Tuesday, June 10, 2008

Biblical Perspective of a Long Term Investor

The Bible talks about the long term investor. Proverbs 13:22 states:

"A good man leaves an inheritance to his children's children, but a sinner's wealth is stored up for the righteous."

This means that:
  • A solid investment plan will pass the test of time even to the grandchildren.
  • A biblical perspective financial steward will prosper while those with the opposite perspective will act in a manner to lose money.
  • Who gains the money? The person who has a biblical perspective financial steward.

A great idea for a grandparent who has a grandchild is to start a Uniform Gift to Minors Act, UGMA, account for this child. This act sets up the grandchild for college or a first house or retirement. If you give $5,000 to a grandchild at birth it can grow to a large amount with time.

Example: A UGMA account with $5,000 that doubles every 10 years will double 7 times by retirement.

$5,000 doubles to $10,000

$10,000 doubles to $20,000

$20,000 doubles to $40,000

$40,000 doubles to $80,000

$80,000 doubles to $160,000

$160,000 doubles to $320,000

$320,000 doubles to $640,000

Having money that grows with a long term focus can yield great wealth.

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