Solomon's Guide to Financial Wisdom
Notes
Transcript
Scripture Reading
Scripture Reading
Cast your bread upon the waters, For you will find it after many days.
Give a serving to seven, and also to eight, For you do not know what evil will be on the earth.
If the clouds are full of rain, They empty themselves upon the earth; And if a tree falls to the south or the north, In the place where the tree falls, there it shall lie.
He who observes the wind will not sow, And he who regards the clouds will not reap.
As you do not know what is the way of the wind, Or how the bones grow in the womb of her who is with child, So you do not know the works of God who makes everything.
In the morning sow your seed, And in the evening do not withhold your hand; For you do not know which will prosper, Either this or that, Or whether both alike will be good.
I. The Twin Dangers of Wealth
I. The Twin Dangers of Wealth
The first danger of wealth is making it too important, replacing the worship of God. Ecclesiastes 5:11, 13; 6:3; 2:4-11.
When goods increase, They increase who eat them; So what profit have the owners Except to see them with their eyes?
There is a severe evil which I have seen under the sun: Riches kept for their owner to his hurt.
If a man begets a hundred children and lives many years, so that the days of his years are many, but his soul is not satisfied with goodness, or indeed he has no burial, I say that a stillborn child is better than he—
I made my works great, I built myself houses, and planted myself vineyards.
I made myself gardens and orchards, and I planted all kinds of fruit trees in them.
I made myself water pools from which to water the growing trees of the grove.
I acquired male and female servants, and had servants born in my house. Yes, I had greater possessions of herds and flocks than all who were in Jerusalem before me.
I also gathered for myself silver and gold and the special treasures of kings and of the provinces. I acquired male and female singers, the delights of the sons of men, and musical instruments of all kinds.
So I became great and excelled more than all who were before me in Jerusalem. Also my wisdom remained with me.
Whatever my eyes desired I did not keep from them. I did not withhold my heart from any pleasure, For my heart rejoiced in all my labor; And this was my reward from all my labor.
Then I looked on all the works that my hands had done And on the labor in which I had toiled; And indeed all was vanity and grasping for the wind. There was no profit under the sun.
1 Tim 6:17-19;
Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy.
Let them do good, that they be rich in good works, ready to give, willing to share,
storing up for themselves a good foundation for the time to come, that they may lay hold on eternal life.
Matthew 6:19-21, 24
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal;
but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.
For where your treasure is, there your heart will be also.
But that’s not the only danger. The other danger is to fail to be wise with your money. Prov 21:20; 8:21. In other words, fools don’t do well with money, wise people know how to manage and create wealth. Luke 16:11
There is desirable treasure, And oil in the dwelling of the wise, But a foolish man squanders it.
That I may cause those who love me to inherit wealth, That I may fill their treasuries.
Therefore if you have not been faithful in the unrighteous mammon, who will commit to your trust the true riches?
Solomon does not here list the first principle of financial success - discipline in the area of finances. Prov 21:17.
He who loves pleasure will be a poor man; He who loves wine and oil will not be rich.
Most financial books and articles I’ve read - whether secular or Christian - mention about making a budget, yet I can’t find much in the Scriptures about that. Why is this?
I suggest that it’s simply because we have many more goods than ancient people did, and furthermore we have access to money in a much more stable way than they did. It’s not too difficult to avoid spending when you grow all your own food, make all your own clothes, and you live in the house your ancestors built. When they did need to spend, they didn’t have so many things, so it was easy to keep track of them. We have much greater wealth, and therefore many more things.
Solomon, of course, was himself fabulously wealthy, so he did have a lot to keep track of, but this would be considered just management - He ruled over his stuff, too. So how well do you rule over your stuff?
In any case, a budget is only useful if you keep it. There’s a lot of ways to make one - you can keep it on paper if that’s helpful for you; You could make a spreadsheet on a computer; I use a computer program that automatically records most of what I spend, thus giving me a detailed record of every purchase any time I want it with minimal effort on my part; I just need to correct the computer every now and again when it acts a bit too much like the machine it is and makes a weird entry. But it takes care of 90% of the effort and is way more detailed than I would ever bother with on my own.
The point of a budget is so that you choose where your money goes rather than wondering where it went. Prov 22:3 applies to more than money, but the “evil” can include financial disaster - if you know where your money is going, you’ll be able to anticipate going broke, and take steps to avoid it before it happens.
