(Part 3 Final part)
After reviewing whether or not we should invest our money as Christians, I am going to go over a few investing tips and options for beginners.
1. Pray and seek God as to what you are suppose to do with your money.
Jeremiah 29:11 For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you a future and a hope.
:12 Then you will call upon Me and go and pray to Me, and I will listen to you
:13 And you will seek Me and find Me, when you search for Me with all your heart.
As God has said he has plans for his people to prosper, he has our best interest in mind so if we seek him he will listen and guide us towards his will.
2. Seek guidance from your spouse or parents if you are not married
Colossians 3:18 Wives submit to your own husbands, as is fitting in the Lord
This doesn't exclude husbands Paul also states in Ephesians 5:21 Submit to one another in the fear of God. Jesus also said Matthew 12:25 "And Jesus knew their thoughts, and said unto them, Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand".
Concerning unmarried individuals Ephesians 6:1 Children, obey your parents in the Lord, for this is right. :2 Honor your father and mother, which is the first commandment with promise:
If you seek guidance from your parents or your spouse and they disagree with you, you need to consider their guidance and not dismiss it. If you go behind your spouse's back God will not put his blessing on your actions no matter what your intent. Both spouses need to be on the same field and work together. God has also placed parents in our lives to give us guidance, there were many times I thought my Dad was wrong but obeyed his guidance and avoided scams and fraud. If you absolutely feel the other person is wrong seek God and ask him to change their perspective if He wants you to go through with it.
3. Consider your investment options and pick the best fit for your situation.
I am going to list a few common investment options and explain them each in a short summary
1. Stocks.
A stock is a part ownership in a company and your liability to the company is limited to the amount of money you invested. Meaning worse case scenario you lose 100% of the money you invested. What I like about stocks is you have the potential to have far greater gains then any other investment dollar for dollar. Research should always be done carefully, seek advice from professional analysts if possible many reports can be obtained through yahoo finance or online brokerage services. Before selecting a stock or brokerage service be sure to know all the commission costs and trading cost. Some websites will charge a monthly fee for inactivity so be sure to know all the possible costs.
When deciding how much money to invest take the commission price for a buy and sell say $10 for each so a total of $20 then say you only want to invest $300 you divide the commission by the dollar amount
1. Pray and seek God as to what you are suppose to do with your money.
Jeremiah 29:11 For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you a future and a hope.
:12 Then you will call upon Me and go and pray to Me, and I will listen to you
:13 And you will seek Me and find Me, when you search for Me with all your heart.
As God has said he has plans for his people to prosper, he has our best interest in mind so if we seek him he will listen and guide us towards his will.
2. Seek guidance from your spouse or parents if you are not married
Colossians 3:18 Wives submit to your own husbands, as is fitting in the Lord
This doesn't exclude husbands Paul also states in Ephesians 5:21 Submit to one another in the fear of God. Jesus also said Matthew 12:25 "And Jesus knew their thoughts, and said unto them, Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand".
Concerning unmarried individuals Ephesians 6:1 Children, obey your parents in the Lord, for this is right. :2 Honor your father and mother, which is the first commandment with promise:
If you seek guidance from your parents or your spouse and they disagree with you, you need to consider their guidance and not dismiss it. If you go behind your spouse's back God will not put his blessing on your actions no matter what your intent. Both spouses need to be on the same field and work together. God has also placed parents in our lives to give us guidance, there were many times I thought my Dad was wrong but obeyed his guidance and avoided scams and fraud. If you absolutely feel the other person is wrong seek God and ask him to change their perspective if He wants you to go through with it.
3. Consider your investment options and pick the best fit for your situation.
I am going to list a few common investment options and explain them each in a short summary
1. Stocks.
A stock is a part ownership in a company and your liability to the company is limited to the amount of money you invested. Meaning worse case scenario you lose 100% of the money you invested. What I like about stocks is you have the potential to have far greater gains then any other investment dollar for dollar. Research should always be done carefully, seek advice from professional analysts if possible many reports can be obtained through yahoo finance or online brokerage services. Before selecting a stock or brokerage service be sure to know all the commission costs and trading cost. Some websites will charge a monthly fee for inactivity so be sure to know all the possible costs.
