This article was written by my CFAN colleague, Anil Chacko.
Jun 23
Written By Anil “Neil” Chacko CFP®, CKA®
As Christians, one of our core beliefs is that the Holy Bible is the infallible Word of God. In fact, God’s word tells us:
“All scripture is breathed out by God and is profitable for teaching, for reproof, for correction, and for training in righteousness.”
2 Timothy 3:16
We also believe that God owns everything and our role is to be stewards that responsibly manage the resources entrusted to us by God:
“For the earth is the Lord’s and everything in it; the world and those who dwell in it.”
Psalms 24:1
The Bible is full of wisdom that is relevant in all eras. Money and money management, in fact, is a topic that is abundantly covered in scripture. In fact, there are over 2,350 verses that have to deal with money and the topic of money management represents a significant portion of Jesus’ teachings. Based on all of this, we can surmise that this is an important topic to God. Jesus told us in Matthew 6:21 “For where your treasure is, there your heart will be also.”
There are many verses that specifically discuss the importance of saving. For instance, when Joseph interprets Pharaoh’s dream in Genesis 41:28-39, he discusses the importance of saving one-fifth of the produce of the land of Egypt during the seven years of plenty so that when the seven years of famine arrive, there will be a reserve available. This is a great lesson teaching us of the importance of an “emergency fund.”
The Word on Investing
However, what does the Bible say about investing? There are plenty of references to investing within the Bible. However, we are to first have a healthy attitude towards investing. What is the purpose of the investment? Why are we looking to grow this money? Ecclesiastes 5:10-15 teaches us that we are not to love money and pursue gains simply for the sake of gaining wealth. Verses 13-15 warns us of riches lost in a bad venture, or investment, by a man who desired to be rich. In the New Testament, Paul warns us of the dangers of loving money or seeking to be rich:
“Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into run and destruction”
1 Timothy 6:9 (NIV)
There is nothing wrong with becoming rich as we discussed in a previous blog. However, it should be a by-product of being faithful.
In the parable of the Talents (Matthew 25:14-30), Jesus teaches about a man who went away and entrusted his servants with some of his wealth. The faithful stewards doubled what they were entrusted with while the foolish servant hid it and gave back only the money he was entrusted with. The master, in this parable, is God our Father.
This parable teaches us that we are to invest the resources we are provided with by our Master for the Master. The stewards that doubled what they were given were praised by the master and one was given even more because they did what the Master would have wanted them to do with what He provided.
There are going to be goals in life that will require getting a higher rate of return than what a savings account will provide. These longer-term goals, such as saving for a time when you can no longer work or saving for your children’s college education, may require investing to get the possibility of a higher rate of return. Investing involves many risks, one of which is the loss of some or all of your investment. The Bible gives good counsel in this regard as well:
It’s Wise to Diversify
“Cast your bread upon the waters, for you will find it after many days. Give a portion to seven or even to eight, for you know not what disaster may happen on earth.”
Ecclesiastes 11:1-6
This verse tells us of the importance of diversification. By investing in various types of assets such as U.S. and international stocks(large-caps, mid-caps and small-caps), bonds, real estate, gold, etc., we can spread the risk of loss. Each investment has its own advantages and disadvantages and what may be a prudent investment for one person could be an unsuitable one for someone else.
If you are unsure of how best to invest for your own goals, one of our advisors would be happy to help guide you.
Living Beneath Your Means and Investing Regularly
The Bible also tells us that we should be steady plodders when it comes to investing. A fundamental principle for becoming a successful investor is to spend less than you earn and invest some of the surplus:
“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”
Proverbs 13:11
I have witnessed firsthand many of my older clients who saved and invested a small portion of their paycheck year after year and are now millionaires in their 60’s and 70’s due to this diligent saving.
As investments grow, however, scripture also warns us not to be conceited or to trust in our savings but to continue to trust in the Lord:
“As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy.”
1 Timothy 6:17
Thus, our focus should always be upon God because we can only find real financial security when we have a relationship with Him. Jesus told us:
“I am the vine, you are the branches. Whoever abides in me and I in him, he it is that bears much fruit, for apart from me you can do nothing.”
John 15:5
As we have seen, the Bible has timeless and relevant wisdom for a vast number of areas and that includes saving and investing. As Christians, the Word of God should be the foundation upon which we build our lives. Thus, it is imperative to know what God’s word says about all aspects of living.
If you would like additional guidance in living out God’s word with your finances, contact one of our advisors today.
Anil (Neil) Chacko is a financial advisor at Ark Alliance Financial. Anil helps provide purpose driven life planning and values based investing to his clients.