The debate has been played out many times on social media. What is the best personal finance book of all time? What is the oldest really good book on money, personal finance and wealth?
Many titles get a nod. The same names crop up again and again and for good reason. But one book is always missing from the list; a book brimming with massive advice on money and wealth. It amazes me people in the personal finance community always miss it.
Of course, I’m talking about the Bible, and what better time to discuss personal finances and the Bible than Christmas?
Before you click away, reconsider. I know some of you are not people of faith. I get it. I know some of you are devout. I get that too. For both groups, and everyone in between, you might want to take a seat and digest the following information. You might be surprised at what you have been missing. There is at least several dozen Ben Franklin’s worth of money advice in the Bible. And you have a front row seat this evening as we engage a brief review.
A Proper Reading
There is a reason many people have lost faith and why people of faith have missed so much good stuff in The Good Book. They have been reading the Bible wrong.
There are three ways to read the Bible: as a historical record, devotionally and as Living Literature.
People of faith dig in for the devotional inspiration and faith building. People like me want to pick apart the historical record and get lost sometimes on the difficulties between secular discoveries and Biblical teachings.
While a devotional and/or historical reading is appropriate, the Bible is best read as Living Literature.
So what is Living Literature? Living Literature is a way of reading a book where you search for significance applicable today. Archetypal stories are a perfect example. The story of Cain and Able and the first murder resonates with people throughout time. Contemporaries understood the meaning. So did folks in the Dark Ages all the way to modern times. The same can be said for virtually every story in the Bible. If you read carefully you will see how it still applies as much today as it did to people at the time it was written down.
Money tops the list! Stories about wealth and money are everywhere in the Bible, but piled high in the gospels of the New Testament and Proverbs in the Old Testament.
All the books on money and wealth we claim are best on social media surveys all find their roots in the Bible.
The book of Job is about having massive wealth—like being the richest man on the planet wealth—and losing it, dealing with the emotions and eventually winning it all back again and more. Not only did Job lose his wealth, he lost his health and family. He was one hurting dude and through it all he kept his head up and his wits about him as his friends chastised him. Unless you never faced a money challenge in your life, Job might be a good book to read. I recommend a Bible with plenty of notes so you understand what was meant by their actions as it pertained to them back in their day. Might I suggest the Lutheran Study Bible. It’s my favorite study Bible to better understand what I’m reading. Consider it a good investment.
Time for money advice that has stood the test of time.
I will start with Proverbs. (Know that all I share here is a small example. Proverbs is brimming with financial advice for living a better and wealthier life. I only scratch the surface in this post.)
Wealth gained hastily will dwindle, but whoever gather little by little will increase it. Prov. 13:11*
Get-rich-quick schemes have been around since the beginning and this might be the earliest warning against such foolishness. And what do you know, dollar-cost-averaging made the list! Slow, but steady is the only way to accumulate wealth that lasts.
The rich rules over the poor, and the borrower is the slave to the lender. Prov. 22:7
Looks like Dave Ramsey didn’t say it first. I rail against debt often enough on these pages and for good reason. (Boy, I caught heck for publishing the post linked.) Almost all money problems start with overspending and debt. Debtors will do things to keep the lender happy normal people would never consider doing and Solomon knew it all those thousands of years ago.
Financial independence is a worthy goal; poverty does not bring the best out of us; debt is an acid that destroys the vessel which hold it. The wording in this passage is brutal: we are slaves to the lender. Now you know why the root of mortgage is death pledge.
Know the condition of your flocks, and give attention to your herds, for riches do not last forever; and does a crown endure generations? Prov. 27:23-24
This is why you need an annotated Bible. People without a farming background may not understand the significance of these words. “Know your flock” is like saying “Pay attention to your investments.” Wealth is fleeting. Many things destroy wealth and quickly. Wealth accumulates slowly through consistent effort, as we saw above.
The last part (does a crown endure generations?) is more about wealth than money; it’s about your legacy. Dynasties make the historical headlines and they all have one thing in common: they end. They usually end because later generation took their wealth for granted and therefore lost it.
Proverbs has a lot to say about leaving a legacy, as well. I’ll let you read Prov. 13:22 on your own.
One who lacks sense gives a pledge and puts up security in the presence of his neighbor. Prov 17:18
Be not one of those who give pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken from under you? Prov. 22:26-27
Both these verses tell a similar story: don’t co-sign a loan except in the rarest of instances and only if you have the means to cover the entire debt yourself!
Co-signing a loan IS a personal debt! As long as that debt is outstanding you are liable. My study Bible has this note for the first verse above: While God’s people should be generous, especially in matters of forgiveness and love, we are to exercise wisdom and prudence in temporal affairs.
Isn’t this what virtually every book on those social media lists say? When you really think of it, it is exactly what personal finance bloggers (including this one) say continuously. The message hasn’t changed in 5,000 years! This stuff works and always has!
Modern Financial Advice
Now we get to move a bit closer to modern times, relatively speaking. Time to talk about all the money advice Jesus gave.
