11 Ways The Bible Can Teach Us About Financial Freedom
Everyone is always wanting to look forward; be progressive. But how often do we take time to look back on what God has already taught us? King Solomon was known as the wealthiest man in the world, living around 3000 years ago. He was also one of the wisest, and left a lot of wisdom behind. But what does this have to do with a blog about financial freedom? Well, a lot, actually. Below are 11 ways the Bible can teach us about financial freedom today
1) Hard work:
Proverbs 10:4 – Lazy hands make for poverty, but diligent hands bring wealth.
Proverbs 14:23 – All hard work brings a profit, but mere talk leads only to poverty.
Proverbs 12:24 – Diligent hands will rule, but laziness ends in forced labor.
We won’t reach financial freedom without hard work. In our society today, it can be difficult to spend less. There is constant marketing all around us trying to convince us to give our money away for some item that is promised to give us happiness. Whether that’s a new car, the latest iPhone, or whatever new technology is released. But there’s been so many times that making that purchase didn’t bring me happiness. And in fact, sometimes, did quite the opposite.
Using our income to provide real happiness for us looks like:
- The freedom of choice. If I’m miserable at my current job, I know I have money saved which gives me more flexibility on whether I want to pursue new opportunities or not.
- Not stressing about paying for repairs if your car breaks down, or if your dishwasher breaks and you need to purchase a new one.
- Being able to give back to others in need.
But none of this can happen without hard work. You have to get out there and do something. Having ideas is good but it doesn’t mean anything if you just sit around and talk about them all day. I wouldn’t have started this blog if it wasn’t for my wife being so encouraging and nudging me to follow my dreams. I’ve talked for years about starting a blog, but I wasn’t sure if I was ready to work hard at it. There were also fears about being completely transparent with our finances and fears about putting myself out there. I’m not positive how successful this blog will end up being, but I know it won’t get there without hard work.
2) Stay clear of debt:
Proverbs 22:7 – The rich rule over the poor, and the borrower is slave to the lender.
There are several forms of debt in our world today. We have:
- Credit cards
- Auto loans
- Student loans
- Every retailer seems to have their own financing (Sign up now for 5% off your purchase!)
It’s important to be very careful and diligent when using debt. What value is this debt going to bring me? Is this debt that is going to increase my net worth or bring in future income, or is this debt going to something useless? There’s people that would argue that there is good debt and bad debt. In my eyes, good debt can only be good if it’s going to create greater value than the debt you took on for it.
Some good debt examples include:
- Purchasing a rental property with financing that will generate rental income for the rest of your life.
- Buying a degree with student loans that will increase your work income significantly.
- Credit cards IF you pay them off every month to earn the rewards. This one you have to be careful about because for us it’s a lot easier to spend money when you’re using credit versus using cash or a debit card. I don’t know why, but it just doesn’t feel as real, and that makes it easier to spend.
- A mortgage to purchase a home within your means. Buying a property can pay off significantly in the long run instead of renting because you’re building equity and at some point, the principal and interest payments will diminish leaving you with a lower overall payment.
Some bad debts examples include:
- Buying the latest iPhone every year.
- Buying a $50,000 vehicle when you’re only making $50,000 a year. (Although really, I feel like at no income level should you ever buy such an expensive car. Warren Buffet, the richest investor in the world, still only drives a $30,000 car.)
- Buying way more house than you need. (We might be an example of this one, unfortunately.)
- Taking out credit cards at J.C. Penney and Target to buy unnecessary stuff that you don’t need.
Debt is constantly working against you and makes you a slave to the debtor. It should only be used diligently and only if it creates true value.
3) Saving a little amount each month makes a difference!
Proverbs 13:11 – Dishonest money dwindles away, but whoever gathers money little by little makes it grow.
A portion of each paycheck we earn goes to our savings and investments. Little by little, month by month, it has grown considerably. In the last 5 years, we have gone from a net worth of $0 to over $300,000, just by spending less than we make and saving the excess. I don’t mean to share this to brag about the success we’ve had, but to share light on the fact that little amounts can absolutely add up over the years.
4) Diversify your assets:
Ecclesiastes 11: 2 – Invest in seven ventures, yes, in eight: you do not know what disaster may come upon the land.
