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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.
It’s
interesting that the Bible does advocate investing your money
rather than just keeping it “under your mattress”. 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 guru’s on Wall Street
have to say or reading the latest investing book, let’s 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
It’s 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 1990’s, 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.
Don’t
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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