Biblical Investing Advice

Ecclesiastes 11

2Divide your gifts among many, for you do not know what risks might lie ahead. (Ecclesiastes 11:2, NLT)


The Daily DAVEotional

The Bible has a lot to say about money and wealth. Despite what many people in our culture think today, the Bible doesn’t condemn wealth or making money. Actually, Jesus himself encourages the wise steward  to multiply the resources entrusted to him/her by God and to seek to make a profit. I’ve written a number of blog posts on the subject of whether wealth is immoral. You can read my previous posts here, here and here.  Additionally, I wrote about God’s stance towards the rich here.

Though the Bible encourages people to make a profit and to multiply their financial resources, it doesn’t give a lot of guidance on how exactly we’re supposed to do that. When it comes to investing, the Bible has little to say that will yield any specific steps or strategies to guide us.

There is one verse however, that gives some financial wisdom on the topic of investing, and it’s found in Ecclesiastes 11:2.

In this verse, Solomon tells us to divide our “gifts” among many in order to hedge against risk.

What’s he talking about?

I like the way the NIV states this verse. It says it this way:

2Give portions to seven, yes to eight, for you do not know what disaster may come upon the land. (Ecclesiastes 11:2, NIV)

In this verse, Solomon is encouraging the reader to divide his investments into 7 or 8 different portions. Essentially, he’s encouraging the reader to diversify their assets in order to hedge against a potential disaster.

I found a blog post by Alice A. Anacioco to be especially helpful. She explains this passage this way:

You may be surprised to read King Solomon offering financial counsel as he nears the end of Ecclesiastes. But accordingly, Solomon was deeply involved in international trades with merchants. And just like today, one of the main trade commodities was grain.

The merchants of Solomon’s day would load their grains on ships and send them off. But instead of loading all of their grains in just one ship, he tells his merchants to put them in several ships and send them out in a diversified way so that if one of the ships should sink, he would not lose everything.

The main advice the Bible gives when it comes to investing is to diversify your investments. The idea is to spread your money out among different types of assets so that if one type of asset is negatively impacted by an economic event, the other assets may be unaffected and as a result, the entire portfolio will not be completely devastated.

Be careful though. Many people assume they are following this advice because they have placed their investment money into mutual funds. Many financial advisors will advise their clients to diversify their stock portfolio among many different stocks so that if one company performs badly, the positive performances of the other stocks may shield the portfolio from being completely torpedoed.

Mutual funds provide some level of inherent diversity because a mutual fund is already a portfolio of many stocks. Hence, if one company within the fund goes down, other companies may go up and thus the value of the fund may go up as well despite the poor performance of one or a few companies.

But being invested in a number of stocks or even mutual funds does not mean you are diversified. To truly be diversified and hedged against disastrous economic events, one needs to have their funds invested in different asset classes altogether.

Think about it. Stocks and mutual funds are part of the same asset class. When the market crashed in 2000 due to the dotcom bubble bursting, many people who had all their money in the stock market had their entire portfolio decimated. Again, in 2008 when the market crashed as a result of the real estate bubble bursting, many who were “diversified” because they owned many different stocks or mutual funds took major hits to their bottom line.

I have heard and seen too many stories of people who had their entire nest egg cut in half or worse by one of these two market events. And for those who were in retirement when it happened, the results have been disastrous. There simply is no time to rebound from these market crashes when you’re already taking disbursements during retirement.

Solomon’s advice is basically “don’t put all your eggs in one basket”. So if you really want to diversify, don’t have all your money in stocks and mutual funds. Invest in other assets as well (such as real estate, precious metals, commodities, etc.) That way, if the stock market crashes, as it inevitably will do, only a portion of your entire portfolio will be affected. And who knows, even while the market is crashing, perhaps the other assets will be unaffected or even increase. You may find that you are gaining overall instead of losing it all.

Reflection

What is or has been your investing strategy?

What steps have you taken or are you taking to diversify your financial portfolio?

Besides stocks and mutual funds, what are some other asset classes you could invest in to begin to create a truly diversified portfolio?

 

Photo by Precondo CA on Unsplash

 

Is Wealth Immoral? (Part 3)

Ecclesiastes 5

10Those who love money will never have enough. How absurd to think that wealth brings true happiness! 11The more you have, the more people come to help you spend it. So what is the advantage of wealth—except perhaps to watch it run through your fingers!

