Biblical Perspective on Paying Yourself First

The last topic in this series on the Bible and financial teaching is the importance of paying yourself first. A verse on this principle is Ecclesiastes 11:6.

"Sow your seed in the morning, and at evening let not your hands be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well."

The key part of this verse is sow your seed in the morning. If you want a crop you must plant seeds and these seeds have a defined growing season. If you never plant the seeds you never get a crop. Since it takes a fixed amount of time for a seed to grow to a mature plant the earlier you plant the seed the sooner you get to a mature plant.

When you have been given money, invest a portion of it and give it time to grow. The more seeds you plant the bigger the harvest.

Investments take time to grow so start investing now.

Biblical Perspective on Paying Yourself First

The last topic in this series is the Bibli

Biblical Perspective on Diversification

What does the Bible teach on the importance of diversification for your investment portfolio. The best verse on this topic is Ecclesiastes 11:2.

"Give portions to seven, yes to eight, for you do not know what disaster may come upon the land."

This verse states that nobody can not predict the future and can not predict when an investment will run into a problem. Since we do not know the future the best way to keep you portfolio on a more even keel and in the correct direction is to diversify into 7 or 8 investments rather than have a single investment.

In today's terms this has been called Modern Portfolio Theory. Here are some specifics on this theory.

• Harry Markowitz won Nobel Peace Prize in Economics in 1990 for his theory published in 1950.
• Principal of Co-Variance: Risky higher returning investments, each having their own variance, when combined in certain amounts will have an overall lower amount of risk and maintain higher returns.
• Example: Blend of International and US Equities give a better return and lower risk than just US Equities alone.
• Why is this important? Because money moves between stocks and bonds and between different parts of the world.

A Nobel Peace Prize winner has proven that what the Bible documents makes really good sense.

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.

Biblical Perspective of Financial Stewardship

The company name is Christian Stewardship Retirement derived from Bible based financial stewardship. What does the Bible say about Stewardship?

Proverbs 21:5 says "The plans of the diligent lead to profit as surely as haste leads to poverty."

What does this mean: Let's put the word steward for the word diligent and then this reads the plans of a steward lead to profit. A financial steward makes money the right way that leads to profit.

Matthew 25: 14-30 is known as "The Parable of the Talents." In this parable, 3 servants were given money or talents to invest for their master while he was gone.

• 1 servant was given 5 talents and returned 5 more for a total of 10 - a good and faithful servant
• 1 servant was given 2 talents and returned 2 more for a total of 4 - a good and faithful servant
• 1 servant was given 1 talent and hid it and returned the 1 talent - a wicked and lazy servant.
• The servant with 10 talents was given this 1 talent
• "For everyone who has will be given more and he will have an abundance. Whoever does not have, even what he has will be taken from him."

What does this mean: As a person learns stewardship it will lead to abundance. If you never learn stewardship, ultimately it results in a loss in wealth to those who know it.

If you are a good financial steward, Congratulations.

If you are not a good financial steward, you can either hire someone who is and gain from it or lose money. My advice is to hire someone who is and gain from it. It is your call. Send me a comment if you want to gain stewardship.