Moneywalk 163: Investing is for Everyone

This program will help you undo financial bondage.

Here are a few points you should consider when choosing investments and diversifying. Don’t invest money with any financial counselor, brokerage firm, fund company, or bank until you’ve researched them and competitors and the investment vehicles they offer. You can quickly check on the individuals and firms by calling the federal and state banking & securities divisions to ensure that they are properly licensed and to make sure they do not have an unreasonable amount of complaints filed against them.

Next, ask for and inspect the investment prospectuses for each investment vehicle to see what their one-year, five-year, and ten-year investment returns and expense ratios have been. This will generally denote that you should be investing in mutual funds until you are very knowledgeable about other types of investments (individual stocks, futures, oil & gas leases, etc.) and have set aside a small portion of money you’re willing to risk to determine if you have the skill to make money in those investments.

Many of the mutual funds you choose to purchase will have an electronic funds transfer provision that will allow you to immediately start investing in them by giving the brokerage house authorization to electronically transfer as little as $50 per month out of your savings or checking account that it will use to purchase shares of the mutual fund you choose to purchase. The electronic funds transfer option allows you to avoid the minimum start-up investment (normally $1,000 or more) that many funds require for people who send checks to the investment firm. If you can’t or don’t wish to use an electronic funds transfer option, then it’s worth your while to save the amount of money needed to meet the required minimum investment for the investment vehicle you want to invest in.

Don’t let market conditions fool you. It is always a good time to invest in mutual funds if you have taken care of the basic elements of your financial plan like adhering to a spending plan that keeps your monthly expenses below 70% of your take home pay, faithfully tithing and offering to you local church, saving six months of your take home pay in a money market account, eliminating all your debts (except your mortgage), being committed to never co-signing for anyone else’s loans/debts, saving for the short-term (a period less than five years until you need the money) and investing for the long-term horizon (five years or more until you will draw from the money but can afford to lose principles and is willing to take the risk).

Market downturns are perfect for doing what you really need to do to make money investing: buy when share prices are low and later sell when share prices are much higher. Yet, when investing for the long-term it is simply good to consistently invest month after month, which is called dollar cost averaging, because market history over the past decade has shown that very few 5 and 10 year periods have experienced share prices being less at the beginning of the period than they were at the end of the period.

Of course, past results are no guarantee of future returns. However, you can be very comfortable that being invested after your financial ducks are in a row will put you in a much better position and cause you to greatly exceed the inflationary factors in our economy that would otherwise diminish your assets over each 5 and 10 year period of time. So, by all means start investing or start working to create the situation in which you can use this great income producing and wealth building tool (investing) to enhance your life and ministry and thus enhance the lives of many others.

Please pray for this ministry and email any questions. May God bless you richly as you follow His plan!!!

Proverbs 6:6-11, Proverbs 30:25, Luke 19:8-10, 1Timothy 6:17-19

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