Tag: Solomon

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Is it Ok to CoSign on the Loan of Another Person?

Proverbs 6

1My child, if you co-sign a loan for a friend or guarantee the debt of someone you hardly know—2if you have trapped yourself by your agreement and are caught by what you said—3quick, get out of it if you possibly can! You have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. 4Don’t put it off. Do it now! Don’t rest until you do. 5Save yourself like a deer escaping from a hunter, like a bird fleeing from a net. (Proverbs 6:1-5, NLT)

The Daily DAVEotional

The Bible is a guidebook for living and the book of Proverbs, in particular, is written in order to provide instruction for living righteously and with “good conduct.” The author promises that those who read these Proverbs will grow in “wisdom and discipline.”

One area that is addressed throughout Proverbs is the area of finances and money management.

In this passage, Solomon advises the reader against the practice of co-signing a loan for another.

Solomon doesn’t mince words as he describes this scenario as a “trap” because you have placed yourself at your friend’s (or relative’s) mercy.

What does he mean and why does he say that? What’s the big deal?

Many people are unaware of the implications of co-signing a loan.

Co-signing a loan is not simply a matter of going into business with another person or becoming an equal investor in some financial venture.

When you cosign a loan with another person, you are essentially offering a guarantee to the bank that YOU will step in and honor the terms of the loan if the primary borrower cannot.

Co-signing a loan often occurs when the primary borrower (the signer) is deemed by the lender to be a credit risk, and therefore cannot qualify for a loan on their own for whatever they are purchasing.

There are any number of reasons why a person would not be able to qualify on their own for a loan.

One reason is that they don’t make enough money with their job to meet minimum standards the bank has set for income to debt ratios. In other words, based on basic loan standards, the monthly payment amount required for whatever loan the person might be seeking is too high relative to the amount of their monthly income. The bank has all kinds of statistics and predictors to evaluate various loan scenarios and they know that the higher percentage your payment is relative to your income, the more likely you are to default on a loan.

Another reason why a person might not be able to qualify for a loan on their own is because they have a poor credit history. A person’s credit score is a reflection of their ability to honor their financial commitments. Low credit scores often mean the person has missed payments in the past and/or they have too much personal debt. The lower your credit score, the more you are perceived by the lender to be a risky borrower – someone who has missed payments, made late payments or has completely defaulted on a loan.

So when a person finds themselves unable to borrow money, they may turn to a friend or relative to help them secure the loan by acting as a co-signer for the loan.

Solomon says that you shouldn’t put yourself in the position of being a cosigner. It’s incredibly foolish for a number of reasons.

When you co-sign a loan for another person, you are legally guaranteeing to the lender that if the primary borrower defaults, you will be responsible for the loan.

Why would anyone do that?

Think about it. If the bank won’t lend to the person on their own, why would they lend to them with you as a cosigner? The reason is because you have good credit and you are essentially vouching for the person in such a way that you’re putting yourself on the hook for that financial obligation should they default. If they are already deemed by the bank to be a person who cannot be relied upon to pay back a loan, they will STILL be unreliable even after you cosign. You will then be the guarantor for that loan.

In other words, cosigning a loan is incredibly foolish because there is a good chance it will become your legal obligation.

Horror stories abound when things go sideways after cosigning a loan. You may have creditors coming after you. Your wages could get garnished as creditors seek to recover unpaid payments, penalties and interest. Your credit score might get damaged as someone else’s debts and poor financial track record gets tied to you.

A poor credit score might impact your own ability to get a car loan or even buy a house, as lenders now view you as a borrowing risk, all because someone else decided that being financially responsible wasn’t important to them.

I know what you’re thinking…

“Shouldn’t we help people? Wouldn’t it be mean not to help a person who is in a bind? Shouldn’t we be Good Samaritans?”

Yes, it is a good thing to help people but not every course of action is helpful or wise. Helping another person does not mean you should do something foolish like guarantee their loan. Perhaps the best way to help a person is to force them to live in the reality of their financial situation.

Cosigning a loan for someone else has zero upside for the cosigner but the downsides are innumerable. This is why Solomon says it’s a trap. With absolutely no financial benefit to you, cosigning a loan has the potential to bring about tremendous personal financial ruin.