12People who work hard sleep well, whether they eat little or much. But the rich are always worrying and seldom get a good night’s sleep.

13There is another serious problem I have seen in the world. Riches are sometimes hoarded to the harm of the saver, 14or they are put into risky investments that turn sour, and everything is lost. In the end, there is nothing left to pass on to one’s children. 15People who live only for wealth come to the end of their lives as naked and empty-handed as on the day they were born.

16And this, too, is a very serious problem. As people come into this world, so they depart. All their hard work is for nothing. They have been working for the wind, and everything will be swept away. 17Throughout their lives, they live under a cloud—frustrated, discouraged, and angry.

18Even so, I have noticed one thing, at least, that is good. It is good for people to eat well, drink a good glass of wine, and enjoy their work—whatever they do under the sun—for however long God lets them live. 19And it is a good thing to receive wealth from God and the good health to enjoy it. To enjoy your work and accept your lot in life—that is indeed a gift from God. 20People who do this rarely look with sorrow on the past, for God has given them reasons for joy. (Ecclesiastes 5:10-20)


The Daily DAVEotional

You may have seen in the news recently that President Joe Biden has decided to implement a “wealth tax” in his next proposed budget. The idea would be to tax those who make over $100 million a minimum of 20%.

Predictably, some are heralding this move as a positive step as it’s “about time the rich pay their fair share” while others have noted that the majority of taxes collected by the IRS are already paid by the rich, so what is the limit of what is fair?

My point is not to take a side in this particular legislation but to demonstrate that we live in an era where it has become fashionable by many, including Christians, to decry wealth as being immoral. Jesus himself seemed to care for the underserved and underprivileged so it is even asserted by some that Jesus was against wealth.

I wrote about this last year in a series of posts here and here. The problem for Christians who think that wealth is immoral is that there is nowhere in Scripture where wealth is actually condemned. Additionally, many righteous men and women of faith were people of great means.

I explain how these ideas are reconciled biblically in the previous posts but here, in today’s passage, Solomon, one of the wealthiest men in the Biblical record, helps us understand more deeply God’s view of wealth.

Here are some of the highlights:

    • Solomon doesn’t condemn wealth. He himself was EXTREMELY wealthy. But he does point out that the LOVE of money is futile because it cannot bring true happiness (verse 10).
    • One problem that comes along with great wealth is that others come to help you spend it. Many lottery winners have commented on how much more stressful life became when they hit it big. Not only was there the worry of how to keep what they have won but suddenly, everyone you’ve ever known shows up wanting a piece of the pie (verse 11).
    • People who have great wealth can sometimes lose it all because, as Solomon points out, the money is put into risky investments (verses 13-14). How many sad stories are told of athletes who made millions while playing but who are living in poverty because they didn’t know how to manage their money?

Solomon’s admonition against the dangers of wealth can be summed up in verse 15:

People who live only for wealth come to the end of their lives as naked and empty-handed as on the day they were born.

Notice that Solomon doesn’t condemn wealth but warns against “living only for wealth”. This is another way of describing greed. The problem with living only for wealth is that you can’t take it with you. Wealthy people will die with nothing just as everyone else does. Jesus made this same point in the Luke 12 passage that I blogged about here.

Solomon ends his short discourse by actually saying that receiving wealth from God is a GOOD thing. He declares that wealth and the good health to enjoy it is a gift from God.

It seems clear from Scripture that wealth in and of itself is not bad. The real issues that are problematic are greed and envy. These two sinful vices are not reserved for the wealthy alone but for anyone regardless of your financial position.

Whatever your net worth is, the biblical admonition is to be content, not envying what others have or being greedy for more of what you think might make life more comfortable and enjoyable.

We should heed Solomon’s admonition to “enjoy your work and accept your lot in life….People who do this rarely look with sorrow on the past, for God has given them reasons for joy.” (Ecclesiastes 5:19-20)

Reflection

On a scale of 1-10, how would you rate your contentment with your current financial position?

Do you think money can bring true happiness? What are you relying on to provide happiness in your own life?

Do you agree with Solomon’s statement that people should enjoy their work and accept their lot in life? Why or why not?

What does it look like to “live only for money”? Have you ever had this attitude or disposition towards money?

When was a time when you experienced feelings of greed or envy? How can you ensure that your own heart motivations towards money and wealth are godly?

