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The Biblical Principles of Investing

 

The Word of God is THE authority on every subject of life. It should guide your natural life as well as your spiritual. In fact, even in investing the Bible lays out principles which can help you make better decisions. Too many people lose money by trying to catch a rising stock or chasing some get-rich-quick scheme instead of following the investing principles of the Bible.

 

It is important to note that investing by its very nature does involve taking some risk. And investing is not strictly limited to the stock market either. Some people invest in business ventures or start their own business. Others invest in real estate, commodities, currencies, etc. Regardless of your chosen investment vehicle, the Biblical principles of investing will apply to each.

 

Itís interesting that the Bible does advocate investing your money rather than just keeping it ďunder your mattressĒ.  Jesus criticized the servant who buried the single talent that was entrusted to him, while praising those servants that earned good returns on their investments (Luke 19).  It seems that learning to make good investment decisions is a key part of becoming a wise steward. 

 

So rather than just listening to what the investing guruís on Wall Street have to say or reading the latest investing book, letís look at some of the principles that the Bible lays out for investing:

 

Diversification

Cast thy bread upon the waters: for thou shalt find it after many days. Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth.  Ecc. 11:1-2

 

Itís never a good idea to invest all your money in a single venture. Living under the curse, no investment is a sure thing. Therefore, it is better to diversify your investments so that if one does poorly the losses you take on that investment will be offset by your gains on your other investments.

 

Invest in a business or product you understand

Through wisdom is an house builded; and by understanding it is established: And by knowledge shall the chambers be filled with all precious and pleasant riches. Prov. 24:3-4

 

Whether its choosing a stock to invest in or a business to start, choose one where you understand the products and how it makes money. In the late 1990ís, many people were investing in stocks without even knowing what they did or how they would ever be able to make money. As a result they had no way of understanding how the business itself was doing and recognizing when wheels were coming off the wagon.

 

Investing is not Speculating

Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase. Prov. 13:11

 

Any wealth you gain from gambling, whether it be in the stock market or at the casino soon will vanish. If you choose to invest your money without having any solid rationale for doing so, then you are not investing - you are speculating. Of course even speculators hit gold occasionally, but the odds are you will lose big following that strategy.

 

Donít get greedy

Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth. Luke 12:15

 

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