Christmas is the time we celebrate the birth of Jesus. Whether you are a Christian or not, following the concepts taught in the Bible will have a profound effect on your life. The first four books of the New Testament are called the gospels. These books record the life, death, and resurrection of Jesus, with many quotes from Jesus himself. Those who simply follow His wisdom will likely achieve prosperity.
My wife and I lead a Bible study on money management from Crown Financial Ministries for ten years. The financial principles and wisdom taught in this course laid the groundwork for developing my Total Financial Makeover coaching program for high income professionals. Great financial principles stand the test of time. These biblical principles were presented 2,000 years ago and are still valid today.
For Christmas this year, I want to share with you Jesus’ teachings on the principle of sowing and reaping, along with two other financial concepts. Sowing and reaping is the basis of passive income. Warren Buffett summed it up like this, “If you don’t find a way to make money while you sleep, you will work until you die.”
Passive income is the backbone of living a prosperous life. We all need a source of income that is not dependent on our labor. There will come a time when we can no longer labor for money, or we wish to stop working. When that time comes, we will either rely on our passive income, or on someone who is willing to take care of us financially. Will your passive income be enough when you need it? Let’s look at what Jesus said about it 2,000 years ago.
Sowing a seed for the future
“A man scatters seed on the ground. Night and day, whether he sleeps or gets up, the seed sprouts and grows, though he does not know how. All by itself the soil produces grain – first the stalk, then the head, then the full kernel in the head. As soon as the grain is ripe, he puts the sickle to it, because the harvest has come.” – Luke 4:26-29
“(The seed) came up, grew and produced a crop, multiplying thirty, sixty, or even a hundred times.” — Mark 4:8
“…you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.” — Mattew 25: 27
Seeds need to be planted to grow. First, we must put in some effort to get the passive return started, then we can sit back and reap the reward in the future. Imagine a farmer who only wanted to harvest, but never put any effort into planting. He won’t have a very prosperous farm.
The act of planting a seed is done expressly for the purpose of producing more of what we planted. Once we set this in motion, we do not need to put forth anymore effort, the seed will grow on its own in our field for us to harvest later. We are literally making profit while we sleep, whether the seed is later sold for money or used to feed our family, the effect is the same.
This is the exact description of investing for the future. If one buys a certificate of deposit (CD) from a bank, no further effort need be made. At a particular date in the future the CD will produce more money than what was deposited.
Planting a single kernel of wheat in the spring will likely produce 100 kernels of wheat in the fall. It is possible, and desirable for our seeds to make more seeds while we sleep, or our money to make more money while we sleep.
There are so many ways we can apply this principle to our lives. Passive income always starts with taking action on our part. Then we let the market (or the soil) do its thing, and we reap the rewards. This includes depositing money into our 401(k), putting away money for our kids’ college in a 529 account, buying investment property, buying stocks and bonds, or anything else that we can invest in that is expected to increase in value over time without any effort from us.
Making a budget
“Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, ‘This fellow began to build and was not able to finish.’ “– Luke 14: 28-30
Many people make excuses for why they don’t use a budget. The medical student says she doesn’t have enough money to need a budget. The resident says he doesn’t have enough time to make a budget. The attending says she has so much income that she doesn’t need to make a budget.
The fact of the matter is that no matter what your situation, you will benefit greatly from planning how you will spend your money (Budgeting). Spending without a plan is why so many people who make good money are drowning in debt. When something comes up that they want to do or purchase, but they didn’t plan to have the money saved in advance, they borrow money and buy it anyway. If they rinse and repeat enough times, they will find themselves in trouble, struggling to make their debt payments.
This situation can almost always be avoided with a little planning.
Avoid letting ‘stuff’ rule your life
“Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abondance of his possessions.” — Luke 12:15
Finally, have an end point in mind. Why are you setting up passive income? Is it so you can quit your job? Is it to help your children graduate from college without student loans? Is it to take care of your expenses when you no longer work for a living?
Whatever the reason, don’t let greed take over. Once you have reached your endpoint, you can stop putting away more for the future. Now you can be generous with others in the present.
Those of you who have read my real estate book have heard the full story of why I stopped buying more investment real estate. We had enough to take care of our income needs for the rest of our life. If we didn’t need any more set aside, we didn’t need to put out the effort to plant more seeds. All passive income sources need to be ‘planted.’ There is no point in putting out effort for anything we don’t need. I now have more time to help doctors better their finances.
If we all follow just these three principles that Jesus taught, our financial future will likely be secure.
1) Plant things that will produce passive income.
2) Set a budget that includes our goals.
3) Don’t get greedy thinking stuff will make us happier.
Additional wise financial advice can be found throughout the 66 books of the Bible. Ecclesiastes and Proverbs are especially good books to find financial insight and wisdom, which contain much of the wisdom of King Solomon. You can fine find more than 2,350 verses about money and possessions scattered throughout the Bible. These pieces of wisdom have certainly stood the test of time.
I hope you apply these three small tasks to make 2024 an even better financial year than 2023. If you need help getting your budget right, then seek help. If you have no one in your circle, contact me and I can be your guide.
Have a very Merry Christmas