Financial Wisdom from the Wisest Man Who Ever Lived (Part 5)

Today, we are going to look at PART 5 in our new feature about the wisdom of Solomon with you regarding good money management. 

Over the coming weeks, we are going to look at several of the wealth management principles he shared. If you apply these money management principles, you be successful. 

King Solomon had an encounter with God. We are told, “At Gibeon, the Lord appeared to Solomon during the night in a dream, and God said, “Ask for whatever you want me to give you.” (1 Kings 3:5)

But do you know what Solomon asked for?

He could have asked for anything, yet he asked God, “Give me an understanding heart so that I can govern your people well and know the difference between right and wrong.” (1 Kings 3:9)

We are told that “The Lord was pleased that Solomon had asked for wisdom.” (1 Kings 3:10)

And God told Solomon, “Because you have asked for wisdom in governing my people with justice and have not asked for a long life or wealth or the death of your enemies— I will give you what you asked for! I will give you a wise and understanding heart such as no one else has had or ever will have! And I will also give you what you did not ask for—riches and fame! No other king in all the world will be compared to you for the rest of your life! And if you follow me and obey my decrees and my commands as your father, David, did, I will give you a long life.” (1 Kings 3:11-14)

God gave Solomon great wisdom and an understanding heart. God said that Solomon’s wisdom would be greater than anyone else who will ever live. Thank God that Solomon wrote down his wisdom! God gave Solomon incredible insight to not only lead his people but also perspective on how to live a good, long life, and gave him secret insights into wealth and success. 

The wisdom that God blessed Solomon with ensured that his people lived in peace, prosperity, and security. 

How do I know this? 

Well, we are told, “The people of Judah and Israel were as numerous as the sand on the seashore. They were very contented, with plenty to eat and drink.” (1 Kings 4:20)

And again, “During the lifetime of Solomon, all of Judah and Israel lived in peace and safety. And from Dan in the north to Beersheba in the south, each family had its own home and land.” (1 Kings 4:25)

Solomon’s wisdom brought “peace and security” and “each family had their own home and a land” where they could live, raise their families, and where they could provide for their loved ones.

When you look at the status of our world, we sure can do with the wisdom of Solomon. 

I am so grateful that God got Solomon to write down his wisdom and include this in the Bible so that we can apply it to our lives. 

In PART 1, we looked at what King Solomon said about the importance of having… 

• A DREAM
• A VISION
• A PLAN
• That you can TRUST GOD to help you

In PART 2, we looked at three powerful principles…

• Being GENEROUS
• Getting your PRIORITIES in the right order 
• The importance of MAKING GOOD DECISIONS

In PART 3, we looked at the… 

• The dangers of being GREEDY and LAZY, and how this can lead to poverty and ruin.
• The importance of being HONEST and having a good WORK ETHIC, and how these traits lead to profit and success.

In PART 4, we looked at the…

• Importance of SAVING for your future
• That we should only SPEND what is left over after saving
• We looked at the lesson from the ANTS and saw how we should store part of our money away by BUILDING UP YOUR SAVINGS for emergencies and opportunities that may arise from time to time.

Today in PART 5, we are looking at what King Solomon had to say about INVESTING part of your money in order to build wealth over the long-term.

1. Build Up a Wealth Portfolio 

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

You can build up our wealth portfolio. King Solomon suggests that you do so slowly, methodically, little by little, one step at a time. 

According to King Solomon, you don’t need a lot of money to make money. The secret is to take a little each month and regularly add it to your investments. Over time, with the power of compounding, you can build a serious wealth portfolio. 

Albert Einstein called compound interest the 8th WONDER OF THE WORLD. 

He said, “He who understands it, earns it. He who doesn’t, pays it.”

Many think that Albert Einstein came up with this theory, but King Solomon clearly understood the principle, and suggested that when you gather money over the long term, you can grow your wealth portfolio. 

Compounding occurs when you invest money and allow it to reinvest itself continuously.

Compounding is the effect of earning interest not only on the money you originally invested but also interest on the interest that your investment has already earned. With this strategy, you will have the potential to generate explosive growth beyond your wildest imagination.