 

Photo by David McBee: https://www.pexels.com/photo/bitcoins-and-u-s-dollar-bills-730547/

Is Wealth Immoral? (Part 2)

1 Timothy 6

6Yet true religion with contentment is great wealth. 7After all, we didn’t bring anything with us when we came into the world, and we certainly cannot carry anything with us when we die. 8So if we have enough food and clothing, let us be content. 9But people who long to be rich fall into temptation and are trapped by many foolish and harmful desires that plunge them into ruin and destruction. 10For the love of money is at the root of all kinds of evil. And some people, craving money, have wandered from the faith and pierced themselves with many sorrows. (1 Timothy 6:6-10, NLT)

Ecclesiastes 11

1Give generously, for your gifts will return to you later.
(Ecclesiastes 11:1, NLT)


The Daily DAVEotional

Yesterday, I posted here about a passage on wealth from Luke 12, in which Jesus tells a story calling a rich person foolish because he tore down his barns to build bigger barns so he would have a place to store his massive amounts of material possessions.

My post sought to address the issue of whether Jesus was condemning wealth in His story.

You see, there’s a lot of talk about equity these days and one of the areas where people are seeing inequity is in the wide array of financial positions held by people in our society. Some people are poor and some people are extremely rich, and a lot of people are somewhere in between.

In our very polarized society, it’s become fashionable to point to those who have extreme amounts of wealth and declare it to be immoral. It is assumed or implied that the only way people could have that much money is because of greed. To be fair, not everyone is directly declaring it to be immoral, but using words like “insane”, “outrageous”, “crazy” and “unnecessary” to describe the amount of wealth some people have makes the same point. Whether expressed directly or indirectly, many people are offended by the amount of wealth that some people have.

But is it immoral to be wealthy? Was Jesus, in his story, condemning wealth? You can read the details and explanation of my response here but the short answer is no, I do not believe Jesus was condemning wealth. What He was condemning was greed.

As if to reinforce that point, a portion of my reading today consisted of the passages above, which also speak to the issues of money, wealth and greed.

In 1 Timothy 6, Paul speaks to the need for contentment and then follows with a warning of the dangers that exist for people who “want to get rich”. Paul is speaking about greed.

Paul says that when people are greedy they find themselves “trapped by many foolish desires that plunge them into ruin and destruction.” There are many examples of how this could play out but I initially think of a person who, in their hopes of making a big score, wastes all of their money playing the lottery or gambling.

The key verse in this passage is verse 10, where Paul says “the LOVE of money is at the root of all kinds of evil.”

Notice that Paul doesn’t say that money is evil. He says that the love of money is the problem. He continues by saying that many who crave money have wandered away from the faith. To “crave money” is another way of describing greed.

Just as Jesus’ story in Luke 12 was predicated on His warning to not be greedy, this passage from Paul also is delivered primarily as a warning against greed, not a condemnation of wealth.

As was stated in yesterday’s post, wealth is simply a tool. It is neither good nor bad, but can be used for good and honorable purposes or it can be used for evil and destructive purposes.

The Ecclesiastes verse above is a reminder that we are to be generous no matter how much money we have. If you have a lot of money, you have the opportunity be extremely generous.

Most of us are not in that extremely wealthy category, so it’s easy to look at those who have more than enough and wonder, “how can they possess so much money?” We might even begin to entertain the idea that it’s unfair and unjust, which is just a small step away from deciding that it’s immoral.

But be careful. Jesus doesn’t condemn wealth per se and as I demonstrated yesterday, there are many biblical figures who were, in fact, quite wealthy. How do we reconcile these truths if God is against wealth?

Instead of pointing to those who have more than enough and calling it unfair or even immoral, we should check our own heart and motives first. Greed is not a sin that just afflicts the rich. Anyone, from any socio-economic background can be lured by greed. However, those of us who aren’t rich can often cloak our greed by attempting to disguise our envy as justice.

Reflection

What do you think is the difference between greed and envy? When have you struggled with greed or envy in the past?

Paul warns of the dangers of “craving money”. When have you craved money, or any other material possession?

What examples can you think of in your own life or circle, where someone was “plunged into ruin and destruction” because of their “love for money”?

What steps can you take to avoid or resist greed and envy?

Do you agree or disagree with the idea that some people may attempt to point to extreme wealth as a sort of attempt to right an “injustice” when they may be simply expressing their own greed in the form of envy? Explain your view.

 

Photo by Tima Miroshnichenko from Pexels