When deciding how much money to invest take the commission price for a buy and sell say $10 for each so a total of $20 then say you only want to invest $300 you divide the commission by the dollar amount
Commission/Dollar amount = 20/300
= 0.067 or 6.7%
= 0.067 or 6.7%
This means you will have to have at least a 6.7% gain in value just to pay commission so unless you realistically feel you can achieve that you should consider investing more money in one stock
2. Mutual Funds
A mutual fund is a portfolio with a selection of stocks picked by professionals and managed. If you know nothing about the stock market and do not plan on learning this is your safest bet if you want to invest in stocks. I would recommend doing some research on the funds investment philosophy to insure they met your moral criteria for example as a Christian I would want to make sure they fund had a conservative or Christian investing style to avoid investment in the so called sin stocks, such as porn industry, tobacco, or alcohol companies. This can be done by searching the Mutual fund's name and looking for investment style or philosophy.
3. Bonds: Federal, State, Local and Corporate
A bond is basically a loan and you receive the interest payments as well as the final lump sum of the money you lended. There is less risk involved with this type of investment and you can receive monthly interest payments; but because of the less risk involved there is also less of a return say maybe only 4 or 5 percent. You may not always want to just pick a bond with a high interest rate because it may be adjusted for default risk. There are ratting systems for example AAA being the best and D being the worse. If the company defaults you could end up losing the majority of your money so if you want to take a riskier investment such as a B- you will want to research the company and determine if it has a chance of surviving.
4. Commodities
This is something that I am not as familiar with as others, but the general traded comodities are gold, silver, oil and wheat, corn or other grains. Then benefit of this is some may feel even if the value decreases the form of invest still holds some value. For example if the value of corn decreases 50% it can still be a valuable resource to a farmer even though he can now buy it half off. Gold has been very popular and has increased significantly over the last ten years but I generally being a contraian invester feel it may be overvalued.
5. Real Estate
Your house, land or rental properties are an investment. And many people have made a living out of investing in real estate. You have plenty of options and if ran properly owning rental properties can provide a high return or land or even your house. For example my parents bought a home for around $70,000 put around $30,000 into it and sold it for around $150,000 in 5 years they had a 50% return during those same 5 years the stock market was stagnent with only small returns. There is also a great risk to real estate investment because repairs and maintenance can quickly out weight your potential returns.
Each option has its pluses and minuses but if one of these stuck out to you more then the others do more research on it and decide which option suits you best. A lot of professional investors focus on two or three and sometimes all of these options. So you don't have to limit yourself to one.
2. Mutual Funds
A mutual fund is a portfolio with a selection of stocks picked by professionals and managed. If you know nothing about the stock market and do not plan on learning this is your safest bet if you want to invest in stocks. I would recommend doing some research on the funds investment philosophy to insure they met your moral criteria for example as a Christian I would want to make sure they fund had a conservative or Christian investing style to avoid investment in the so called sin stocks, such as porn industry, tobacco, or alcohol companies. This can be done by searching the Mutual fund's name and looking for investment style or philosophy.
3. Bonds: Federal, State, Local and Corporate
A bond is basically a loan and you receive the interest payments as well as the final lump sum of the money you lended. There is less risk involved with this type of investment and you can receive monthly interest payments; but because of the less risk involved there is also less of a return say maybe only 4 or 5 percent. You may not always want to just pick a bond with a high interest rate because it may be adjusted for default risk. There are ratting systems for example AAA being the best and D being the worse. If the company defaults you could end up losing the majority of your money so if you want to take a riskier investment such as a B- you will want to research the company and determine if it has a chance of surviving.
4. Commodities
This is something that I am not as familiar with as others, but the general traded comodities are gold, silver, oil and wheat, corn or other grains. Then benefit of this is some may feel even if the value decreases the form of invest still holds some value. For example if the value of corn decreases 50% it can still be a valuable resource to a farmer even though he can now buy it half off. Gold has been very popular and has increased significantly over the last ten years but I generally being a contraian invester feel it may be overvalued.
5. Real Estate
Your house, land or rental properties are an investment. And many people have made a living out of investing in real estate. You have plenty of options and if ran properly owning rental properties can provide a high return or land or even your house. For example my parents bought a home for around $70,000 put around $30,000 into it and sold it for around $150,000 in 5 years they had a 50% return during those same 5 years the stock market was stagnent with only small returns. There is also a great risk to real estate investment because repairs and maintenance can quickly out weight your potential returns.
Each option has its pluses and minuses but if one of these stuck out to you more then the others do more research on it and decide which option suits you best. A lot of professional investors focus on two or three and sometimes all of these options. So you don't have to limit yourself to one.
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