As a member of the baby boom generation, I remember feeling incredible pressure as a youngster in the 1960s. There were so many of us to compete with. Unlike now, there was more job searching than vacancies.
I thought I had to rush to college and graduate school and take care of it! Few people took time off, either to meet up or simply to gain experience. Notable author Dave Ramsey was one of those who worked hard during his college days and beyond, building a real estate portfolio worth over $ 4 million by the age of 26. The rest of his life was spent teaching biblical financial principles based on his bankruptcy in 1988 two years later.
What are some of these principles? Proverbs 13:11 (Standard English version) says: “The wealth gained in haste will decrease, but he who gathers little by little will increase it. Ecclesiastes 11: 2 advises: “Give a share to seven, or even to eight, for you do not know what calamity may befall the earth. Another truth that I have personally learned the hard way is, “The rich rule over the poor, and the borrower is the slave of the lender” – Proverbs 22: 7. 1 Timothy 6: 9 warns those who desire to be rich.
These principles should make a difference in the way we work, save and invest. Is it wrong to get rich? No. The main questions that make the difference relate to the how, the why and the consequences of wealth. Right now, it’s easy to see the meteoric rise in the stock prices of some tech giants and start to believe that the trend will last forever. It won’t be.
While the S&P 500 is dominated by these few and has therefore performed astoundingly, many small businesses, global companies and other investments have provided poor or even poor results to investors in recent years. Therefore, if good diversification is practiced, it has generally not enjoyed the highest possible monetary growth.
As more and more people get on the train, the trend will be closer to an end. This usually happens after a surge in indices. More and more people are starting to borrow money on margin to invest.
In 1986, Congress passed a revised property tax law that was supposed to generate a few billion in revenue for the federal government. Instead, the result has been the destruction of the savings and loan industry, bankruptcies like Dave Ramsey’s, and people like you and me who paid over $ 500 billion in federal spending for make all this mess go away.
The key to long-term success with your finances is learning to be content with what you have, to be careful about the financial commitments and investments you make, and to do it for the long term. Either way, don’t try to get rich quick. There are all kinds of reasons why investments fail or your plans fail. The turtle always wins the race with the hare at the end. We just don’t know when or why in the end. Now, in my late 60s, I know that all good things develop right on time.
Ron Finke is President of Stewardship Capital in Independence. He is a registered investment advisor. Contact him at [email protected]