Because King Solomon’s greatest desire was wisdom to rule his people well, God granted him abundant wealth also. Solomon was well-acquainted with the ins and outs of achieving and maintaining riches. He writes about them often in his treasure trove of wisdom for life. He also provides insights into the causes of poverty, and supplies advice on how to avoid it.
In Proverbs 21:5, Solomon shares one of the primary causes of poverty: making rash decisions. “The plans of the diligent lead to profit as surely as haste leads to poverty.” Another way to say it: haste makes waste.
Banking on Haste Makes Waste
Most people do not make financial decisions based on facts. Instead, people are moved through the decision-making process by emotions. Marketer’s know this. They bank on it.
Marketing experts create an urgency for consumers to act in haste. They understand that people feel like they are going to miss out if they don’t act fast. Wisdom warns against this type of decision making, informing us that it leads to poverty.
As wise consumers and investors, it is our responsibility to make sound decisions based first on real data. Unfortunately, we often reverse this process and let our feelings take the driver’s seat, seeking data that supports our emotions. Instead, we should force the data to drive our decisions and allow our “gut” to confirm the transactions.
King Solomon provides the solution to avoid making rash decisions that can lead to financial ruin: “The plans of the diligent lead to profit.” In other words, we must do our financial due diligence.
What Is Financial Due Diligence?
When making a financial decision, it is vital to do the necessary homework to be sure the course of action is wise and profitable.
Due diligence is the investigation of a potential investment or product to verify that its presented selling points are factual. It can include reviewing financial records, customer reviews, consumer reports, and any claims or promises the company makes or has made.
Financial due diligence takes time. It is not possible to be both hasty and diligent in the decision-making process. The careful investor wants to be among those who make a profit: the diligent.
In a busy world, it can be hard to verify all data points before making a financial decision. Some facts can be obscure or hard to find. Others may take years to learn. In these cases, Solomon instructs us to seek advice from others.
“With many advisors,” Solomon instructs, “plans will succeed.” Of course, these counselors must be knowledgeable in the area they’re being asked to advise about.
Listening to the advice of trusted and knowledgeable counselors is one way to fulfill financial due diligence. This counsel can save valuable time without resorting to hastiness. When it comes to investing, good advisors will have book knowledge and practical experience that can guide you in your decision-making process. They have already practiced the financial due diligence necessary to achieve success.
As an investor, you do not have to reinvent the wheel with each new investment opportunity. Seek out advisors who know how to make sound financial decisions and have a proven track record.
An Investor to Follow
Jason Hartman has been teaching the sound principles of investing for many years. He has a proven track record of conservative investing in the real estate market. Moreover, he has put that experience to work for him with Empowered Investor Network where he presents rentals that are turnkey cash flow properties.
Hartman has put to practice Proverbs 21:5 and done his financial due diligence. In the process, he has discovered a simple formula for finding and offering cash flow properties for sale. His properties focus on geographical areas in proven real estate markets that can convert rental properties into income-producing, equity-gaining, multi-faceted investment diamonds.
Not only does he offer cash flow properties for sale, but he also invests in them himself, owning income property in 17 cities across 11 states.
Plus, Hartman provides a plethora of free investing advice on his weekly podcasts and offers investment training courses that teach the same techniques that helped him achieve the American Dream of financial freedom.