Finance Lesson #13

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Syllabus

February 12, 2010

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Bible Perspectives
FINANCIAL TRUTHS FROM THE BIBLE
Lesson #13
SAVING AND INVESTING

• Memory Verse: Pro 21:20
• Currently in this age, saving and investing is not in style. However, the Bible does teach saving and investing even though many Christians feel that money is evil.
  • Read 1Tim 6:10
    • Money is morally neutral. It can be used for good or for evil. Therefore, it is the attitude toward money that is the important point.
    • In the Old Testament, some of the strongest believers were very wealthy, men like Abraham, Job, and David. However, they did not permit their money to interfere with their relationship to God.
  • Read Mat 6:19-21
    • From this passage many people say that it is wrong to save and invest money.
    • However, notice that the key in this passage is that the man saved all his wealth for himself. He did not have his finances balanced.
      • Where is the balance?
        • The balance is first to give to God and then to save and invest. Without giving to God, the person’s focus is on saving and investing so that you can get more for yourself.
• In the same way as the other areas of finance, it is important to develop your investment goals.
  • The Three Primary Investment Goals:
    • =1= To provide for your family.
      • Read 1Tim 5:8
    • =2= To become financially free so as to serve the Lord.
      • Some people save money to become free to serve God part time.
      • Some people save enough money to become totally free of a job and give their whole life to serving God full time.
    • =3= To obtain your own business.
      • Some people save and invest money to buy their own business.
• Establishing the maximum amount of your saving and investment goals:
  • The believer should establish the maximum amount of money that he will accumulate.
    • The reason for this is to prevent the bad habit of hoarding more than you will need or ever be able to use.
    • When the believer has reached his goal of the maximum amount that he will save and invest, he should begin to give away the rest so that he avoids the bad habit of hoarding.
  • The unacceptable goal is to become “rich” with an undetermined amount.
    • Read 1Tim 6:9
      • The unacceptable goal to become rich leads one to falling into temptation and a snare. Notice that there are no exceptions in this scripture. If extreme wealth is your goal, the temptation and a snare are definitely inevitable and will lead to a final destruction.
        • Read Mat 6:24
  • Therefore, when the believer has become a faithful steward of the possessions and wealth that God has given him, and has not become corrupt in his attitude and motive for gaining wealth, God will bless him more.

 

• The rich and who are they?

 

• The desire to get rich
  • The desire to get rich is very close to the sinful attitude of greed, and greed is idolatry.
    • Read Col 3:5
  • We have already discovered that there is a desire to get rich.
  • Now we must learn how to control this desire.
    • Read 1Tim 6:11
      • Flee
        • Flee from the lust to possess things.
        • Flee from the lust to obtain money.
        • Flee from the lust to impress people with material possessions.
      • Pursue
        • Pursue the things of God.
        • Pursue righteousness.
        • Pursue the plan of God for your life.
  • The term, “the rich” is a relative term.
    • Compared to some people we are all very poor, but compared to other people we are all very rich. In other words, you can always find someone who has more wealth than you and someone who has less wealth than you have.
    • Following the Biblical concept of the term “the rich” the great majority of people living in the United States are rich because in comparison to the rest of the world, they live in great poverty.
      • Read 1Tim 6:17-19
      • Read James 1:9-10
        • We can gain some important principles from these passages:
          • =1= Do not be conceited for there are people that are richer than you are.
            • This temptation to pride comes from the false concept that your wealth is the result of your own hard work. While in part that may be true, it is God that provides the opportunities and the wisdom. We have already learned in this course that God gives wealth to those He chooses and to those that can handle it.
          • =2= Do not put your confidence in your assets. You must maintain your faith in God and not in wealth.
            • It is more difficult to trust God whom we cannot see than to trust in wealth that we can see. However, the Christian must learn to walk by faith.
          • =3= Give generously to God and to others.

 

• Saving

 

• Read Pro 30:24-25
• Saving is the opposite of debt.
  • Saving is to make provision for tomorrow while debt is presuming upon tomorrow.
• Saving is to control your desire to buy today and place it in the future and requires self-denial.
  • Self-denial is an unpopular concept in the human world system.
• Faulty arguments against saving:

• Remember that the world’s system of economics is upside down from God’s system of finance. Therefore, the believer must by faith put aside the world’s faulty arguments against saving.
  • In the United States, the government’s tax structure rewards debt and not saving.
  • In the United States, most earned interest from savings is taxable.
  • Inflation reduces the purchasing power of the money you saved.
• The principal example of saving in the Bible is Joseph.