For a more complete list of possible downsides to cosigning a loan, see this article.

 

Did you enjoy this post? I’d love to hear your thoughts! Feel free to like, leave a comment below, and share it with your friends or on social media if you found it helpful or interesting. Your support keeps the conversation going!

 

Reflection

What are some reasons a person might ask you to cosign a loan?

On a scale of 1-10, how hard would it be for you to say no to a close friend or relative who asked you to help them by cosigning a loan?

If you gave a low value to the last question, meaning that it would be very difficult for you to say no to some people if they asked you for financial help by cosigning a loan, what options might be available to you to help ensure that you did not fall into this “trap”?

If a person were to come to you wanting you to cosign a loan (a friend or relative) what do you think are some options for helping them that would NOT require you to risk your own financial position by cosigning a loan?

Or put it another way….if you are the person in financial stress and you are wanting a loan that you cannot get, what options might be available to you BESIDES asking someone to cosign a loan for you?

 

Photo by RDNE Stock project: https://www.pexels.com/photo/close-up-photo-of-an-agreement-on-a-paper-7841821/

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Filling a God-Shaped Hole

Ecclesiastes 2

1I said to myself, “Come now, let’s give pleasure a try. Let’s look for the ‘good things’ in life.” But I found that this, too, was meaningless. 2“It is silly to be laughing all the time,” I said. “What good does it do to seek only pleasure?” 3After much thought, I decided to cheer myself with wine. While still seeking wisdom, I clutched at foolishness. In this way, I hoped to experience the only happiness most people find during their brief life in this world.

4I also tried to find meaning by building huge homes for myself and by planting beautiful vineyards. 5I made gardens and parks, filling them with all kinds of fruit trees. 6I built reservoirs to collect the water to irrigate my many flourishing groves. 7I bought slaves, both men and women, and others were born into my household. I also owned great herds and flocks, more than any of the kings who lived in Jerusalem before me. 8I collected great sums of silver and gold, the treasure of many kings and provinces. I hired wonderful singers, both men and women, and had many beautiful concubines. I had everything a man could desire!

9So I became greater than any of the kings who ruled in Jerusalem before me. And with it all, I remained clear-eyed so that I could evaluate all these things. 10Anything I wanted, I took. I did not restrain myself from any joy. I even found great pleasure in hard work, an additional reward for all my labors. 11But as I looked at everything I had worked so hard to accomplish, it was all so meaningless. It was like chasing the wind. There was nothing really worthwhile anywhere.

12So I decided to compare wisdom and folly, and anyone else would come to the same conclusions I did. 13Wisdom is of more value than foolishness, just as light is better than darkness. 14For the wise person sees, while the fool is blind. Yet I saw that wise and foolish people share the same fate. 15Both of them die. Just as the fool will die, so will I. So of what value is all my wisdom? Then I said to myself, “This is all so meaningless!” 16For the wise person and the fool both die, and in the days to come, both will be forgotten.

17So now I hate life because everything done here under the sun is so irrational. Everything is meaningless, like chasing the wind. 18I am disgusted that I must leave the fruits of my hard work to others. 19And who can tell whether my successors will be wise or foolish? And yet they will control everything I have gained by my skill and hard work. How meaningless!

20So I turned in despair from hard work. It was not the answer to my search for satisfaction in this life. 21For though I do my work with wisdom, knowledge, and skill, I must leave everything I gain to people who haven’t worked to earn it. This is not only foolish but highly unfair. 22So what do people get for all their hard work? 23Their days of labor are filled with pain and grief; even at night they cannot rest. It is all utterly meaningless.

24So I decided there is nothing better than to enjoy food and drink and to find satisfaction in work. Then I realized that this pleasure is from the hand of God. 25For who can eat or enjoy anything apart from him? 26God gives wisdom, knowledge, and joy to those who please him. But if a sinner becomes wealthy, God takes the wealth away and gives it to those who please him. Even this, however, is meaningless, like chasing the wind. (Ecclesiastes 2:1-26, NLT)

The Daily DAVEotional

Blaise Pascal, the famous 17th century French mathematician and inventor, is often credited with saying,

​There is a God-shaped vacuum in the heart of every man which cannot be filled by any created thing, but only by God, the Creator, made known through Jesus Christ.