It’s important to diversify your assets. If you had all your money in Enron 2001, or went 100% stocks and sold in 2009, then you would know first-hand how important diversification is. If one asset were to fail, it’s vital to still have others. “Don’t put all your eggs in one basket” the saying goes. There are many types of assets such as real estate, stocks, bonds, cash, precious metals, cryptocurrency, etc. It’s good to figure out how you want to allocate across these assets and stick to that allocation.
Our asset allocation is:
- 70% Stocks (split between domestic and international)
- 25% Bonds
- 5% Cash, Precious Metals, and a small amount of Cryptocurrency.
I don’t recommend this allocation for everyone. Your asset allocation should be determined from how much risk you’re willing to take.
5) Don’t fall for trying to keep up with the Jones’:
Proverbs 13:7 – One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.
I see people all the time driving expensive cars, living in expensive homes, wearing expensive clothes, and yet their net worth is near zero. They have high incomes, but they’re poor. They’re poor because they spend every dollar they make. And others will see these “rich” people and aspire to be like them, trying to buy the same things they also can’t afford. It’s no doubt our country is carrying so much debt. So many of us are trying to live above our means, buying useless stuff that adds nothing to our net worth. Instead, we should be saving that money and investing it in assets that can get us closer to financial freedom.
6) Invest in yourself:
Proverbs 3:13-14 – Blessed are those who find wisdom, those who gain understanding, for she is more profitable than silver and yields better returns than gold.
Proverbs 8:11 – For wisdom is more precious than rubies…
It’s important to be continuously investing in yourself. Learning and studying shouldn’t end when you graduate college. You are a brand. You’re constantly marketing yourself in this world. The more you learn and know, the higher your income possibilities become. On top of increasing income, I feel happier when I’m dedicated to studying and learning more. It brings joy to my life the more knowledge I gain.
7) Don’t fall for get rich quick schemes:
Proverbs 21:5 – The plans of the diligent lead to profit as surely as haste leads to poverty.
I feel like every time I browse the internet these days, there’s always some false promise to make me rich quickly if I buy some product. “Want to make a million dollars with this one simple trick?” Ever seen a post like that? This is simply a lie. There isn’t a way to get rich quick unless you hit the lottery. You simply have to spend less than you make and save the excess. It’s a long and slow process, but it’s the only viable way to create long lasting wealth.
8) Building relationships and networking:
Proverbs 14:20 – The poor are shunned even by their neighbors, but the rich have many friends.
Proverbs 19:4 – Wealth attracts many friends, but even the closest friend of the poor person deserts them.
Proverbs 15:22 – Plans fail for lack of counsel, but with many advisers they succeed.
It’s important to network and build relationships on your journey to financial freedom. For us, that really means getting out of our comfort zone. Neither of us are typically out-going or very social people, but making friends and growing relationships is crucial to success. We won’t be successful at the end of our journey without people there to help us and spur us on. We need each and every person around us to continue to be encouraging along the way.
9) Keep your integrity along the way:
Proverbs 22:1 – A good name is more desirable than great riches; to be esteemed is better than silver or gold.
What good is all the riches in the world if you’ve lost yourself? Be honest and humble along the journey. I can’t imagine ever wanting to be the richest person in the world, but be known as the biggest liar and cheater. There’s no way that in the end I would be happy with my life if that’s what I had become.
10) Be generous along the way:
Proverbs 11:24-25 – One person gives freely, yet gains even more; another withholds unduly, but comes to poverty.
Proverbs 22:9 – The generous will themselves be blessed, for they share their food with the poor.
Proverbs 28:27 – Those who give to the poor will lack nothing, but those who close their eyes to them receive many curses.
It’s important to give back, and the ability to give back is one of the main reasons I want to achieve financial freedom. There’s so much joy in being able to help someone else out in need. My wife and I gave around $3,000 last year and we enjoyed doing it immensely. We’ve since scaled back our giving since we’ve let our spending get out of control, but giving that money away really gave us enjoyment. We understand that there are so many people in the world that are less fortunate and we feel it’s important to give back. I remember hearing our pastor at church once say, “God blessed you so you can bless others.” It’s important to remember that!
11) And finally, the people with you on your journey are more important than your money.
Proverbs 11:4 – Wealth is worthless in the day of wrath, but righteousness delivers from death.
This is a great reminder that along our journey to financial freedom, all the wealth in the world doesn’t matter at the end of the day if we don’t love others and love God!
I hope this post has helped bring to light that wisdom from 3000 years ago is still very relevant today and is very applicable to your journey towards financial freedom. Please leave a comment and let me know what you think!