Whether you believe The Bible to be The Word of God, an inspired volume, or just an old book which has stood the test of time and influenced billions, I think it is worth knowing what it says about money. I know. I know. You’re not supposed to talk in polite company about politics, religion, sex, or money, but here on this blog, we’ve pretty much hit all of those subjects at some point so let’s do it again today! If you find it offensive to refer to religion in any way, go read something else on the internet and come back tomorrow for some pure secular knowledge.
Seven Financial Principles from The Bible
I don’t claim to be a biblical scholar by any means, but I am confident that I know more about the book than the vast majority of my readers, having read it cover to cover multiple times during my lifetime. In my opinion, there are seven important financial principles that can be found within the books. I’ll use the King James version to illustrate, mostly because it is the version I’m most familiar with, but also because I’m a sucker for Old English.
# 1 The Bible Teaches That Money is a Tool, Not a Goal
Both the Old and New Testament are very clear that acquiring money, wealth, riches etc should not be your goal. Let’s cite a few examples.
Exodus 20:17 Thou shalt not covet thy neighbour’s house, thou shalt not covet thy neighbour’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour’s.
Ecclesiastes 5:10 Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.
Matthew 6: 19-21 Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal…For where your treasure is, there will your heart be also.
Luke 18: 18-27 And a certain ruler asked him, saying, Good Master, what shall I do to inherit eternal life?…Jesus said unto him, Yet lackest thou one thing: sell all that thou hast, and distribute unto the poor, and thou shalt have treasure in heaven: and come, follow me. And when he heard this, he was very sorrowful: for he was very rich. And when Jesus saw that he was very sorrowful, he said, How hardly shall they that have riches enter into the kingdom of God! For it is easier for a camel to go through a needle’s eye, than for a rich man to enter into the kingdom of God. And they that heard it said, Who then can be saved? And he said, The things which are impossible with men are possible with God.
Timothy 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith
Hebrews 13:5 Let your conversation be without covetousness; and be content with such things as ye have.
I think the message is clear. If you wish to have a balanced, happy, successful life, money has a higher purpose than just sitting there to be counted and swam in a la Scrooge McDuck.
# 2 Work Is a Meaningful Part of Life
The Protestant work ethic transported to America certainly has its roots in the Bible. While “idle hands are the devil’s workshop” is not contained in scripture, it is pretty clear that work is considered an important financial principle.
Genesis 3:17-19 Cursed is the ground for thy sake; in sorrow shalt thou eat of it all the days of thy life; Thorns also and thistles shall it bring forth to thee; and thou shalt eat the herb of the field; In the sweat of thy face shalt thou eat bread
Exodus 20:9 Six days shalt thou labour, and do all thy work
Proverbs 13: 11 Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase.
1 Thessalonians 4:10-12 We beseech you… that ye increase more and more..And that ye study…and…do your own business…and…work with your own hands…That ye may walk honestly toward them that are without, and that ye may have lack of nothing.
2 Thessalonians 3:10 If any would not work, neither should he eat.
1 Timothy 5:8 If any provide not for his own, and specially for those of his own house, he hath denied the faith, and is worse than an infidel.
It is clear that the divine intent was for humans to work. Without work, leisure loses its pleasure. Work keeps bodies toned, minds sharp, and spirits strong. Whether you have to work for money or can choose your work without consideration of the financial ramifications, working toward a goal or a purpose is a meaningful part of life. I’ve been training my kids for their entire lives to know the answer to this question:
“Where does money come from?”
“It comes from work, dad.”
# 3 Have a Written Financial Plan (Budget)
Just one verse in this section, but it’s an important one.
Luke 14:28 For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?
We could start that one out “for which of you, intending to buy a Tesla” or “intending to renovate a house” or “intending to send your child to college” or “intending to retire.” Budget. Have a written financial plan.
# 4 Avoid Debt
References to debt and its evils are plentiful throughout The Bible. I am only pulling out some of the classics.
Deuteronomy 23:20 Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury
Psalms 27:31 The wicked borroweth, and payeth not again
Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.
Ecclesiastes 5:5 Better is it that thou shouldest not vow, than that thou shouldest vow and not pay.
