Investing Guidance from the Bible

Bible and Investing

The Bible has a lot to say about money and among many areas of Biblical finance we find guidance for investing.  Christians who want to exercise wise financial stewardship in managing their personal finances can learn from important principles of steady plodding, avoiding risky investments, diversification and always knowing the status of your investments.

Definition of investing

But first, what is investing?  People sometimes confuse savings and investing.  Wikipedia provides us this definition of investing:

Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in form of interest, income or appreciation of the value of the instrument.

The most common example of investing might be in investing money into the stock market by purchasing company stock or mutual funds.  Obviously, investing for retirement typically involves such purchases.  Investing in real estate is another common example which might include the purchase of a house, or rental property.Bible Investing

Definition of saving

Saving, on the other hand, is different than investing.  Wikipedia also provides us a pretty good definition of savings:

In terms of personal finance, saving specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is higher.

So, a good example of saving includes saving money for emergencies in a savings account.  Saving would also include putting money aside for future purchases such as a car, or Christmas presents.

As I mentioned, the Bible clearly gives us some principles to follow when we commit money or capital to the investment of financial instruments or assets.

Consistent, steady plodding and avoiding risky investments

Steady plodding brings prosperity, hasty speculation brings poverty (Proverbs 21: 5 TLB)

Savings, as mentioned above, is always a lower risk preservation of money.

Investing typically requires a commitment to growth over a longer period of time.  The rewards can be in the form of appreciation of the asset and building of future wealth.  It doesn’t include hasty, risky, or get rich quick schemes that often promise to make you rich over night.

The man who speculates is soon back to where he began – with nothing (Ecclesiastes 5: 13-15 TLB)

Rather, scripture tells us we have to make commitment through steady plodding, or consistent monthly investing that will take time to grow and earn a significant return.

Starting early is important, but it is never too late to start investing for the future.  An easy way to get started is to invest in a company retirement plan such as a 401(k).  If you can still make progress on your Money Map journey, invest at least any minimum amount required to receive the company match.

Diversify investments

When it comes to investing, diversification is often an important subject of the conversation.  The Bible provides us a diversification principle too.

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on earth (Ecclesiastes 11:2).

It’s important to remember that no investment is a guaranteed return.  Home values can decrease, the stock market can experience losses and other investments can lose their value.

That’s why it’s important to avoid putting your eggs all in one basket, as they say.  As you work with a financial advisor or investing professional, they will help you diversify your investments across different financial instruments based on your investing objectives and timeline.

Know the status of your assets

It may be easy to work with a trusted financial advisor and turn over all of your investing decisions and the management of your portfolio. However, that’s generally not a good idea.  Why?  While you may be working with a trusted financial advisor, scripture tells us we still need to know the condition of our assets or investments at all times.

Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever, and a crown is not secure for all generations (Proverbs 27:23-24).

It’s a good idea to meet with a financial advisor a few times of year (maybe more depending on your life stage and goals) to review your investment performance, his or her investment strategy and discuss any changes to your goals or objectives.

Final thoughts on investing principles in the Bible

To wrap up, we need to use the Bible has our investing handbook.  While it won’t tell us which stocks to choose or how much we should invest, there are plenty of qualified personal finance advisors who can help you make those specific decisions.

Remember, the Bible provides principles for managing money.  If you invest and follow these Biblical financial principles you can be certain you’re managing your resources wisely and investing in the far greater reward which is your relationship with God.

What do you think about these Biblical principles for investing?

About Jason Price

Jason Price is a family man saved by grace, passionate about faithful financial stewardship (1 Cor 4:2 NIV), soccer and the Pacific sun.

  • Abram Cooper

    My problem is a little unique. I am permaently disabled and am on Social Security Disability Income(SSDI.) I think all I need to do is to give you just one little
    scenerio about how SSDI works (it varies from one state to another), Say my monthly allotment from the United States Government is $770.70, and one day I’m taking my walking exercise,all of a sudden I look down and and lo and behold there is a nickle on the ground right in front of me, so I pick it up and put it in my pocket,but then I say, “Uhhh-Ohhh” I’ve got to report this to Social Security”, but if I do that guess what,? Social Security is going to deduct $107.07 from my montly allotment
    SSDI check. Well, I decide to not keep the nickle and throw it back down on the ground, or I can keep the nickle
    and hope a Social Security Enforcement Officer is not following me and seeing me keep that nickle, I don’t report that extra income and fees have accumulated for not reporting that nickle and I have to pay double that
    $107.07. Through with scenerio. And that is how the system works. Now I am being facetious of course but I cannot tell you all the secret deceitful ways that the Federal Government uses to keep your money so that you cannot get out of the hole that your in (I forgot to mention that I am trying to get out of the taxpayers pockebook) but in this process a person can really hurt themselves for before you can get yourself out of the hole, the Federal Government has hit you up so hard that now you can’t get out. This is a Big Big Big Problem!!!
    What do I do? What do people do when trying to get out from up under the tallons of the United States Government?

  • Isaac

    Investing nowadays is more on Capitalism concept. There will be some sort of interest charges involved. What the bible says about this? As we all noticed, interest charges is not recommended in Christian’s origin belief, but what we can see, our world been conquered by Capitalism. So, what supposedly we should react upon this matter? Should we join or support the capitalism by all means, or should we regulate new policies to replace Capitalism?

    When we refer to the type of businesses of present world, most of it under Capitalism. Though we have the pure intention by joining investment activities for the sake of our future, how many of us, especially the Christians would know that they are investing their money in the right direction as it would please God? Since most of us do not realize nor notice where would the money is going to be invested? It can be in gambling sorts of business? What then the good resolution for this?

  • Craig Matson

    Jason, I an a little uneasy with your exegesis of Ecclesiastes. You speak negatively of ‘speculation’, which is really the attempt to predict future prices. It is the major effort of mutual fund managers and hedge fund managers. You might call it ‘investing’ but that is a misnomer….it is speculation. But that is good! There are many benefits provided by that activity, and there is no first world developed capital market system that does not have a tremendous speculative element to provide liquidity and transfer risk.

    But Ecclesiastes does not make a distinction between speculation and investment. The New American Standard, a far better translation, says this: ‘When those riches were lost through a bad INVESTMENT and he had fathered a son, then there was nothing to support him.’ vs 15.

    Investing in mutual funds, no matter how long you hold them, still carry a tremendous price risk. The context of the passage has nothing to do with speculation or investment; it has everything to do with ‘grievous evils’ vs 13 that include losing riches through bad investments. What are commonly sold by Wall Street as ‘safe’ investments may be worthless down the road. That is the point of the passage. Life is not fair and the future is not able to be predicted.

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