Why does God want us to invest? Because when our money works for us, we can work less. Then we have more time for family, servants and ourselves. So what is God’s concept of investing?
PRINCIPLE ONE
First of all, in order to invest, you simply need to have funds. Let’s not invest money that is borrowed. When I teach about managing the household budget, I say to systematically save some money and then invest it so that it brings in more money. Our personal first experience with investing brought us losses and… freedom. Freedom from some of the money ;), but above all, freedom from fear. It’s true – we suffered a loss, but we didn’t put all our life savings into the investment (a pool for saving is one thing, and another for investing). So we were still living at the same level as before. We were sorry and sad for the loss, but we got rid of the fear of loss. Many years have passed since then. We have never suffered such a great loss since. We learned a lot. We make a loss from time to time, but in general we already know where and how to invest to make it profitable, and what loss we are willing to accept. This is what makes an investor different from a gambler.
It is not about the fact that one invests, for example, in the stock market, and the other plays in a casino. In fact, a real investor realizes what a loss he is willing to incur, i.e. he knows when to withdraw from the wrong investment. A gambler, on the other hand, does not have a “plan B”. It only assumes that everything will go well – which is obviously a wrong assumption. As the well-known investor Warren Buffet says, there are no bad investments, there are only bad investors.
PRINCIPLE TWO
When I teach about investing, the most common question people are “But what do I invest in?” My answer usually is: “Start saving money for investments and gain knowledge about investing. Read a few books, go to some training.” Why? You need to know the market you want to invest in. We often associate investments with the stock market, real estate, gold, etc. However, I know people who invest (and make a lot of money on it) in shoes, audio equipment, and even Lego bricks!
This is what the investor in Jesus’ parable did. He knew the people (their abilities) to whom he entrusted talents, and he made the so-called diversification, i.e. he invested in different “markets”, assessing their capabilities in a different way. A practical example would be, for example, investing part of your money in silver, another part in real estate; Still other funds can simply be put aside for a deposit. To invest, you need to know the market you are operating on and wisely distribute your investment risk.
PRINCIPLE THREE
After a long time, the master of these servants returned and began to settle accounts with them (Matthew 11:11). Matthew 25:19. It is important to know for what period we are undertaking the investment. There is an ironic joke circulating among investors: “What is a long-term investment? This is a short-term investment that has failed.”
When we start investing, the fight against two emotions begins: greed and fear. In practice, it looks like this: A novice investor buys shares. Suppose he decides to exit the investment when the profit is 10% or when the loss is 3%. However, when the value of the shares begins to rise – by 7%, 8.5%, 10%, 12%, 13.5% – the investor calculates that he will withdraw with a profit of 15% (greed). Most often, it withdraws with a profit of about 3%. It also happens the other way around – the value of shares begins to fall by 1.5%, 2%, 3% and instead of withdrawing, the reckless investor usually naively waits for it to “bounce back” and then withdraws at a loss of 10%. This is precisely being guided by greed, which blinds.