What You Need To Know About Investing With Mark Biller
Faith & Finance with Rob West | Mar 11, 2022
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Show Notes
If you had to guess, how many biblical principles do you think apply to investing? The number may surprise you. Knowing and applying God’s financial principles in your investment decisions will make you a better steward of His resources and give you peace of mind. Investment expert Mark Biller joins Rob West today to discuss it.
Mark Biller is executive editor at Sound Mind Investing. A lot of the most familiar biblical financial principles revolve around the “personal finance” side of money … things like saving, borrowing, and so forth. But the Bible teaches us to live differently. Romans 12:2 says, "Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God's will is — his good, pleasing and perfect will.” While Scripture doesn’t weigh in on the differences between Roth IRAs and Traditional IRAs, or a market order versus a limit order, it does provide numerous principles that can (and should) guide us in our investing. The SMI newsletter had an article this month that focused on nine biblical principles specific to investing: BIBLICAL PRINCIPLES SPECIFIC TO INVESTING 1. KNOW YOUR ROLE. Our culture tells us we own our stuff. The Bible says otherwise.- Psalm 24:1-2 says clearly, “The earth is the LORD’s, and everything in it, the world, and all who live in it; for he founded it upon the seas and established it upon the waters.”
- Acknowledging God’s ownership of everything is the essential starting point of biblical stewardship. It’s also the essential starting point of investing. We’re stewards, or managers, of whatever God generously and temporarily entrusts to our care. That means we should be investing for God’s purposes and according to His principles.
- The amount we’re given to manage is related to our current abilities (v. 15);
- The Lord will one day return and He’ll want to see what we have done with what He entrusted to us (v. 19);
- If we manage His resources well — in other words, if we make something more of what He entrusts to us — He’ll entrust us with more to manage (v. 20-23).
- Scripture teaches that our lives are to be about loving God (Matthew 22:36-38), loving people (Matthew 22:39), and bringing glory to God (Ephesians 2:10).
- Financially, some important ways we can fulfill those purposes are by giving generously toward Kingdom-building causes (Proverbs 3:9) and providing for our families (1 Timothy 5:8).
- While we’re in the paid workforce, our wages typically enable us to do both. But someday, most of us will retire from full-time paid work. Investing wisely now can give us the means to continue giving and supporting our family even after our salary days are over and we move into later life.
- While the stock market’s long-term trajectory has been upward, it doesn’t move up in a straight line. Over the past seven decades, the market has experienced:
- A “correction,” which is a decline of 10% or more from its most recent high … every other year on average
- It has experienced a “bear market,” which is a decline of 20% or more … every seven years on average
- And it’s experienced a “crash,” which is a decline of 30% or more … roughly every 12 years.
- When the market is going up, greed can tempt us to invest more aggressively than we should. When the market is falling, fear can tempt us to abandon our long-term plan and run for cover at the worst possible times. That’s why, in addition to knowing the kind of market history we just discussed, the sixth principle is so important.
- And that is to “think long-term. The Bible teaches us to build wealth slowly. Proverbs 21:5 says, “Steady plodding brings prosperity; hasty speculation brings poverty.”
- A
biblical approach to investing takes a long-term view. History
demonstrates that time favors the patient investor. On any given day,
the market only has a slightly better than 50% chance of rising. But the
longer you stretch that time horizon, the higher that percentage
becomes. So for example, there has never been a 20-year period when the
total return of the stock market has been negative.
- If you invest your entire portfolio in a single stock and that stock has a bad year, that’s a problem. But if you invest in 10 to 20 stocks and one of them has a bad year, the performance of the others may balance that out. That’s the idea behind diversification.
- Investing in mutual funds, as opposed to individual stocks, is a simple way to diversify your investments. A mutual fund is a pool of money from many investors that is invested in many stocks (or other types of investment).
- Proverbs 20:18 says, “Plans succeed through good counsel” and by the same token, Proverbs 5:22 teaches, “Plans fail for lack of counsel.”
- Investing can be challenging to do entirely on one’s own. Fortunately, good counsel is readily at hand, whether via an investment service like SMI or by working with a Christian financial advisor.
- What’s the difference between a debt settlement company and a Christian credit counseling organization?
- How should you determine the best way to help your parents financially if they haven’t handled money biblically?
- What’s the difference between a debt settlement company and a Christian credit counseling organization?
- How should you determine the best way to help your parents financially if they haven’t handled money biblically?
