Do You Love Money?
We should seek to be “free from the love of money” and not “fond of sordid gain” (1 Timothy 3:3, 8 nasb). God wants us to love people and use things. Too often we use people and love things. We do not own the things we cannot give away–they own us. To minimize the chances of falling in love with money, a faith-based investment plan is critical. Setting up such a plan consists of four key steps:
Step One: Determine your purpose.
Money without purpose is just money. However, money with a purpose can be used to change the world. It feeds the poor, builds shelters, and changes lives and souls for the kingdom of God. Money with a godly purpose can be revolutionary.
If you desire money solely for material things, you will never be content. Many of the happiest and most successful people in the world have found their purpose in life. They know exactly what money can do to help their families and help others. If you had more money what would you do with it? Who would you help? What would your days, weeks, and months look like? Unless you can envision how you will use money to better the lives of others, no amount of money will fill you up. It is only Christ’s love that fills the void in your life. As you grow closer to Him, He will help you find your purpose–your unique calling.
Step Two: Define your values.
Values form the foundation of who we are. These are what we place above all else, including our own self-interests. Corporations are no different. They project a set of values. If a company values its employees and helping society above profits, then the corporation should protect its employees and others above its own profits. If a company values the environment, they should be willing to minimize pollution and waste even at the expense of profit. Whatever an individual or corporation values should trump all else.
Universal values like love, compassion, justice, freedom, honesty, faithfulness, and responsibility are not optional; they are what keep a society together. We are free to ignore these values, but we must be willing to suffer the inevitable consequences. When you seek only self-interests, you will eventually lose everything you have.
Clarifying your values sets the stage for you to define God’s purpose for your life. He has intentionally put you in certain situations and experiences. Your life lessons are preparation for the “next chapter.” Once you have discovered what you ultimately strive to accomplish, then you will suddenly find additional motivation. A good source of fuel for your burning passion often comes from what you value most.
Step Three: Evaluate asset choices.
When you look at investing, there are really only five choices. Here’s a look at the classes of assets you’ll generally be considering when you invest:
1. Start or Operate a Company: Selling a product or service that meets the needs of the marketplace can be the fastest path to financial freedom. However, this can also be the riskiest and least likely to succeed when you evaluate your choices.
2. Stocks: Although past performance is no guarantee of future results, stocks have historically provided a higher average annual rate of return than other investments, including bonds and cash equivalents. However, stocks are generally more volatile than bonds or cash equivalents. Investing in stocks may be appropriate if your investment goals are long-term.
3. Bonds: Historically less volatile than stocks, bonds do not provide as much opportunity for growth as stocks do. When interest rates rise, bond values tend to fall, and when interest rates fall, bond values tend to rise. Because bonds offer fixed interest payments at regular intervals, they may be appropriate if you want regular income from your investments.
4. Cash Equivalents: Cash equivalents (or short-term instruments) such as money market funds offer a lower potential for growth than other types of assets but are the least volatile. They are subject to inflation risk, the chance that returns won’t outpace rising prices. They provide easier access to funds than longer-term investments and may be appropriate if your investment goals are short-term.
5. Alternative Assets: The term “alternative assets” is highly flexible and is used to describe specific physical assets, such as natural resources and real estate, as well as methods of investing, such as hedge funds and private equity. In some cases, even geographic regions, such as emerging global markets, are considered alternative assets. These are often investments that are unrelated to other asset types.
Step Four: Select sound investments that complement your faith.
Many well-educated, morally and socially conscious investors wind up buying shares of companies whose beliefs and business practices are far removed from their own. Most investors simply haven’t thought about merging their personal beliefs with their investment strategies. Some may not even be aware of where and how their money is invested.
Consider this: When you invest in a company, you own part of that company. Some investors would prefer to separate themselves from their investments, but any shareholder cannot. So what you really need to consider, based on what the company does and how they conduct business, is whether you would feel comfortable being a partial owner of that company.
How you invest or don’t invest your money can be a significant statement of your beliefs and personal principles. For example, if someone is strongly opposed to gambling or pornography, they could choose to not invest in any company that contributes to those industries. If everyone who opposed those industries sold (or didn’t purchase) shares from those companies, that could potentially send a powerful message. On the flip side, if someone firmly believes in eco-friendly alternative energy sources, they could choose to invest in wind farms rather than big oil (for example) as a way to show their support.