Today’s message is the fourth in a series of messages entitled “Four Keys to Financial Freedom.” So far, we have discussed three keys: earn money honestly, give money generously, and spend money wisely. The final phase of achieving financial freedom involves having a surplus of money to invest. To have money to invest, you must begin by considering how much you earn monthly. By the way, the Bible often refers to the outcome of a person’s labors as “fruit.” That makes sense, because the economy of the Bible was driven by agriculture (2 Timothy 2:6). How do we wisely manage the income God has entrusted to us? According to Scripture, we should give first. The Old Testament gives us a principle we would do well to keep in mind. It is the principle of firstfruits: “Honor the Lord from your wealth and from the first of all your produce” (Proverbs 3:9). Right off the top, the Biblical steward will set apart a portion of his income to advance God’s goals in the world. As we have seen earlier in this series, that proportion should be generous in light of your income. Under the new covenant, God does not prescribe the percentage as he did under the Old Covenant, but it should be generous. While this is not a rule, I a good goal for us to strive for is to give about 10% of our income to a combination of gospel ministry and charitable causes.
Spending. God has given us money to provide for our needs. But we must spend it wisely. Your goal in spending should be to have a surplus. You should not spend everything that you earn. You will never experience financial freedom if you do.
Invest your surplus. If you have money left over after monthly expenses, then God has given you more money to manage for him. And he expects a return on his investment. Jesus told a parable in Matthew 25:14-21 where he made this clear. The way to gain an increase on the money entrusted to you is by investing. Investing is like planting seeds. The money you invest carefully isn’t gone, it is growing.
Invest and grow. There are two reasons that you should invest. One is that it is good management of God’s money. You are being a careful steward. The second reason is that careful investing can eventually provide income you will need to live on. When you plant a seed, it will grow and eventually produce a harvest. When you invest your surplus, it will grow and eventually become a significant source of income.
Doubling. If invested wisely and carefully, your investment will double over time. There is another economic tool that tends to be true when it comes to investing. As a general rule, the higher the percent return on an investment, the riskier that investment may be. Risky investments may result in the loss of your money. The right motive for investing is faithfulness. If “fear” is your motive, you may do nothing. If “greed” is your motive, you may invest carelessly (with too much risk). If “faithfulness” is your motive, you remember it is God’s money and that He expects an increase. Warning: Any percentage of annual increase that sounds too good to be true probably is (Proverbs 14:15).
Diversify. One way to reduce the risk of losing everything if an investment goes bad is to divide your money into several different investments (Ecclesiastes 11:2).
Investment benefits in retirement. Eventually, your careful investing will create a sizable reserve. That reserve can be large enough to produce a yearly increase that pays for your annual giving and spending. At that point, you could live off the income from your investments. When you reach the point where your investments provide for your annual giving and spending, you could retire. Since you don’t have to earn money at a job, your financial freedom has brought you time freedom. You could spend this time God has blessed you with helping your family, church or community. Financial freedom might allow you to help with raising your grandchildren. Finally, financial freedom protects you during seasons of life when you are unable to work or earn money from your labors.
Emergencies. Unexpected financial emergencies happen. Having money to handle them comes from careful investing. If you don’t have an emergency, then your investment is growing. If you do have an emergency, you can pull money to pay for it.
Inheritance. Many people think of leaving an inheritance to their children upon their death. However, think of how much more enjoyment you would get from financially blessing your grandchildren while you are still living (Proverbs 13:22)! With careful investing, it’s possible.
One thing is clear. Financial freedom requires planning and a budget that you follow. The only way to save enough for the future is to start investing today. Any expenses that can be eliminated from your spending will increase the amount you have to invest. The potential to multiply the money God has entrusted to you becomes an exciting motivation for following a monthly budget and eliminating unnecessary spending.
APPLICATION / CHALLENGE
- Make a financial plan for your family.
- Financial freedom requires that you spend less than you earn, so calculate whether or not you have any surplus. If not, you must reduce or eliminate some expenses.
- Paying off debt is the first thing to do with any surplus funds. (Use the “Debt Elimination” form.)
- Learn more about Financial Peace University (FPU), the small group class that is for anyone who needs improvement in getting out of debt, better budgeting, investing in wise financial decisions, or simply sharpening your financial skills. Dave Ramsey’s life-changing program teaches you how to make the right decisions with your money. This small-group, interactive class environment empowers you with the practical skills and confidence needed to achieve your financial goals and experience true financial peace!
TAKE ONE STEP
Each week, write down one doable concrete step of obedience, small or large that you will put into practice this week. (James 1:22: “But prove yourselves doers of the word, and not merely hearers who delude themselves.”)