If you have created a budget and are following it, eventually you will wind up with more in savings than you need for an emergency fund. At that point, you should think and pray about investing your excess money to meet future needs. The following rules of investing are adapted from Larry Burkett’s book, Family Budgets That Work.
- Never invest money you cannot afford to lose. All investments have an element of risk and the possibility exist that you might lose all or a portion of the money you have invested. One only has to look at the variability in the stock market to see that this is true.
- Never get involved with things you don’t understand. Don’t try to buy individual stocks unless you know the company well and have confidence that it is well-run.
- Demand sufficient information to thoroughly evaluate the opportunity. Take the time to thoroughly research possible investments.
- Seek good, non-involved Christian counsel. There are many knowledgeable Christian financial counselors who will discuss your needs and goals and help you to make wise investment decisions.
- Proverbs 19:20 Listen to advice and accept discipline, and at the end you will be counted among the wise.
- Set a minimum time to pray and seek God’s direction. Don’t let anyone rush you into an investment decision. If the opportunity is only available for a limited time, it is probably an opportunity you should forgo.
- Once you have God’s direction, write out an investment plan. A written plan will help you keep your goals in mind and help you make investment decisions that are consistent with your goals.
- Proverbs 20:5 The purposes of a person’s heart are deep waters, but one who has insight draws them out.
- Avoid ‘get rich’ schemes. Plan for slow, steady growth. If it sounds too good to be true, then it almost always is.
- Proverbs 21:5 The plans of the diligent lead to profit as surely as haste leads to poverty.
- Proverbs 28:20 – 22 A faithful person will be richly blessed, but one eager to get rich will not go unpunished. To show partiality is not good—yet a person will do wrong for a piece of bread. The stingy are eager to get rich and are unaware that poverty awaits them.
Susan's Reflections 