The following is a guest post from ESI blogging atESI-Geld. He's an early retiree in his 50s who has amassed a multi-million dollar fortune by following three simple steps to building wealth - Earn, Save and Invest (ESI).
As most Christians know, the Bible is filled with information and advice on managing money and being able to build wealth. The book of Proverbs alone provides enough guidance to fill many personal finance books.
Of course, the Bible does not focus on getting rich for the sake of wealth, but to bless others. However, if you apply Bible principles, you cannot help but grow rich.
For the past 25 years, I've used three simple steps to get rich. At the same time, my knowledge of what the Bible says about money has increased. At some point along the way, I realized that my actions reflected what was written in Scripture. Even better, when I changed my behavior to better reflect the Bible's teachings about money, I felt even better.
Steps to help you build wealth
There is no way to cover every verse and every aspect of money mentioned in the Bible in one post. But I want to share with you three steps that I know will help you build wealth—all of which are supported by Scripture.
Step 1: Earn
“Do you see any really competent workers? They will serve kings instead of working for common people.”—Prov. 22:29 (NL)
The first step to building wealth is making money. And unsurprisingly, the more you earn, the faster your wealth can grow. Luckily there is a way to do this.
The Bible says this path involves becoming competent in your work. The dictionary lists competency as “having the necessary ability, knowledge, or skill to do something successfully. Be efficient and capable.”
If you meet these criteria, you will "serve kings." In other words, you rise to the upper levels of your chosen profession. As your responsibility increases, so does your income.
Your career alone is worth millions of dollars. If you don't believe me, do the math. Look at what college students are making these days, add in some annual growth (even if it's small) and spread it out over a 45-year career. You'll get at least $2 million -- maybe more, depending on where you start and what growth rate you use.
That is good news! Your career is a valuable asset! Even better news is that those who are competent at their jobs can earn literally millions of dollars more over the course of their careers. Your competency translates into higher annual income growth. Over the age of 45, even a 1% increase can add up to an enormous sum of money.
So how do you become competent? The short answer is that you must treat your career like the asset it is - and work to grow it as you would any other asset. More precisely there isseven steps to grow your career. If you do this, not only will you be competent at your job, but others will recognize your competence.
You will rise in ranks until you serve kings. And your income will increase with your skills.
Step 2: Save
“Learn a lesson from ants, you lazybones. Learn from their ways and become wise! Although they have no prince, governor, or ruler to force them to work, they work hard all summer and gather food for the winter.”—Prov. 6:6-8 (NLT)
Even ants know that in order to build wealth, you have to save part of your earnings for the future. If we emulate them and save a little from every dollar we make, we are on the road to wealth.
It's so sad to hear about people making a huge income and yet throwing it away by spending more than they make. Outwardly they look wealthy and seem to have it all together. In reality, their bank accounts are about to be destroyed.
Unfortunately, this is the case for most Americans. Their expenses simply match or even exceed their income. They do not learn from the ants and they are not wise. They just spend what they get. If you don't think that's the case, look at a study of savings rates, emergency fund levels, net worth, and so on. The results are so bleak that they border on the unbelievable.
A person can earn a great salary as we discussed in step one. But if he doesn't learn from the ants and spend it all, he's no better off at the end of the day.
That's why it's so important to spend less than you earn. In fact, it is vital. I call the difference between what someone earns and what they spend"the gapAnd it's the key to financial success. The bigger your gap, the more you save and the more fuel you have to top up your net worth.
So take a lesson from the ants and devise a plan to save a little of everything you earn for the future. Because we all know that winter is coming and the wise are saving for those times.
Step 3: Invest
"Dishonest money fades away, but he who collects money little by little makes it grow." - Prov. 1:11 p.m
From what was saved, the sage now takes every part and invests it little by little. From then on, the “miracle” of compound interest begins to take hold.
It starts small but gains momentum over time. The invested money starts to grow by itself. A little more is added here and there. That too is starting to grow. Over time, investments reach the point where they become the investor's primary wealth generator. Simply by investing little by little over a long period of time – andTime is the key to investment success- the money grows to a large sum.
Of course, the question arises as to where to invest. The Bible provides guidance in this regard, encouraging us to diversify our investments to protect ourselves from any disaster (Ecclesiastes 11:2). From there, the possibilities are almost limitless. Personally, I first invested in low-cost index funds to grow and then switched to real estate for income before retirement.
Apply these three steps and you can't help but build wealth. It's both Bible wisdom and basic math: earn a good salary, save and invest some of it, and get rich over time.
Wealth isn't just about us
As I said before, the purpose of getting rich isn't to retire in style or have a good life. There is nothing wrong with enjoying the blessings of the Lord, of course, but living high on the pig is not the primary purpose of life in my opinion.
Instead, I would like to suggest that our primary purpose for money is to help others—to give of our surplus so that the needs of others can be met.
In the Bible there are many verses and promises about giving. One that just amazes me is Proverbs 19:17 (NIV):
"Whoeveris kind to the poor, lend to the LORD, and he will repay them for what they have done.”
There are a few reasons why this verse blows my mind:
- Imagine "lending to the Lord." How is that even possible? That we would lend him something that he would then 'owe' us (which is implied since a loan is being made) seems crazy! The Lord has given us so much and given so generously that the thought that He owes us anything seems impossible. And yet the verse says that when we are kind to the poor we are lending to the Lord. Of course, "being kind" can include both monetary and non-monetary actions, but certainly giving money to help the poor would be considered kindness.
- Who Wants to Be Rewarded by the Lord? My guess is that the answer is "everyone". If so, this verse tells how to be rewarded.
Some of the greatest joys in my life have come from earning excess wealth and being able to give to others in need. Giving is more blessed than receiving, but I can attest that it's also more fun and rewarding.
One hope for my blog is that people will apply the principles I discuss there, build wealth, and help others who are less fortunate. This in turn creates a virtuous circle - when people bless others, they will surely be blessed themselves. I hope this post helps you become part of the cycle of blessings.
Editor's note: I love this advice from ESI! I love even more that it's in the Bible. For believers, the teachings of the Bible should be the way we filter our decisions, even when it comes to money. If you would like to delve further into this topic, you can access my resource pageall verses about moneyI found in the Bible.
Questions for discussion:How has the Bible shaped your views on money and personal finance? In what area do you struggle the most - earning, saving, or investing? Why so? If you could change one thing about your personal financial situation, what would it be?
Image courtesy of jm1366 at FreeDigitalPhotos.net
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