Investing isn’t simply multiplying and storing assets without purpose – that’s hoarding, which is condemned by Jesus in Luke 12:16-21. But, Solomon gives some excellent investment advice: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth” (Ecclesiastes 11:2).

Investing 101

Because you’re reading this, you’re probably a rookie investor, so here are some guidelines.

* An investment should be simple to understand and easy to track.

* Investments mustn’t change your lifestyle or cause stress or worry for you or your family.

* Investments must have liquidity so you can get your money back in case of an emergency.

* You should be able to handle the investment yourself, and develop it with little administrative time.

* Invest with purposeful goals, such as retirement, education, tax shelter, and so on.

* Don’t allocate money for investing if your family budget doesn’t allow for investing.

* Avoid personal liability and remember that surety is always an unwise investment strategy.

* Evaluate risk and return, and if you can’t afford to lose it, don’t invest it.

* Never encumber all of your assets; keep at least half of your investment debt free.

* Be patient and remember that most get-rich-quick schemes rely on greed and quick decisions.

* Follow Solomon’s counsel– diversify and don’t put all your eggs in one basket.

Scripturally sound reasons to invest

1. Multiply to give more. Jesus’ parable of the talents (see Luke 19:12-26) tells us that God entrusts wealth to some of His stewards so that it will be available to Him at a later date. Wealth management requires that it be invested or multiplied.

2. Meet future family needs. God’s Word indicates that the heads of families should provide for their own (see 1 Timothy 5:8). Good planning requires laying aside some surplus for future needs.

3. Further the Gospel and fund special needs. This giving is necessary to maintain and promote the Gospel. If the church is ever to break out of the borrowing habit, Christians who invest must maintain some surpluses and be willing to give to legitimate needs.

Unsound reasons to invest

1. Greed. The desire to continually have more and demand only the best (see 1 Timothy 6:9).

2. Envy. The desire to achieve based on other people’s successes (see Psalm 73:3).

3. Pride. The desire to be elevated because of material achievements (see 1 Timothy 6:17).

4. Ignorance. Lack of discernment in following the counsel of other incorrect people (see Proverbs 14:7).

An investor must begin somewhere. But before you allocate money to any investment option, first pray, set goals, and understand basic investment wisdom. Realize that investing isn’t meant to be an overnight get-rich-quick success; it’s a long-term undertaking that shouldn’t adversely impact your daily life.

Originally posted 3/26/2012.