Interestingly, Pascal never actually said this exact quote, though he did express the sentiment when he said,

“What else does this craving, and this helplessness, proclaim but that there was once in man a true happiness, of which all that now remains is the empty print and trace? This he tries in vain to fill with everything around him, seeking in things that are not there the help he cannot find in those that are, though none can help, since this infinite abyss can be filled only with an infinite and immutable object; in other words by God himself”

As it turns out, this sentiment from Pascal, which has been shortened into the pithy quote that we all see today, was probably derived from Solomon, who explored the nature of meaning and fulfillment in this second chapter of Ecclesiastes.

So what exactly does Solomon say?

It’s important to understand the context on which Ecclesiastes 2 rests. In chapter 1, Solomon is trying to derive meaning and purpose to our existence. His initial position, based on observations and lived experience, is that life is meaningless.

It’s a sad existence indeed if there is absolutely no purpose or meaning in life. Yet that is what Solomon initially concludes.

In this chapter of Ecclesiastes, we’re subjected to a bit of Solomon’s ontological journey.

The first thing he says is that he tried to find meaning and fulfillment in pleasure, or what we call hedonism. But physical pleasure provides no lasting satisfaction. The exhilarating rush that pleasure brings quickly fades, leaving one grasping for the next opportunity to experience that physical and emotional high.

Solomon then turns his attention to the pursuit of materialism. Perhaps acquiring lots of stuff, overseeing grand construction projects or building tremendous wealth could ascribe meaning and value to life. But Solomon found that lacking as well. The allure that extreme wealth promises is never quite  achieved. John Rockefeller, who was the richest person to ever live, was once asked, “how much is enough?” His response was “just a little bit more.” He apparently did not subscribe to Solomon’s conclusion that extreme wealth does not ultimately satisfy.

Perhaps fame and taking pride in one’s work could provide the kind of satisfaction that pleasure and materialism couldn’t. But Solomon ultimately realized the utter futility of that pursuit. Fame is fleeting and whatever work we may accomplish is forgotten as quickly as we are when we die.

Solomon reasoned that hard work and wealth are ultimately meaningless because we all die. What good are those things after you die? Someone else will take possession of and oversee all that we’ve worked to produce. That hardly seems fair. You work your tail off to produce wealth and build an empire only to leave it to someone else who did nothing to earn or produce what you’ve left?

None of this makes sense on the surface. What is the point?

Solomon gives a glimpse into the ultimate purpose in verses 24-25, when he says,

24So I decided there is nothing better than to enjoy food and drink and to find satisfaction in work. Then I realized that this pleasure is from the hand of God. 25For who can eat or enjoy anything apart from him?

Is pleasure, wealth, fame and work all meaningless? Apart from God, the answer is yes. But with God, all of these things are meaningful because they are gifts from God, the ultimate gift-giver!

So we’re back to our opening line that is often attributed to Pascal. There is something inside each person that is searching and striving for meaning and purpose. Man, in his fallenness, seeks to satiate this inner desire with all kinds of things – pleasure, power, wealth and fame. But none of these things bring true satisfaction or fulfillment. That’s because God is the only one who can ultimately fulfill our basic human need for meaning and purpose. It’s part of His design.

Apart from God there is no ultimate meaning and purpose. As Christian philosopher and apologist Frank Turek says, we are just “moist robots” who appear one day and then one day we’re gone.

If that is the case, then Solomon’s initial assessment is true – life is indeed meaningless. But with God, life not only has purpose and meaning but work, pleasure and wealth all make sense.

 

Did you enjoy this post? I’d love to hear your thoughts! Feel free to like, leave a comment below, and share it with your friends or on social media if you found it helpful or interesting. Your support keeps the conversation going!

 

Reflection

What do you turn to in order to experience purpose and meaning in life?

Which of the following do you struggle with the most: the pursuit of pleasure, wealth, power or fame?