This may surprise the bejesus (a carefully selected word for this instance) out of you, but over half of all Jesus’ parables were about money and/or wealth. That’s right. Jesus spoke more about getting rich than about prayer or faith. The message is clear: God wants you to be rich right here on His green earth!
Once again I encourage you to grab a Bible to read all the stories because we only have space for a tiny fraction of the good stuff. If your library does not have a copy, a local church is sure to be excited to help you out.
The kingdom of heaven is like treasure hidden in a field, which a man found and covered up. Then in his joy he goes and sells all that he has and buys the field. Matt. 13:44
Of course there are many layers of meaning to these words of Jesus. I’ll let you explore the additional, more spiritual meanings, on your own, as we focus on the earthly lesson involving wealth accumulation.
This parable, like so many, seems to encourage bad behavior. Did Jesus just tell people to use secret knowledge to our own benefit? In a way, yes!
Think of it this way. If you find a hidden treasure in a listed stock, would you buy it? Or would you tell the world first so they bought it up, leaving you with crumbs?
If you discovered oil under a tract of land you might be tempted to sell everything you have to purchase said land. And there is nothing wrong with that! No more wrong than doing the same thing to gain everlasting life!
Notice Jesus did not tell you to steal the treasure. If you discover buried gold it is okay to buy the land to get the gold. Stealing is not allowed.
The same applies to business. If I discover a new tax break the IRS did not recognize, I am free to exploit that to my benefit and that of my clients. If Elon Musk invents a new way to produce electric cars he is free to patent his invention to secure his discovery and make oodles of money off it.
The Biblical terminology is different from today because the world when Christ walked the earth was different from today. Replacing farming terms (fields, animals) with technology and inventions brings clearer understanding.
In other words, Jesus gave you solid advice to take steps to secure your wealth, including the accumulation of wealth. It is no different than the behavior you should have when you discover the blessing of Christ and his promise of heaven.
Now we turn to my favorite parable about money. It is a bit longer so I want to tell it in modern terms with comments interspersed. You can read Matthew 25:14-30 for the original.
This is a story about a business owner with three employees. The boss had to leave on an extended business trip so he decided to leave some of the company resources with his team.
To the first employee he gave $50,000 to manage, the second he gave $20,000 and the third $10,000. He determined how much he would entrust with each employee by their level of experience and skillsets.
Now the employee given $50,000 started to invest the money. He put some in an index fund, but most was used to buy quality investments that were priced very reasonably, if you know what I mean. Through hard work, research and shrewd planning, the first employee knocked it out of the park and turned the $50,000 into $100,000.
Likewise, the second employee invested and traded, turning the $20,000 into $40,000.
The third employee took a different approach. He placed the $10,000 he was entrusted with into a napkin and buried it in the ground so he would not lose any of it.
Then the employer returned from his business trip.
He visited with the first employee. “Well, boss,” the employee began, “I took the money you left with me and put a bit into an index fund so we could at least track the broad market. The rest I used to buy assets that were worth more than the seller was asking. A few additional business investments, along with dividends, has turned the $50,000 you gave me into $100,000.”
The employer was delighted! He sang praises to the first employee, and said, “That is remarkable work, my friend. You have performed so well I want you as a permanent part of my business. I started a new division in my company while on the recent business trip. You are the perfect person to run that part of the business. The salary is quite large with plenty of benefits.” The employer patted the employee on the back with a huge smile. “Welcome to the team, son.”
Then the employer visited the second employee. “Well,” said the second employee, “thing were not easy. For a while I thought I might suffer a loss and somebody tried to hack our computer system and steal our assets. But, I kept at it, found good talent to help me get the problems solved and, can you believe it, I turned that $20,000 into $40,000!”
“Believe it!” said the employer. “I had no doubt in your abilities to rise above challenges. For your honest and faithful work I want you as a permanent member of this company. You will get the full package: stock options, pension, massive salary, the works, for this management position.”
Then the employer turned to the third employee. “Well, ah,” started the third employee. “I know you are a hard man, sir, working diligently for your money and would take no risk of losing money, so I buried your money in the ground for safekeeping.” He held out the dirt covered napkin with the $10,000 wrapped in it.
“You idiot!” screamed the employer. “If you know I am such a hard man you would know burying money in the ground is losing money due to lost opportunity cost.” The employer turned, yelling, “Security!”
When several members of security ran in the employer said, “Take the $10,000 from this man and give it to the first employee. Then throw this man out into the street to live with the vermin.
The parable ends with:
For to everyone who has will more be given, and he will have abundance. But from the one who has not, even what he has will be taken away. Matt. 25:29
I think this parable is a powerful statement on our world today as we deal with and complain about income inequality and fairness. I recommend you read and re-read this story again and again and how it neatly fits as much in our world today as that of 2,000 years ago.
Yes, I know I used small amounts of money to tell the story. That is the point! If you do not act diligently with even small amounts entrusted to you, how can you expect to be entrusted with much?
