the one to whom it belongs on the day he presents his guilt offering. 6“Then he shall bring to the priest his guilt offering to the LORD, a ram without defect from the flock, according to your valuation, for a guilt offering, 7and the priest shall make atonement for him before the LORD, and he will be forgiven for any one of the things which he may have done to incur guilt.”

As the Holy Spirit reveals to us our sin, we must seek to reconcile ourselves with our heavenly Father to be sure, but also seek to reconcile ourselves with those whom we have sinned against.

Remember that all you have belongs to God. Manage your money God’s way and use it for His glory rather than your own. Visit GrowGodsMoney.org .

Control Debt, Generate Income, Plan Carefully and Seek Wise Advice, Proverbs

Parental Counsel from Solomon

For those who do not know Solomon, he was a man uniquely gifted with wisdom by God. He wrote proverbs a few thousand years ago now and his observations and counsel are as valid today as they were then.

Here is some of his advice from Proverbs 6.

We should be very cautious when we pledge, with our money or resources to back it up, on behalf of someone else who is struggling to manage their money. (If they were not struggling, they would not need our help.) Do not risk in this way anything you are not willing to lose if circumstances do not work out.

Proverbs 6:1-5

      1My son, if you have become surety for your neighbor,
Have given a pledge for a stranger,

      2If you have been snared with the words of your mouth,
Have been caught with the words of your mouth,

      3Do this then, my son, and deliver yourself;
Since you have come into the hand of your neighbor,
Go, humble yourself, and importune your neighbor.

      4Give no sleep to your eyes,
Nor slumber to your eyelids;

      5Deliver yourself like a gazelle from the hunter’s hand
And like a bird from the hand of the fowler.

We must be diligent and take personal responsibility for our future needs. Do not rely on someone else or make excuses to put off getting started. The most important aspect of completing a journey is beginning it properly and at the right time. In this way we prepare wisely for our future and will also be better prepared to help others along the way.

Proverbs 6:6-8

      6Go to the ant, O sluggard,
Observe her ways and be wise,

      7Which, having no chief,
Officer or ruler,

      8Prepares her food in the summer
And gathers her provision in the harvest.

Sloth, or laziness, is a sure way to end in poverty and need. There are other ways to find poverty, but sloth is one that almost assures it.

Proverbs 6:9-11

      9How long will you lie down, O sluggard?
When will you arise from your sleep?

      10“A little sleep, a little slumber,
A little folding of the hands to rest”—

      11Your poverty will come in like a vagabond
And your need like an armed man.

God considers those who are wicked and perverse to be worthless. They may feel like they are “winning” and “being successful” at their wicked endeavors, but in the end they will face God’s judgment. Often there deceitful ways catch up with them in this life as well, bringing calamity without healing.

Proverbs 6:11-15

      12A worthless person, a wicked man,
Is the one who walks with a perverse mouth,

      13Who winks with his eyes, who signals with his feet,
Who points with his fingers;

      14Who with perversity in his heart continually devises evil,
Who spreads strife.

      15Therefore his calamity will come suddenly;
Instantly he will be broken and there will be no healing.

Be wise in the ways of God rather than man. Seek to reflect on this wisdom from Solomon and apply it in your life. Do not just read it and say… “that is true, someone needs to hear that”. Instead, prayerfully ask God to help reveal to you any areas that you need to address personally in your life… and go start to fix them. Then consider if there are others you know that need help in this area. They will learn more from your example than from your words.

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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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