What do you think are the reasons you or people in general pursue other things to satisfy their inner needs rather than pursuing God Himself?

In what ways can you turn to God as your source of true satisfaction and fulfillment?

 

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What Does it Mean to Have Eternity in The Human Heart?

Ecclesiastes 3

9What do people really get for all their hard work? 10I have thought about this in connection with the various kinds of work God has given people to do. 11God has made everything beautiful for its own time. He has planted eternity in the human heart, but even so, people cannot see the whole scope of God’s work from beginning to end. 12So I concluded that there is nothing better for people than to be happy and to enjoy themselves as long as they can. 13And people should eat and drink and enjoy the fruits of their labor, for these are gifts from God. (Ecclesiastes 3:9-13, NLT)

The Daily DAVEotional

In Ecclesiastes 3, Solomon contemplates the meaning and purpose of work by asking the question, “what do people really get for all their hard work?”

Solomon’s answer is interesting as he states that “people cannot see the whole scope of God’s work from beginning to end.”

Basically, people are too limited in their comprehension and their perspective to fully know and understand God and His purposes.

But in his response, Solomon uses an interesting phrase to make his point about meaning and purpose. He says that God “has planted eternity in the human heart,..”

What exactly does that mean?

I think it means that God has placed within people this innate understanding that we are eternal beings and that we have been created with purpose and meaning.

Think about it. Just the fact that Solomon is able to contemplate the purpose and meaning of work, as all humans are, is something that sets us apart from animals. We may not completely understand everything around us, like the purpose and meaning of our work, but we DO understand that there is something that sets us apart and gives us meaning and value.

Don Richardson, a famous missionary and author, takes this phrase even deeper. In his book “Eternity in their Hearts”, Richardson argues that within every people group and culture, God has placed a redemptive analogy that will enable them to understand and accept the gospel more readily.

In the book, he supports his premise with many stories of how the gospel has been communicated to various peoples and tribes.

In one story, he tells about the Sawi tribe of Indonesia. They were one of only a few tribes globally that practiced both head-hunting and cannibalism.

When they were approached by missionaries and the gospel story was communicated to them, there was a very unexpected response. The Sawi actually thought that Judas was the hero.

This was because the Sawi admired the characteristic of treachery. They would often deceive people into a friendship all the while they were only fattening their future victims.

The Sawi had an interesting tradition, however, to avoid acts of treachery from being performed on them. A Sawi chief would offer his child to another chief as a “peace child.” Acts of war and aggression would be avoided in the future because to attack that tribe might result in the death of your own son.

When the missionaries learned of this tradition, they had their redemptive analogy in hand. They then re-explained the gospel message,  presenting Jesus as the ultimate Peace Child. This time, the Sawi understood and they did not look at Judas as the hero, for to betray a Peace Child was considered the ultimate offense.

With this new understanding of Jesus, it wasn’t long before the Sawi accepted Jesus as their Peace Child.

So what does it mean that God has placed eternity in the human heart? At minimum, it means that people have an inner sense that we are not finite creatures and that we have been created by someone greater than us for a greater purpose.

This inner “understanding” means that the gospel message can be explained and understood by people around the world in a way that uniquely helps them understand the person and nature of Jesus as their Creator and Savior.

 

Did you enjoy this post? I’d love to hear your thoughts! Feel free to like, leave a comment below, and share it with your friends or on social media if you found it helpful or interesting. Your support keeps the conversation going!

 

Reflection

What do you think it means that God has placed eternity in the human heart?

Author Don Richardson contends that God has placed a redemptive analogy within each people group to make the gospel more readily understandable and acceptable to them. Do you agree with Richardson’s assertion? Why or why not? How do you think this view lines up with other Biblical passages?

How would you answer Solomon’s initial question – what do people really get for all their hard work? What do you think is the purpose of work?

Solomon says that even though God has placed eternity with the human heart, “people cannot see the whole scope of God’s work from beginning to end.” What do you think he means by this statement? How would you explain its meaning to someone else?

 

Photo by Chang Duong on Unsplash

Photo – Text added by Dave Lowe

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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?

 

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