Matthew 5:42 Give to him that asketh thee, and from him that would borrow of thee turn not thou away.
Matthew 6:12 Forgive us our debts, as we forgive our debtors.
Romans 13:8 Owe no man any thing
The Bible is hardly the only spiritual book out there with stern warnings about debt. The Koran says:
Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, “Trade is [just] like interest.” But Allah has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah. But whoever returns to [dealing in interest or usury] – those are the companions of the Fire; they will abide eternally therein.
Over the years, I have had dozens of Muslim doctors write me for advice about how to pay for school, buy a house, and invest without violating this commandment.
The Talmud says
“Paying a creditor is a mitzvah [commandment].”
In traditional Japan (Shinto) the most important holiday was the New Year, and the goal was to start the New Year without any debts. In Hinduism, Yudhishtra replied in response to Yaksha that
“man without debt is truly happy”
The Book of Mormon says:
“…whosoever among you borroweth of his neighbor should return the thing that he borroweth, according as he doth agree, or else thou shalt commit sin; and perhaps thou shalt cause thy neighbor to commit sin also.”
and additional scripture from the religion says:
“Pay the debt…Release thyself from bondage”.
What is the big deal about a little debt? Well, part of it is historical. Bankruptcy laws that protect debtors are a relatively new, Western invention. Debtor’s prison was still a thing well into the mid 19th Century, even in the United States. In Ancient Greece, not only you, but your spouse and children became debt slaves until you could physically work off the debt. There was a death sentence among the Mongols if you went bankrupt three times. The Jewish people were actually rather progressive on this matter — all debts to fellow Jews were forgiven every 7th year and every 50th year, debts to Jew and Gentile alike were forgiven. (I wonder what interest rates were in year 49.)
So is the issue with debt just historical artifact? Certainly, there are two issues that make debt less of a big deal now than it used to be.
First, the consequences are much lower if you blow it thanks to bankruptcy laws. These days in many states you can declare bankruptcy and still keep your house and retirement funds. In Texas, you can also keep two guns, 12 head of cattle, and 120 chickens.
Second, interest rates are now generally much lower. The Code of Hammurabi dictated a 20% interest rate and those were still the interest rates well into Medieval times in Europe. At 20%, your debt doubles every 3 1/2 years. Even in the 1700s in England, rates were 10%. It hasn’t even been that long since the US had double-digit interest rates. I’m sure my parents took out a double-digit mortgage in 1979 when they bought the house I grew up in. US Mortgage rates peaked in 1982 at 16%. Shoot, my first mortgage in 1999 was 8%. It is pretty easy for debt to get out of control quickly at interest rates like those.
While debt can be a tool and borrowing at 2% while earning at 10% is obviously a mathematically winning formula, consider the words of J. Reuben Clark, a religious leader during and after the Great Depression:
Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels . . . it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands nor orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.
There’s a reason the major religions of the world warn about becoming overly comfortable with debt.
# 5 Save Money
There is a lot in The Bible about saving, but it is usually referring to a physical or spiritual salvation, not a financial one. However, if you look closely, you can find the recommendation to save there. Perhaps the best verses are found in Proverbs (actually sandwiching one of my favorite verses that I like to use if my wife is giving me a hard time about going on an adventure trip: “It is better to dwell in the wilderness, than with a contentious and an angry woman.” That one ranks right up there with the story of the she-bears and the kids in my book. )
Proverbs 21:17-20 He that loveth pleasure shall be a poor man: he that loveth wine and oil shall not be rich….There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spendeth it up.
The message? Don’t spend it all. Save some money for a rainy day. Another great story on saving comes from Joseph who was sold into Egypt:
Let Pharaoh do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. And let them gather all the food of those good years that come, and lay up corn under the hand of Pharaoh, and let them keep food in the cities. And that food shall be for store to the land against the seven years of famine, which shall be in the land of Egypt; that the land perish not through the famine.
My favorite part of those verses is that Joseph used the exact same savings rate I recommend for you–20%. It turns out you can have a pretty high Safe Withdrawal Rate if you know your retirement is only going to last 7 years too.