A prudent man foresees evil and hides himself, But the simple pass on and are punished.
II. Calculated Risk for the Long Haul
II. Calculated Risk for the Long Haul
Solomon’s first piece of financial advice is actually about investment. Obviously he can’t be talking about real bread, since real bread doesn’t do that. He’s talking about investment. To “Cast your bread” therefore, means to invest your money - you buy bread with money, so to invest means that investment isn’t available to use to buy bread, or whatever.
Thus, the first part of this investment advice would mean that you know how much you can afford to invest. You’ll not have access to these resources for some time, so before you do that, can you afford to do without the money? Jesus makes an illustration about being a disciple, but still, his illustration shows that you first need to count the cost Luke 14:28-29.
For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—
lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him,
The second part of this investment advice is to cast it “upon the waters.” an odd word picture to be sure. That’s probably intentional, for it will stick in your head that way. But Solomon did this rather literally - he had a fleet of ships built and send them away to Ophir (in Tarshish, which is all the way over in modern day Spain. 1 Kings 9:26-28; 10:22. These merchant ships took three years to make their long journey, but when they returned they brought enormous profit, for they brought back many luxury items that couldn’t be acquired in Israel or the surrounding countries.
King Solomon also built a fleet of ships at Ezion Geber, which is near Elath on the shore of the Red Sea, in the land of Edom.
Then Hiram sent his servants with the fleet, seamen who knew the sea, to work with the servants of Solomon.
And they went to Ophir, and acquired four hundred and twenty talents of gold from there, and brought it to King Solomon.
For the king had merchant ships at sea with the fleet of Hiram. Once every three years the merchant ships came bringing gold, silver, ivory, apes, and monkeys.
Observe that Solomon didn’t do all this himself, despite being the wisest man in the world. He was wise enough to know that Israelites didn’t know all that much about the sea, while the Phoenicians were expert seamen. Therefore, he went in with Hiram. Hiram’s help wouldn’t come cheap, but the knowledge was vital to the success. Israelites didn’t know how to build sea-going vessels, and once built they didn’t have the knowledge to navigate the Mediterranean.
In other words, part of financial wisdom is knowing the limits of your own knowledge, and not fooling yourself into believing that you know more than you actually do. When you don’t know how something works, find a good financial advisor who can give you good advice, and explain how it works. But also do your homework before starting anything.
Finally, notice that Solomon’s investment wasn’t in the stock market, mostly because the stock market wouldn’t be invented for another 2600 years. It was a business venture. Thus, Solomon’s advice isn’t just for traditional investments, but for business as well. That is, don’t start a business unless you know the industry. If you go into a business venture without understanding how to do business, and how that particular industry works, you’re going to lose your shirt.
The third part of this advice is that it will return to you after many days. Maybe. All investment carries the risk of losing your money. However, if you’ve been wise with your investments, you’ll probably get your money back given enough time. So if you’ve ever been tempted to try to get rich quick, Solomon has a simple recommendation - don’t. While people occasionally do stumble on instant success, most often getting rich takes time. lots of time. Did you know that the median age of the world’s billionaires is 67, and only 10% of them are under 50? (According to Data Firm Altra, CNBC article May 31, 2023) why is that? because getting rich, even when you’re superlatively good at it, usually takes a lot of time and patience. (Walton quote)
Finally, Solomon advises diversity. Give a portion to 7 or eight means “don’t put all your eggs in one basket.” Sailing was very risky in the ancient world. Your ship could hit a storm and sink; it could encounter pirates who would take everything. So don’t put all your resources into one ship, divide it up into several. That way, if one sinks, you’ll only lose a bit and the profit from the other ships will make up for the loss. Similarly today, whatever you invest in, diversity is something financial advisers both secular and Christian will tell you is wise. If you buy stock in a single company, then you’ll lose everything if the CEO of that company does something stupid - anyone want to become part owner of Oceangate, the company that lost the Titanic sub? I didn’t think so. Similarly, invest only in a single industry, and you’ll lose big if that industry goes down. Imagine owning real estate during the Great Recession of 2008. If you did own a home during that time, you lost a lot of money. But diversify and you’ll avoid losing everything, and your other investments will make up the difference. You’ll actually make less than if you got lucky and picked the one company that hit it big, but your investment will be more stable when (not if) things go wrong.