If this story were not in the Bible and instead in the latest book from a guru in the FIRE community, all of us would be tripping over ourselves to sing the praises of such an enlightening and informative message. Those that have will be given more, and those who don’t even try will lose what little they have.
People want to gamble with their money (time the market) for a quick buck, but refuse to start and maintain an adequate retirement funding plan with accounts that offer tax incentives. Is it really that hard? Do you really want to be the third employee?
Perhaps the most important financial advice in the Bible comes from 1 Timothy 6:10:
For the love of money is the root of all evil. (KJV)
Money is not bad; greed is. Working to have money is of vital importance and God places money and wealth front and center. I see so many people suffering financially because they believe “money” is the root of all evil, when that is the furthest thing from the truth. It is the “love” of money that is the problem. Avoid that and you are golden.
There is so much more financial advice than that just in the four gospels and Proverbs. Of course, if you are serious about wealth, you might want to read the entire Bible as Living Literature. The stories still resonate and for good reason. They are archetypal stories dripping with significance. Virtually every bestselling novel and movie can be traced back to some story in the Bible. You just didn’t know it.
Money and wealth are important. And yes, God wants you to be rich. Really rich! Not just in financial terms, but in physical, mental and spiritual terms as well.
Be the first or second employee. Never succumb to the temptation of the third employee.
MERRY CHRISTMAS, EVERYONE!
And God bless us, every one.
* All quotes are from the English Standard Version, except where noted.
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Wednesday 11th of March 2020
What is your outlook on tithing (if you do so)? Specifically, tithing your “first fruits”. Do you view that is pre or post tax? I have heard the argument both ways.
Wednesday 11th of March 2020
Ruth, I always believed the first fruits belong to the Lord. Tithing is a minimum for me, but financially I am further along so that is easier than when I was younger. When tithing I use pre-tax income in calculating the minimum.
Saturday 28th of December 2019
I went over the blog post you mentioned, I feel much more informed before I start to look for a CPA.
Keith, what type of investment do you hold in your taxable account? Have you ever consider Berkshire as alternative to holding index?
Sunday 29th of December 2019
My investments are complicated, William. A full discussion is something I will not do because it would confuse too many. It boils down to "Do what I say, not what I do." An example would be that I hold a high percentage of my portfolio in cash at this time while I publish you should be fully invested at all times in index funds. Solid advice if you have limited investment knowledge or time to research.
I reviewed BRK and never seriously considered it as an investment. BRK is not an index fund. Warren Buffett is a great guy to learn from and if you were going to invest with him you needed to do that 40 years ago. It is difficult to move a boat as large as his. I can do better on my own.
Saturday 28th of December 2019
Great post Keith as always!
1.Do you have any recommendation on hiring the right CPA? How do we go about finding one that can not only manage tax problems but at times also give sound investing advices?
2. Follow up on previous question that we got in touchon a separate blog post, do you continue to keep an eye out for BA, AAPL, MSFT, MO etc? Do you have others in mind?
Thank you, excited to hear back from you!
Saturday 28th of December 2019
I've published on your first question a time or two in the past.
As to question 2: AAPL is a great company that is too expensive right now; MSFT the same; still buying MO; still watching BA carefully. JNJ is on my watch list. I bought 100 shares on SPCE just to keep up on space industry news. It is too early in the game to know who the winners are so SPCE isn't even really an investment. But I do own 100 shares.
The market had a heck of a run in 2019. AAPL is up something like 145 points this year (a near double). MSFT also climbed a lot. I was watching (own 1 share) of UNH. It never got cheap enough and it is up 40 or so points since I started watching. Even MO is 25% off the bottom. I still like MO, however, and have been adding throughout the year. Also selling naked puts on a ladder for MO, too. If the stock declines I am 100% willing to own those shares. With the dividend and put income, MO has been a stellar performer. (Learned how to the the naked put thing successfully from INTC back in the 1990s when they linked the strategy to their share buy-back program.)
Wednesday 25th of December 2019
I think this is exceptionally good post and huge step in the right direction in the whole FIRE community, but there are a few remarks to add. As Jesus taught the mental and spiritual connection to our Father in Heaven is the most important part. The global Babylon (as described in Revelations) of the modern civilization may fall in ruins overnight due to financial crisis, but our faith shall remain strong and help us to guide through the difficult times where each and every one of us may lose everything material they've acquired to this day: “Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come. And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more: The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble and cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.
That's why I think the most important part about Jesus's teachings is the following: “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also.” - Matthew 6 (19:21)
Don't sell your soul for money or anything material, these are just matters to achieve living in this material and sinful world. But always be on a lookout for spiritual meaning of your life and find fulfillment in it which will last even if your money disappear one day.
Merry Christmas and may God bless you all!
Tuesday 17th of December 2019
Back when I had student loans there were two verses from the Bible that struck me.
They were the borrower is servant to the lender and no man can serve two masters.
It never set right with me that I had to serve the lender and not God or whichever other thing I wanted to serve.
So I worked retail until I could pay it all off in one lump sum, many Christmases back.
Turns out I still have to serve until I hit F.I. however I get to choose the terms.