Not too long ago the Federal Reserve released a study they commissioned that discovered about half of all Americans could not cover a $400 emergency without borrowing money or selling something they owned.[i] Another study showed that ¾ of Americans are living paycheck-to-paycheck.[ii] The reality is that many pastors are in the same boat.
Here are 8 Biblical principles to be wise managers of the resources that God has entrusted to you:
1. Give 10% of your income back to God.
God’s Word is consistent in that we should give at least 10% of our income back to the Lord. We see this practice in the Old Testament, and Jesus affirmed it in the New Testament. You might be thinking, “The only person who would think that’s a good investment is a pastor.” I get why you’d think that, but you’d be wrong. One of the greatest investors of the 20th century was John Templeton. He is the founder of the Templeton Group of mutual funds. He was once asked in a press conference for his single best tip on investing.
This is what he said:
“Life’s greatest investment is to tithe! (Give 10% back to God). I have observed 100,000 families over my years of investing counseling. I always saw greater prosperity and happiness among those families who tithed than among those who didn’t.”
And it’s not just John Templeton. Do Won Chang (the founder of Forever 21), Cathy Hughes (founder of Radio One), Norm Miller (CEO of Interstate Batteries), David Green (founder of The Hobby Lobby), and Cathy Truett (founder of Chick-Fil-A) all are on record saying that they believe in tithing.
2. Be ruthlessly committed to your financial freedom.
Proverbs 22:7 tells us, “…the borrow is the slave to the lender.” Do whatever it takes (legally and ethically) to get out of credit card debt. Drive your car longer than everyone else. Do not eat out. Skip the gym membership for a run outside. No, you do not need the latest smart phone. No, you do not need the most expensive data plan. Go camping for your vacation instead of staying in a hotel. The ability to say “Yes” to financial freedom begins with the discipline to say “No” to living beyond your means. Once you have cleared your debts and saved six months living expenses as an emergency fund, then it time to invest.
3. Start now, no matter how small the investment.
Lazy people will always make excuses about why they should not do something (see Prov. 22:13). One of the most common excuses for not investing is “Well, I do not have much to invest, so I’ll wait until I have more.” By starting small and starting now, you have two advantages. The first is that by starting now you give the investment maximum time to grow. The second is that if it fails, you will have only lost a little since you started small. Small losses now help you avoid big losses later. Consider those small losses as an investment in your education in investing. The small loses I experienced when I first started investing have protected me by teaching me how to avoid larger losses now (20 years later).
4. Do not invest in things you do not understand.
Let’s say you want to buy stock in a company. If you can’t clearly and simply explain what the company does to create value, why you think it’s a good investment, and what risks are associated with it, then you should not invest in that company. Proverbs tells us, “By wisdom a house is built and through understanding it is established. Through knowledge its rooms are filled with rare and beautiful treasures.” (Prov. 24:3-4) Sometimes the best investments are the ones you do not make because you don’t understand them well enough to invest. If you do not know anything about investing, you need to begin to educate yourself so you can make wise investments in things you understand so the money God has entrusted you with will earn money.
5. Never put all your eggs in one basket.
Ecclesiastes 11:2 “Divide your investments among many places, for you do not know what risks might lie ahead.” Diversifying your investments is one of the principles of biblical investing. That means do not put all of your investment money into the stock market, do not put it all into bonds, do not put it all into real estate, or commodities, or your cousin’s start up company. By diversifying your investments, you have some safety when any one investment, sector, or industry suffers. On the upside, if one sector grows significantly, you are more likely to capture that gain.
6. Do not try to get rich quick.
Wise investing requires patience. Many years ago, I had a guy who I knew try to convince me to invest in an investment that he promised would be a guaranteed quick multiplier. Here’s a little tip: if anyone ever guarantees you the money will multiply quickly, run away from that person as fast as you can. If it sounds too good to be true, it probably is. It turned out he was running a Ponzi scheme. The Bible tells us: “Dishonest money dwindles away, but whoever gathers it little by little makes it grow” Prov. 13:11
7. If your investments increase, do not set your heart on them.
You cannot invest your way to salvation. As your investments increase, do not set your heart on them. Psalm 62:10: “…if your wealth increases, do not make it the center of your life.”
8. Experience the joy of kingdom giving.
Some Christians are uncomfortable with the idea of wealth; however, wealth is not bad when you use it to do good things. I do not believe in the prosperity gospel, but I equally do not believe in the poverty gospel. It is a lot easier to do give when you have something to give. In addition to tithing, do not wait to give at the end of your life. Be prayerful and generous along the way. Maybe God wants you to take some of the profit of a specific investment and give it to some kingdom purpose that He wants you to help accomplish. Jesus said it this way, “Give, and you will receive. Your gift will return to you in full—pressed down, shaken together to make room for more, running over, and poured into your lap. The amount you give will determine the amount you get back.” (Luke 6:38)
Tom Hughes is the Co-Lead Pastor of Christian Assembly Church in Los Angeles, CA. He is the Author of Curious:The Unexpected Power of a Question-Led Life.