• Biblical Finance Class - Living Part 5

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    Biblical Finance Class - Living Part 5 is the last course for the biblical living section. This section highlights important aspects about managing money so be sure to catch Part 1, 2, 3, and 4 if you missed them. In part 5 we discuss a key point about managing our personal finances which is saving/investing your money! This is an instrumental part of money management and a definite biblical principle. Check out the video below and think about how you can grow the money God has entrusted you with.

    When you are ready to invest, there is a proper time to invest (see Investing if You're Broke!?! for more information), be mindful to diversify your money. As we discussed in the video placing all your money in one stock, one real estate deal, or on investment hoping that you strike rich is risky and in most situations unwise. Check Ecclesiastes 11:1-2 which is a great principle stating we should invest in 7 or 8 different areas because we do not know what the future may bring. To expand on ways we can invest our money here is an expansion of the three ways mentioned in the video.

    1) Invest in Yourself
    Investing in yourself is underrated but it is one of the best ways you can increase your income. Your best money making asset is you, so do not forget to invest in your God given gifts. Going to college, a trade school, taking personal development classes, or even renting a book from the library and applying it are all ways to improve yourself. As I stated in the video, going into debt for this investment is not wise. Ask yourself, how can I improve myself without incurring debt? It is very possible and may take some creativity. Even if it is something as simple as reading a book and practicing what you've learned can be enough to start a new successful business. It may not be easy,  but it is possible!

    2) Invest in the Stock Market
    Investing in single stocks is not a wise way to invest your money. Having all of your eggs in one basket in financial situations is super high risk in layman's terms... gambling. I believe speaking with a good financial adviser, counselor, or coach about mutual funds is a great way to invest in stocks. For tips on interviewing them check out Biblical Finance Class - Living Part 4. Investing in mutual funds is not a get rich quick scheme, it is something that may take some time. In fact, most of us who have jobs probably have the opportunity to invest in a 401K for retirement. When you are out of debt with an emergency fund of 3-6 months investing in mutual funds in a 401K is one of the best ways to get rich over time. That's why it's important to invest in yourself without using debt so you can have money to invest as early as possible. An IRA or Individual retirement Account is another tax shelter that you can use to invest in mutual funds for retirement. For both the 401K and IRA, a Roth is a great option because you can add after tax dollars into them which means taxes are not paid at the time you begin to withdraw from the account. If you need help with understanding a 401K or IRA please feel free to contact me at foffcoaching@gmail.com.

    3) Invest in Real Estate
    Having real estate is a great way to build wealth even if you do not want to be a landlord or flip homes. There is absolutely nothing wrong with renting especially for a specific time to achieve a certain goal such as getting out of debt or moving to a new city. At some point I hope your goal would be to buy and own a home. This is important in growing your money because homes typically increase in value over time. This means if you bought a home for $100K and it's worth $120K you would make $20K once the purchase is complete. Deals like that can be hard to come buy depending on the market so lets change the scenario somewhat. Let's say you paid $100K for a home that was worth $100K (which in my opinion is not a great deal). If the value of the home increase by $20K in 5 years you would have made $20K just for living in your home. Obviously, there are no guarantees in market increases but historically homes tend to increase in value. This is why it is important to obtain a good real estate agent when buying a home as well as being mindful of where you buy. Even if you don't want to flip or rent property buying a home one day helps greatly with increasing your net worth over time. Remember invest in 7 or 8 things, so even if you have mutual funds in the stock market you may want to be diversified even more by having real estate.

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