# 6 Invest
What? You didn’t know The Bible talks about investing? I’m not talking about the Talmudic prescription for asset allocation:
“Let every man divide his money into three parts, and invest a third in land, a third in business and a third let him keep by him in reserve.”
I’m talking about this parable from Jesus Christ. It’s long, but worth the read:
Matthew 25:14-30 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. Then he that had received the five talents went and traded with the same, and made them other five talents. And likewise he that had received two, he also gained other two. But he that had received one went and digged in the earth, and hid his lord’s money. After a long time the lord of those servants cometh, and reckoneth with them. And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more. His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them. His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed: And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine. His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. Take therefore the talent from him, and give it unto him which hath ten talents. For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.
Clearly, the idea that “unto whomsoever much is given, of him shall be much required” predated Spider-man. The Bible even has something to say about getting good financial advice, once more in Proverbs:
Proverbs 12:15 The way of a fool is right in his own eyes: but he that hearkeneth unto counsel is wise.
I think Solomon was talking about Bitcoin and Beanie Babies here.
Proverbs 24:6 For by wise counsel thou shalt make thy war: and in multitude of counsellors there is safety.
There is something to be said for having your accountant watching your estate attorney, your estate attorney watching your financial planner, and your financial planner watching your investment manager.
# 7 Give
If you thought The Bible had a lot to say about debt, you haven’t seen anything. Charitable giving is a central principle of Christianity (“Faith, Hope, and Charity”) so no surprise that you can read about it in most books in The Bible. Here is a very curated selection:
Deuteronomy 15:11 For the poor shall never cease out of the land: therefore I command thee, saying, Thou shalt open thine hand wide unto thy brother, to thy poor, and to thy needy, in thy land.
Proverbs 21:13 Whoso stoppeth his ears at the cry of the poor, he also shall cry himself, but shall not be heard.
Proverbs 21:25-26 The desire of the slothful killeth him; for his hands refuse to labour. He coveteth greedily all the day long: but the righteous giveth and spareth not.
Malachi 3:10-11 Bring ye all the tithes into the storehouse and prove me now…if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it. And I will rebuke the devourer for your sakes, and he shall not destroy the fruits of your ground
Matthew 5:42 Give to him that asketh thee, and from him that would borrow of thee turn not thou away.
Matthew 6:1-3 Take heed that ye do not your alms before men, to be seen of them: otherwise ye have no reward of your Father which is in heaven. Therefore when thou doest thine alms, do not sound a trumpet before thee, as the hypocrites do in the synagogues and in the streets, that they may have glory of men. Verily I say unto you, They have their reward. But when thou doest alms, let not thy left hand know what thy right hand doeth.
Luke 3:11 He that hath two coats, let him impart to him that hath none; and he that hath meat, let him do likewise.
This is the same chapter where Jesus gives career advice to tax collectors (“Exact no more than that which is appointed you”) and soldiers (“Do violence to no man, neither accuse any falsely; and be content with your wages”).
Acts 20:35 Remember the words of the Lord Jesus, how he said, It is more blessed to give than to receive.
It’s called the Christmas spirit for a reason.
2 Corinthians 9:6-9 He which soweth sparingly shall reap also sparingly; and he which soweth bountifully shall reap also bountifully. Every man according as he purposeth in his heart, so let him give; not grudgingly, or of necessity: for God loveth a cheerful giver…ye, always having all sufficiency in all things, may abound to every good work…he hath given to the poor: his righteousness remaineth for ever.
1 Timothy 6:17-18 Charge them that are rich in this world, that they not trust in uncertain riches…That they do good, that they be rich in good works, ready to distribute
Finally, I’ll conclude with my favorite verse of religious financial advice, although this one isn’t from The Bible:
But before ye seek for riches, seek ye for the kingdom of God. And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good—to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted.
We use that as a guideline for our annual charitable giving.
As you can see, The Bible has a lot to say about your finances. Yes, much of it is common sense and well-known wisdom. But I wonder how much of it would be considered common sense if it had never been written down there.
What do you think? What are your favorite financial verses from The Bible or other religious texts? What has The Bible taught you about money? Comment below!
The post What The Bible Can Teach You About Money appeared first on The White Coat Investor – Investing & Personal Finance for Doctors.