King Solomon’s wisdom on money matters speaks through the ages to modern day investors using Biblical guidelines for making financial decisions. With observations on managing wealth wisely, making prudent choices and even diversifying investments, the great King’s sayings recorded in the books of Ecclesiastes and Proverbs can be interpreted in the context of the current investing climate. Here are five of the monarch’s most relevant recommendations for today’s investing success:
In Ecclesiastes 11:2, the King says, “Give portions to seven, yes, to eight or you do not know what disaster may come upon the land.” Diversifying assets over several markets offers some protection against what disasters may come, either upon the land, or upon the property itself. Because markets are different, investing in as many as possible provides a hedge against natural disasters, economic downturn and even unexpected problems with individual properties.
Assess Your Investment Abilities Honestly
“I have seen a grievous evil under the sun,” says Solomon in Ecclesiastes 5:13-14. “Wealth hoarded to the harm of its owner, or wealth lost to some misfortune.” Both overestimating and underestimating resources, or taking risks with expensive consequences in an effort to get rich quick can ruin a new investor’s career. It’s important to examine your assets, experienced and ability to take risks before launching new investment.
Plan Prudently and Avoid Hasty Decisions
Prudence is the watchword for much of the King’s money management advice. “The plans of the diligent lead to profit as surely as haste leads to poverty,” he tells us in Proverbs 21:5. Slow steady growth creates long-term wealth – a key reason for the desirability of income property as a wealth-building investment strategy. Hasty decisions, or investments promising a quick, high yield, can in fact lead to poverty – or at least the loss of significant investing funds.
Seek the Advice of Trusted Experts
Solomon speaks frequently of wisdom, and the need to remain humble and to seek instruction from wiser counselors in order to prosper: “Hear counsel, and receive instruction, that thou mayst be wise in thy latter end.” (Proverbs 19:20) Successful investors work with experts in the field, try to learn all they can, and heed the advice of those with more experience.
Apply Wisdom and Prudence in Investing Decisions
“By wisdom the house shall be built,” says the King in Proverbs 24:3. “And by prudence it shall be strengthened.” In many of Solomon’s sayings, a house represents stability and prosperity, and his advice to approach all aspects of investing with wisdom – learning and seeing advice – and prudence – weighing choices and avoiding hasty actions – leads to those same outcomes in the investing process. Avoiding the temptation of quick money schemes and planning for the long term are age-old strategies with special relevance today.
King Solomon’s ancient advice to investors echoes Jason Hartman’s own 10 Commandments for investors — recommendations for success in today’s markets that stress wisdom, prudence, humility – and diversification – as keys to building long term investment wealth.
The Solomon Success Team