INVESTMENTS
Meghan Smith
Jordan Smith
Deedre Stinson
Brittani
Stockwell
Lesley
Wilkinson
Brandon
Woodley ACCT
212-B04
“A wise man thinks ahead; a fool doesn’t and even brags about it” (Proverbs 13:16 TLB).
Throughout the Bible, God instructs his children to be prepared for their future by investing in it.
Investments are defined as an “asset purchased with the idea that the asset will provide income in
the future or appreciate and be sold at a higher price” (Investments, 2015). The Bible teaches us
to not only invest in our relationship with our Creator, but to also plan for our time here on Earth.
Although tomorrow is not guaranteed, a wise man makes sure to be financially stable for the
coming years.
Ecclesiastes 11:1-6 says, “Cast your bread upon the waters, for you will find it after
many days. Give a portion to seven, or even to eight, for you know not what disaster may happen
on earth. If the clouds are full of rain, they empty themselves on the earth, and if a tree falls to
the south or to the north, in the place where the tree falls, there it will lie. He who observes the
wind will not sow, and he who regards the clouds will not reap. As you do not know the way the
spirit comes to the bones in the womb of a woman with child, so you do not know the work of
God who makes everything” (NIV Student Bible, p. 1057). This verse instructs people to be
prepared because they don’t know what circumstances may lay ahead. One of the greatest ways
to be prepared is to make investments in our futures. Investments can be made monetarily, as
well as spiritually. The textbook defines a long-term investment as “those securities that are not
readily convertible to cash or are not intended to be converted into cash in the short term”
(Chiappeta, Shaw, & Wild, p. 598). A great way to ensure a ‘safety net’ is in place for our future
is by investing in the stock market. In the article “Investing in stocks: three models of faith
integration” by Brian E. Porter and Todd P. Steen, the authors say that “a large majority (79
percent) of investors describe themselves as religious or spiritual and 62 percent of religious
investors exercise faith in their financial decisions, whereas only 33 percent of non-religious
investors exercise personal values in their financial decisions” (Porter & Steen, p. 812). One
major problem that investors have is that they “can be considered passive investors. They are not
actively involved in nor are they knowledgeable about the companies of which they are partial
owners. They have invested merely in hopes of achieving financial gain” (Porter & Steen, pp.
812-813). We cannot be passive or ‘lazy’ about our investments or else we cannot expect to yield
any profits. Our relationship with God is something that we can cash in on daily because he is
always there for us, but the primary reason for investing in a relationship with our creator is
because of the long-term benefit; eternity with Him. As believers, or even as human beings for
that matter, we don’t know what tomorrow will bring but our God does and He goes before us in
all circumstances. However, the same way that we cannot expect to gain anything by ‘lazy’
investing money-wise, we cannot expect to gain a real living relationship with the One who
made us if we are not willing to put in the work to guarantee a profit.
Just as Ecclesiastes provides instructions on preparations for the future, James also
instructs readers to be equipped for what may come. James 4:13-14 says, “Now listen, you who
say, ‘Today or tomorrow we will go to this or that city, spend a year there, carry on business and
make money.’ Why, you do not even know what will happen tomorrow. What is your life? You
are a mist that appears for a little while and then vanishes. (ESV) This scripture speaks clearly to
the diversity of life and the unknown, which lies ahead for each and every human being. In
making financial investments most smart investors invest in both stocks and bonds. And many
stocks provide current income in the form of dividends. Over the long-run by watching one’s
investments their can be a long-term investment strategy designed. (Anonymous, 2006) There is
a clear admonition in the Bible to diversify our holdings to protect ourselves. As we don’t know
what will happen tomorrow with our lives so we don’t with the stock market. This will overall
greatly reduce our financial risks for the future. Mutual funds offer the highest degree of
diversification and even within should a variety of funds be invested. Kavita Sriram puts the
purpose of mutual funds for diversification well in her words, “Mutual fund pools money from
many investors and invests the money in stocks, bonds, short-term money market instruments,
other securities or assets, or some combination of these investments.” (Sriram, 2007) They are in
fact the simplest way to achieve diversification. Of course as Sriram and scripture advises it is
not wise to blindly invest in mutual bonds or any for that matter; rather good counsel should be
sought in making all short and long-term investments.
Nearly all of the accounting principles we use today derives from the teaching of God
and his word through the Bible. “Without the guidance of good leaders a nation falls. But many
good advisers can save it” (Proverbs 11:14). The bible noted that a single person could not
successfully drive a business. The Bible also teaches the importance of making and investing
money, for we do not know what will become of the next day or year. No man nor business
will be successful without a plan, for only a fool would think so. “On the first day of every
week, each one of you should set aside a sum of money in keeping with your income, saving it
up, so that when I come no collections will have to be made” (Corinthians 16:2). This scripture
commands us to so set aside money diligently and prepare for days ahead so that when trouble
comes there will be no need to scatter and collect. Many other passages and evidence point
towards the wise method of saving 10 percent of your income. Diversification is another facet
that the bible implicates basic accounting principles, teaching us to invest in markets as well as
mutual funds to be a wise investor and more prosperous.
References:
Anonymous. Financial focus diversifying, investing for long-term best strategy. (2006, Apr
08). The News - Item Retrieved from http://search.proquest.com/docview/304824516?
accountid=12085
Chiappeta, B., Shaw, K. W., & Wild, J. J. (2013). Fundamental Accounting Principles .
McGraw- Hill Education.
Investments. (2015). Retrieved from Investopedia: http://www.investopedia.com/
NIV Student Bible. (2002). Grand Rapids: Zondervan.
Porter, B. E., & Steen, T. P. (2006). Investing in stocks: three models of faith integration.
Managerial Finance, 812-821.
Sriram, K. (2007, Oct 07). Mutual fund for diversification. McClatchy - Tribune Business
News Retrieved from http://search.proquest.com/docview/459095406?
accountid=12085
