Pursue Wealth to Help Build God’s Kingdom
- Whitney Hopler Contributing Writer
- 2004 7 Jan
Wealth, in itself, isn’t sinful. In fact, pursuing wealth isn’t just okay – it’s actually a Christian duty. That’s because wealth that is gained and used properly is a powerful tool to advance God’s kingdom on earth. While God won’t answer “name it and claim it” prayers focused on acquiring wealth for selfish purposes, He will bless those who seek wealth to help support His kingdom work. The more money you have, the more you can help others and spread God’s message of love and redemption.
Here are some ways you can pursue wealth to help build God’s kingdom:
* Tithe. Remember that God has promised to bless those who give obediently, generously, and cheerfully. Give one-tenth of your income to support the work of your local church.
* Be a good steward of what you already have. Know that God will only trust you with more money if you can show Him that you’re wisely managing the amount you already have.
* Proclaim God’s promises. Speak promises from Scripture aloud and believe that God will bless you according to His will. Then eagerly expect Him to move to fulfill those promises as you wait. Understand that He is a loving Father who loves to give good gifts to His children.
* Work diligently. Never expect something for nothing. Avoid “get rich quick” scams, gambling, and other avenues to “easy money.” Realize that God will bless your honest, hard work with fair wages because He has designed it that way.
* Write down your financial goals. Know that writing them down will make them more attainable. First, list long-term goals. Then, break those goals down into smaller tasks you hope to complete to accomplish your long-term goals.
* Create a budget. Determine your net income, list your expenditures, and live within your budget. This means that you should pay your taxes and tithes, save and invest at least 10 percent of what you make, then live on the rest of your income.
* Remember that the key to wealth is not what you make, but what you save and invest. Tap into the power of compound interest by focusing on saving and investing to make your money grow.
* Determine your risk tolerances and investment objectives. Think and pray about these carefully. Then keep them in mind as you choose investment vehicles.
* Open a brokerage account. Allocate a minimum of $500 to get started in a good mutual fund.
* Diversify your assets. Spread your money among mutual funds or carefully selected stocks. Invest with growth as your goal. Don’t own more than eight equity mutual funds, or more than three of any one sector of funds. Remember that your stock portfolio should contain no more than 15 stocks.
* Carefully research potential mutual funds. When considering which fund to choose, keep in mind that common stocks (such as real estate, art, coins, corporate and government bonds, CDs, and money markets) have historically outperformed all other investments. Also consider a fund’s “beta” (the measure of it’s variability relative to some market measure) to make sure it matches your risk tolerance level. Review the fund’s track record (for one year, three years, and five years) and make sure it’s current manager is the same person who produced the track records you’re reviewing. Make sure that a growth fund’s expense ratio is below 1.90 percent, and that a bond fund’s expense ratio is below .90 percent. Study the fund’s duration and portfolio turnover (less is better in both cases). Look at the fund’s Sharpe ratio for risk-adjusted performance; the higher, the better.
* Carefully research potential stocks. Only buy stocks that are listed on the NYSE, ASE or NASDAQ. Make sure that stocks you buy have current quarter increases in earnings per share of at least 25 percent, annual increases in earnings per share of 20 percent, and a forecast for next year’s earnings per share of 30 percent. Also make sure that earnings growth doesn’t come from nonrecurring profits. Buy only stocks that have a minimum EPS rank of 80. Avoid stocks that have more than five times the P/E ratio of the market. Consider each stock’s long- and short-term debt. Only buy stocks that have a Value Line timeliness rank of 1, 2 or 3. Read financial newspapers like Investors Business Daily and the Wall Street Journal to get regular updates on market performance.
* Analyze stock charts. Remember not to buy a stock on a breakout that is not accompanied by a significant increase in volume. Look for a minimum of one and one-half times daily volume (the higher the volume, the better). If the relative strength line is in a downward trend, don’t buy the stock. Purchase only stocks with an accumulation/distribution ranking of C or better (preferably A or B). In a bull market, purchase only those stocks that have a relative strength rank of 75 or higher (in a bear market, stick as close to that line as possible, realizing that many good growth stocks fall below that ranking in a declining market).
* Know when to sell. Keep these selling rules in mind: Sell a stock if it breaks below an upward trend line, if you bought it on a breakout and the breakout fails, or if its timeliness rankings as published in Value Line drops below a 3. Consider selling if a stock’s EPS ranking drops more than 10 points, if it is trading 50 percent higher than its 10-week moving average, if it shows two consecutive quarters of slower earnings growth, or if the accumulation distribution ranking drops below a C rating as published in Investors Business Daily.
* Keep a positive attitude. Realize that everyone makes mistakes. Seek to learn from whatever mistakes you make. Know that the more you study and learn, the less you should go astray in the process of building wealth for God’s kingdom.
Adapted from Mission Possible: An Investment Guide for Christians, copyright 2002 by Stephen H. Hammond. Published by Pathway Press, Cleveland, Tn., www.pathwaypress.org.
Stephen Hammond is a finance graduate of Georgia Southern University and has 16 years of successful experience in finance and securities. He has worked with Fortune 500 companies, such as Merrill Lynch, and has completed advanced studies in pensions and profit-sharing. In 1993 he established Coastal Asset Management in Savannah, Georgia – one of the first “fee-only” investment advisory firms in the state.