• Read Gen 41:30-39
  • Saving requires self-denial.
    • Man must make a choice not to use what he has in his hand so that he can save it for the future.
• How to Save:

• Make saving a habit.
  • You make a habit by starting to practice it at regular periodic intervals of time.
  • When you receive income, first give to God, then you should give to your savings account.
• How much should you save?
  • You should save at least 10% of your income. If that is not immediately possible, start small and work up to it over a year or two.
• The two types of savings:

• Long-term savings:
  • This is saving that is determined to provide for something far into the future for long-term needs and goals such as retirement.
  • This saving’s account must never be used except in the case of an extreme emergency.
  • This money can be kept in an account that is not very liquid.
• Short-term savings:
  • This is saving money that is designed to provide for planned future spending such as a house, or to replace a car, the loss of a job, sudden illness, etc.
  • You should have in this account the quantity of three to six months of your annual income.

 

• Investing

 

• Read Pro 21:5
• Diligence is to do something constantly over time.
• To become a successful investor, you must spend less than you earn. That means you remain free from debt and therefore the principle of compound interest works in your favor.
  • Remember that we discussed how debt causes compound interest to work against you.
  • Now we are going to learn more about compound interest and how to make it work in your favor.

 

• Compound Interest that favors you

 

• The three variables of Compound Interest:
• =1= The quantity you save
• =2= The interest rate you receive
• =3= The length of time the money is invested
• The quantity you save:

• This amount will vary depending on your income, your lifestyle, how much debt you have, and how faithful you are to keep a budget.
• The interest rate you receive

• The interest rates vary constantly depending on the economy and government regulation.
• However, you must be aware that, comparatively speaking, the higher the interest rate, the greater is the risk of that specific investment.
• The length of time that the money is invested

• Because of compound interest, the earlier a person starts to save, the more he will accumulate finally.
  • The example:
    • If a person saves $2. 74 every day faithfully, he will have saved $1,000 a year. If he earns 10% on that savings, he will have obtained $486,852 after 40 years and will be earning $4,057 in interest.
    • However, if he waits one year before he starts saving, and he saves for 39 years instead of 40 years, he will gain $45,260 less than if he had started one year earlier.
• An important warning:

• Read Ecc 5:13-15
  • The Bible warns us of risky investments.
• Warning signs:
  • Avoid investments that promise a high return or a high interest rate that is practically guaranteed. There is no guaranteed investment on this earth.
  • The decision to invest must be made quickly without giving you time to investigate it.
  • Little or nothing will be said to you about the risks.

 

• Diversity

 

• It is important in financial investments to diversify. We have a saying in English, “Do not put all of your eggs in one basket.”
• Read Ecc 11:2
• Diversify in the following ways, without skipping any of them.

• =1= Invest the quantity of one month’s living expenses in insurance protection.
• =2= Save three to six month’s living expenses
• =3= Invest conservatively in your home mortgage to meet long-term goals.
• =4= Make other investments in a variety of types.

 

• Gambling and the Lottery

 

• People spend 15 times more money on gambling and the lottery than they give to churches.
• The Christian should never participate in gambling and lotteries. Why?

• =1= It presumes upon the grace of God who is in control of your life.
• =2= It is contrary to the way God blesses His people financially.
  • God blesses through diligence.
  • God blesses through faithfulness.
  • God blesses through hard work.
  • God blesses through the measure that you give.
    • Read Luk 6:38

 

• Wills and Inheritance

 

• By means of wills and inheritance the Christian invests in the future, either through his family or through his church or other ministries.
• In this aspect of finance, the Christian needs the wisdom of God to know in whom he should invest for the future in the event of his own death.
• Read 2Kin 20:1

• Every Christian should have a will. This is especially important if you are married and even more important if you have children.
  • The parent is responsible for the care of his children and that includes even the event of his own death. How you arrange your will and financial affairs will determine the lifestyle and condition of your children when you die.
    • You may say that you are poor and have no need of a will because you have no financial assets to leave your children. However, your children are your important asset. You must decide who will care for them if you and your spouse are gone.
• Read Pro 13:22
• Read Pro 20:21

• Inheritance should not be given to children and grandchildren until they are mature and trained in the managing of money.
• As a Christian, you want to bless those people close to you. You do not want the result of the hard work in your life does to go to perpetuate a sinful lifestyle in a loved one. That would not be a blessing.
• Read Gal 4:1-2
• In the event that the Christian decides to leave his inheritance to his church or to the work of God through other ministries, he needs to be very careful how he does this.

• He needs to know very well all aspects of the financial reliability of the organization to which he leaves his money.
• He needs the guidance of God.
• He needs professional financial counsel to make sure that it is done legally.

HOMEWORK
This is a self-study. Please do not send homework answers to the teacher forcorrection.

• Examine your habits for saving and investing money. Make the necessary changes so that this aspect of your finances works to favor you.
• If you have not made a will to invest in the future and to provide care for your spouse and children in the event of your death. Take steps this week to do it.

 

• Memory Verse: Pro 22:6