It is important to build up your growth investments so that you will have a wealth portfolio available to fund your retirement and future dreams. 

Invest regularly, over the long term, and don’t draw the funds. Allow your money to grow. 

If you ever want to attain financial freedom, you need to invest in growth assets over the longer term. Over time, you can benefit from compound growth, where you can exponentially multiply your investments by allowing interest and growth to be reinvested, where you receive interest in interest and growth on growth. 

Please note that there is a difference between saving (which we looked at in part 4) and investing…

Savings refers to money that is set aside in easy-to-access cash and bank savings accounts for when emergencies and opportunities arise. Investments usually consist of local and offshore money set aside in a combination of shares, bonds, property, or managed funds that aim to generate real long-term growth.

Investments can be more volatile over the short term, but they have the ability to generate higher growth over time. This, coupled with the power of compounding, can lead to explosive growth over the long term. 

King Solomon implies that investing should be a slow, steady approach, where you build your wealth portfolio little by little over the long term. 

2. Diversify Your Investment Portfolio 

“Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.” (Ecclesiastes 11:1-2) 

Diversification is an important wealth-building strategy that reduces risk.

If all your investments are in one investment and that investment fails, you can be left in serious trouble. It is, therefore, vital to spread your investments across various assets. 

Invest part offshore and part locally. Include cash, bonds, equities, and property. Invest across various companies. You can also spread money between short-term, medium-term, and longer-term investments to take care of various objectives at different time intervals over your life span. 

King Solomon told us not to keep all our eggs in one basket but to diversify our investments. How are you doing this?

3. Stay Away From Get-Rich-Quick Schemes

“Greedy people try to get rich quick but don’t realize they’re headed for poverty. (Proverbs 28:22)

“Dishonest money dwindles away.” (Proverbs 13:11a)

If an investment opportunity is too good to be true, it usually is. Make sure you only invest in reputable investment options. 

So many trying to get rich quickly have pierced themselves with much grief. 

Work hard, methodically. Make use of tried and trusted investments that have a proven track record.

4. Get Advice

“Get wisdom; develop good judgment.” (Proverbs 4:5) 

“Plans go wrong for lack of advice; many advisers bring success.” (Proverbs 15:22)

Advice from experts can help you structure your investments and money management to help you meet your needs and accomplish your goals. 

Sometimes, it is also good to get a second opinion if things are not working out. It may cost you some money, but it can also help you set up the right strategies to help you build towards financial freedom. 

Have you sought advice on your financial planning and investment strategies?

5. Build Generational Wealth

“A good man leaves an inheritance to his children’s children.” (Proverbs 13:22)

King Solomon encouraged us to build wealth, not only for our old age but also to leave an inheritance to the next generation. 

You can build a wealth portfolio and a legacy that can be passed down to your future generations.

By having a long-term outlook, you can put your future family generations on the right road to a fruitful future by passing these principles on and by investing wisely, not just to look after your affairs during your lifetime but also to pay it forward, leaving a legacy for your future generations. 

Do you have a plan that is beyond taking care of just your current needs? 

Consider reviewing your Will and your investment portfolio, and structure your portfolio to not only take care of your life now but also to leave an inheritance to your children and your children’s children. 

Today, we have looked at 5 INVESTING principles that you can apply to your money management that come from the wisest man who has ever lived…

1. Build up your WEALTH PORTFOLIO, LITTLE BY LITTLE, over the LONG-TERM.
2. Don’t keep all your EGGS IN ONE BASKET. DIVERSIFICATION helps to reduce risk and helps you formulate a balanced approach to wealth creation.
3. Stay away from GET RICH QUICK SCHEMES. Many have lost money by investing in scams. Invest in reputable investment options.
4. GET ADVICE. This can add great value and help you construct a long-term investment strategy that meets your needs and objectives.
5. BUILD GENERATIONAL WEALTH to set up your future generations to be fruitful and to flourish. 

If you apply this wisdom to investing, you will build up a solid wealth portfolio that will take care of your golden years, and you will also end up leaving a legacy for your future family generations.