What Does God Have To Say About Saving And Investing?

Many throughout the world are getting deeper into debt. The average person is also saving less than ever before. To make matters worse, even the trickle that goes into saving is usually spent on short term needs. The lack of saving and investing will have a negative impact on the financial future of many.

It is against this backdrop that I want to encourage you to build up your SAVINGS & INVESTMENTS.

I also want to take a look at WHAT GOD HAS TO SAY ABOUT SAVING & INVESTING IN A DIVERSIFIED PORTFOLIO

I would like to stress the importance of creating diversity in one’s saving and investment portfolio.

Many investors don’t understand that saving money and investing money are not the same thing. In fact, savings and investments play different roles in your financial strategy. It is therefore vital that you understand the difference.

What is SAVING?

Saving money is the process of putting cash aside and parking it in a safe and accessible low risk portfolio. Your cash reserves must be available to fund your emergencies and short term needs.

What is INVESTING?

Investing money is the process of building up investments that have the ability of generating growth over time. These funds do not have to be instantly accessible and should be invested over the long term.

Investment funds usually consist of a selection of assets that may include equities, property, bonds and cash, with a potential spread between local and global assets. While funds set aside for your long term investing may fluctuate in value due to market volatility over the short term, these funds should be able to generate real growth over the long-term.

Investing includes building up your wealth portfolio to fund your retirement and specific long term goals and objectives.

Today I want to encourage you to BUILD UP YOUR SAVINGS & INVESTMENTS

• You need to build up your Savings Reserves for short term goals and unforeseen emergencies.
• You also need to build up your Financial Freedom Wealth Investment Portfolio over the long-term to fund your future goals and dreams.

Proverbs 21:20 “The wise man saves for the future but the foolish man spends whatever he gets.”

Proverbs 13:11 “Whoever gathers money little by little makes it grow.”

I also want to encourage you to build up a diversified portfolio of Savings and Investments.

DIVERSIFICATION is an important WEALTH BUILDING STRATEGY. A diversified investment portfolio can help you grow your capital over time while reducing risk.

What is DIVERSIFICATION?

Diversification refers to the spreading of your portfolio over many investments in order to avoid excessive exposure to any one source of risk.

You may have heard the saying: “Do not keep all your eggs in one basket!” This is so true.

If all your eggs are in one basket and something goes wrong, you might end up in trouble. (with scrambled eggs!)

It therefore makes sense to spread your investments.

“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:2)

You need a diverse spread within your Savings & Investment portfolio. You also need a plan!

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5)

SPREAD YOUR INVESTMENTS

You can diversify your investment portfolio in many ways. Let us look at a few examples…

You can diversify your investments between LOCAL & GLOBAL investments:

• You can invest both locally and offshore. Due to the advancements in technology the world has become a global village.
• It therefore makes sense that you create a hedge by diversifying some of your investments into global funds. By having some of your assets invested offshore, you are creating diversity in your investment portfolio.

You can diversify your investments across ASSET CLASSES:

• Another important area to create diversity is to create a mix between different asset classes.
• There are 4 main asset classes: Cash, Bonds, Equity’s (Stocks), and Property.

Different asset classes tend to behave differently under different market conditions. By mixing asset classes, you can reduce volatility. It is like having an insurance against the changes in economic and market conditions.

We have released a blog post on an investment strategy for all seasons, which can help you if you are looking to dive deeper into investing.

It is therefore vital to diversify and have some balance within your investment portfolio to help create more consistency. (If one asset class falls, the other picks up).

You can diversify your investments over TIME CYCLES:

If you are investing over the short term, you should invest in a selection of cash and bond type structures, while over the longer term you can have more exposure to a diverse basket of equities and property investments.  

Over the short term, cash and bond investments usually generate greater consistency, while over the longer term, equity and property investments have historically best outperformed inflation, but these asset classes are more volatile over the short term.

You can diversify your investments over different investment VEHICLES:

You can consider a diverse selection of investment vehicles consisting of…

• Bank Savings Deposits,
• Flexible Mutual Funds or Unit Trust Investment Options,
• Retirement Options,
• Share Portfolio, and
• Property Portfolios.

You can diversify your investments with a selection of ACTIVE & PASSIVE FUNDS:

Passive Funds usually track an index and are therefore fairly cheap to administer, while Active Managed Funds are managed by Asset Managers. While Asset Management fees are higher than passive investment strategies, Active Managers usually generate better returns over the long term due to the active management.

Active and Passive Managed Funds can consist of Unit Trust Funds & Exchange Traded Funds ranging from…

• Low risk Money Market Funds (ideal for investments over 3 months+)
• Low risk Income Funds (ideal for investments over 1 year)
• Low to moderate risk Cautious Stable Funds (ideal for investments over 3 years)
• Moderate risk Absolute Funds (ideal for investments over 4 years)
• Moderate risk Balanced Funds (ideal for investments over 5 years)
• Higher risk Equity, Property and Specialized Fund (ideal over 7 years+)

You can diversify your investments over various ASSET MANAGERS:

You can spread your investments between a number of top asset management and investment companies.

I would suggest that you make use of companies with a good reputation and a proven track record.   

Note:

If you are looking to build up a Wealth Portfolio, it is advisable to get advice on how best to structure your savings and investments. Why not sit down with an Investment Advisor who can help you construct a diversified investment portfolio that is affordable and manageable, that can assist you in reaching your unique goals and objectives, and thereby helping to put you on the road towards financial freedom.

IN SUMMARY:

• BUILD UP YOUR SAVINGS FOR YOUR SHORT TERM EMERGENCIES AND NEEDS.
• BUILD UP YOUR INVESTMENT PORTFOLIO TO HELP YOU ACHIEVE YOUR RETIREMENT GOALS AND LONG TERM DREAMS.
• MAKE SURE THAT YOU BUILD UP A GOOD DIVERSIED SPREAD BY MAKING USE OF VARIOUS INVESTMENT STRATEGIES

It is important to set aside SAVINGS to ensure that you have reserves set aside for your contingency needs.

It is also vital that you build up your INVESTMENTS over time to ensure that you can achieve your financial freedom over the long term.

DIVERSIFICATION is also an important wealth building protection strategy to help you reduce risk and volatility within your investment portfolio. Don’t put all your eggs in one basket. Rather spread your risk and maximise your returns.

“Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:2)

“The prudent see danger and take refuge, but the simple keep going and pay the penalty.” (Proverbs 27:12)

Consider spreading your funds between…

• local and global assets (across various geographical regions),  
• within different asset classes,
• over different time frames,
• within a combination of managed fund options,
• within different investment vehicles,
• with your investment spread in line with your needs and objectives, so that you can achieve your goals

“The wise are cautious and avoid danger; fools plunge ahead with reckless confidence.” (Proverbs 14:16)

I would encourage you to start building up your SAVINGS & INVESTMENTS. Make sure that you make use of a DIVERSIFIED STRATEGY to reduce risk and help ensure that your build wealth over time.  

Before you stop reading, I want to ask you a question. Have you accepted Jesus as your Lord and Savior? If you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.

God bless you.

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