III. Risk is Necessary
III. Risk is Necessary
Solomon continues with two examples
If the clouds are full of rain, they empty themselves. Obviously. But is that good or bad? depends. Did you need the rain? then its good. Did the rain ruin your plans, or your crops? too bad. It rained anyway.
If a tree falls to the south or north, it will fall there. Obviously. But is that good or bad. Depends. Where was your house? Either it doesn’t matter much, if you’re lucky, or I guess you’re going to need a new house.
So the point of both examples is that you can’t predict when disaster will strike. You might escape this time; you might have disaster. In an uncertain world, bad things happen and you can’t prevent all of them.
The problem with this is that it’s easy to become paralyzed by fear. The one who watches the wind, in an era before meterology, can’t predict where it’s going to rain. and even today no one can predict when it’s going to rain in a month. So if you are always trying to avoid every disaster, and you’ll only act when everything is perfectly safe, well, you’ll forever accomplish nothing. He who tries to predict the unpredictable, and only moves when unpredictable disaster can’t harm you, will never actually do anything.
But if you never sow, you never reap. You always miss 100% of the shots you don’t take. And in the ancient world, most people were subsistence farmers, meaning, they didn’t sow crops to make a profit; they sowed crops so they could eat. So if you never take a risk, you’ll end up guaranteeing starvation.
Like anything there’s a balance - don’t be so confident you think nothing bad can happen, but don’t be so fearful of disaster that you don’t try.
Solomon is giving an example of the ultimate opportunity cost. Opportunity cost is when you lose out on something because you didn’t do it; or because you did something else instead.
Notice in this example, you don’t have the choice to diversify - most people only had one piece of property, and if you got a bad season, the entire crop was ruined. You’ve got no choice but to go all in. However, not sowing was even worse, so the risk was justified.
This principle of risk taking is much wider than finances. It’s a general principle for life. Living life requires taking some risks; and taking some risks means sometimes you’ll fail, or that bad things will happen. But you can’t live that way; don’t hide your head in the sand and pretend nothing bad can happen; but don’t avoid everything so you can be safe.
IV. Work hard enough to survive emergencies
IV. Work hard enough to survive emergencies
Solomon’s two illustrations of human ignorance of the future
You don’t know the way of the wind - of course meterology hadn’t been invented yet, so the only weather prediction possible was the rudimentary prediction from ordinary folks watching the sky - like saying it will storm today because it’s red in the morning. Even with modern science, however, we can only predict the weather with any degree of accuracy for about two weeks in the future.
you don’t know how the bones grow in the womb - ultrasound hadn’t been invented yet either. When Juliet was pregnant with James, the hospital had a fancy 3d ultrasound, so I saw James’ face before he was born. I did very much know how he was developing. But without that, the only clues you would get would be to feel the baby moving, and even then, you might guess “that’s a hand or a foot” but not be sure which.
But the point is that you can’t know the future - which business will succeed? you can stack the odds in your favor by being wise, but you can’t eliminate all danger. Even the best laid plans of mice and men are apt to go astray. So what should you do? you can’t avoid all danger, that only guarantees starvation.
The answer is to work hard - to sow morning and evening simply means to sow your seed all day. That is, don’t stop when you’ve got enough for a reasonable harvest. What happens if you lose half the crop? Instead, sow extra, so that when harvest comes, if you end up losing some of it, it’s no big deal.
In other words, this is the equivalent of an emergency fund when you deal with grain instead of money - you sow more than you will probably need and save some so that you can weather an unpredictable harvest.
Note that you can go too far the other way - Luke 12:16-21. The problem with the rich fool, is that he had saved up way more than he needed to just weather hardship; he saved up enough that he didn’t have to work at all for many years. So rather than use his money or his time to give to others, he choose to spend it all on himself. The point is, have an emergency fund, but if your “emergency fund” gets big enough that you don’t need to work - before retirement obviously - then a godly person either chooses to retire and use his free time to volunteer, or chooses to give what he doesn’t need away.
Then He spoke a parable to them, saying: “The ground of a certain rich man yielded plentifully.
And he thought within himself, saying, ‘What shall I do, since I have no room to store my crops?’
So he said, ‘I will do this: I will pull down my barns and build greater, and there I will store all my crops and my goods.
And I will say to my soul, “Soul, you have many goods laid up for many years; take your ease; eat, drink, and be merry.” ’
But God said to him, ‘Fool! This night your soul will be required of you; then whose will those things be which you have provided?’
“So is he who lays up treasure for himself, and is not rich toward God.”