Updated: May 4
Let's break down the idea of stewardship from a Biblical point of view.
We’re going to look at what it means to invest, not impulsively, but rather through the lens of a key Biblical principle we often talk about here at Lord and Richards. Proverbs 13:11 says that gaining wealth hastily will diminish or dwindle, but whoever gathers little by little, will increase it.
If you listen to our radio show regularly, you probably have caught on that we often discuss the principle of risk management from this verse, reminding ourselves that trying to invest in a “get rich quick” scheme usually ends in disaster, as opposed to those who save little by little over a long period of time.
Typically, we’ll look at this from a risk management perspective but today we’ll look at it from a bit of a different angle. We’re going to break down what it means to think like a billionaire, not that you can become a billionaire necessarily but mainly so that you understand how money compounds and develops into a large wealth pool over time.
First, what we’ve discovered is that the people who have been most successful in accumulating wealth, have a written plan in place. And at Lord and Richards, you know we are all about getting you a written financial independence roadmap so that you’re financially independent from your job and do what God has called you to do: spend time with the people that you love, doing the things you love, for the glory of God.
I recently watched a movie on this about Richard Williams who was the father of Venus and Serena Williams. I’m sure many of you know them from tennis fame. If you’ve followed their careers at all, his name would come up as the kind force behind their success. Of course, they had great ability and talent, and put in a great amount of effort. But they also had a father who willingly led them down a path that allowed them to fully explore and develop their abilities. And Richard was known for having a plan.
In the movie, he had a poster up on the chain link fence where they practiced in the slums of Los Angeles, right where the girls could see it as they hit the ball over the net: “failing to plan is planning to fail.” It’s quite remarkable considering that we’ve done a lot of looking into that principle. So let me remind you that the greatest outcomes come because of planning, and especially writing things down like that poster on the back of the chain link fence.
You and I can get things written down that will help us better achieve our goals financially and otherwise. Once you do have a plan in place, be careful not to make radical, sudden, dramatic, financial moves.
The greatest outcomes come because of planning
And I think we can best illustrate this from the world of piloting. My wife has her pilot’s license, and her father had his pilot license before her. They both flew small planes, Cessna 310, and so forth. I remember my father-in-law teaching that when flying a plane, make small adjustments.
We learned in piloting that making sudden adjustments can result in disaster. So the principle we want to derive from Proverbs 13:11 is a “little by little” approach, a gradual approach. Even when making changes and adjustments in our portfolios, we don’t want to have sudden dramatic swings, buying and selling rapidly, moving in and out of investments, or trying to time the market, which is one of the great fallacies.
When you time the market, you have to be right every single time. If you get out at the right time, but you get in at the wrong time, it’s a useless endeavor. So once again, don’t make sudden dramatic moves, instead make small course corrections along the way.
Another key principle is to avoid a “recovery.” We talk about recoveries a lot in markets but sometimes we need to realize that when we put our portfolio in the wrong place and haven’t followed a written risk management plan, then we can place ourselves in a position to wait while we recover from a down market.
I personally think of recovery as a good thing, but after a bad thing, right? Think of it like this; years ago when I had surgery, the surgeons operated on me, and then I went into recovery. It’s good to recover. But it also would have been better if I had never gotten that injury in the first place. I tore my ACL and had to go through the surgery, but it sure would have been nice to avoid all that, right?
Once you go through something like that, the point is to make a mental note: I’m not going to do that again.
Some people tend to swing to one extreme, go to cash and never participate again. Unfortunately, a lack of growth usually means a dead-end plan. We run plans where people are heavily in cash and will do projections out into the future based on real scientific data. Most people in that position just aren’t going to make it, so you’ve got to have the growth. The challenge is how do we get growth with risk management?
That’s where we come in. You want to pre-position your portfolio for steady, consistent, low volatility growth again, gathering little by little. Soon, you’ll start to see that increase as opposed to making a hasty move that causes your wealth to diminish or dwindle.
One of the things we work on with people is to establish a regular savings pattern having money automatically drawn out and deposited into investment accounts that can grow. But of course, as I’ve said, you need to have a written risk management plan to make sure you don’t experience recoveries.
You know that children of this world are wise in their own eyes but often God’s people are a little naïve. This is a principle that God Himself has set out and if we follow it, we will experience success-we’ll see wealth increase.
We talk to people just like you every single day and I would love to personally have a chat with you. Our entire mission is to help people become financially independent.
Visit us at lordandrichards.com or call (720) 214-6801.