OK, I admit it. That was a cheeky title. But, hopefully, it got your attention. I’m not implying your pastor is trying to hide something from you. Merely that the average pastor is no more qualified to offer financial guidance than the average billionaire is qualified to preach a sermon on 1 Timothy 6:10.
Your pastor has made the study and teaching of scripture their life’s work. As such, they are eminently qualified to teach you the Biblical view of money which basically distils down to these points:
- Money is temporal, God is eternal
- Next to God, money’s importance is insignificant
- Money is one of the biggest idols in modern culture and
- We should give joyfully to God’s kingdom and purposes
Sure, they will acknowledge that money is an essential part of our lives in this world and that, as such, we should use it but take care that we don’t make it an idol. However, when it comes to the nuts and bolts of understanding how money works and managing it in our day-to-day lives, the average pastor is no no more knowledgeable than the next guy.
Here are a few things that financial advice gurus teach that pastors do not.
1. A “Pay yourself first” Mentality
As Christians, we may choose to amend this to a “Pay yourself second” mentality.
Your pastor understands kingdom investment (i.e. giving to the poor, missionaries, church ministry etc). They understand the scriptural notion of giving to the kingdom from the first fruits of your labor (i.e. tithes and offerings). This is kingdom investment, or storing up treasure in heaven.
The reason the Bible asks us to give of the “first fruits” is simple. If we left giving to God’s kingdom until last, there would never be anything left over. That’s because of our basic human nature.
The same rule applies when “paying ourselves”. This rule is best articulated in George S Clason’s book, The Richest Man in Babylon. One of the immortal lines in this book is when the money-lender says “… a part of all I earned was mine to keep.”
In this story, he advocates the idea of living on less than you earn and saving ten percent of all your income. Just as with our kingdom-giving, if we want to build up our savings, we have to do this before we start paying our monthly bills and expenses (i.e “Pay yourself first”). Otherwise, there will never be anything left to save.
Most of us think of everything we earn as ours to keep. This simply isn’t true. There is rent,utilities, insurance, food, clothing, motor vehicles etc. All these necessary expenses eat up our earnings. If left unchecked, they will eat up everything down to the last penny. This is why we should pay ourselves first, just as we give to God’s kingdom first. That way, when we run out of money, we are forced to look for ways to reduce our expenses, rather than choosing to erode our savings.
You will find few pastors who assert that saving is a bad idea or who equate saving with the love of money. But you won’t hear many sermons endorsing the “Pay yourself first” mentality either.
So what does it mean to “pay yourself first”? Simple. When you get your paycheck, pay your tithes and offerings. Then put another 10% into a savings account which is not to be touched. Then use what is left to pay your monthly living expenses.
2. To Make Money Work for You
Like most of us, pastors understand the concept of working for money. They are familiar with verses like “By the sweat of your brow, you will eat your bread…” (Genesis 3:19), or “The worker deserves his wages.” (1 Timothy 5:18).
However, they are generally less familiar with the idea of putting money to work in order to earn more money. They don’t understand the different asset classes or how to invest them. Nor do they necessarily understand the power of compound interest any better than the next person. Terms like dividends and market fluctuation are not a common part of the average pastor’s vocabulary. These are foreign, dare I say, slightly scary concepts to most people, pastors included.
Conversely, the people that appear to understand these concepts are generally wealthy investor types who seem to know more about financial instruments than scripture. Read, lovers of money. As such, pastors tend to do what most of us do; shy away from that which we fear or don’t understand and put up a “Love of Money” warning sign to scare off any inquisitive church members lest they fall foul of the beast. Much like the “Here be Dragons” illustrations in uncharted areas of medieval maps.
Like most of us, they fail to grasp that the pension / 401(k) schemes in which most people have placed their trust are engaging in the exact same investment activities as those alleged “lovers of money” who study the equities or property markets and manage their own investment portfolios.
It’s odd to me that we seem to view taking direct control of our financial destiny as somehow less Godly than paying a stranger to do it for us. The fact is, learning about finance and managing your personal wealth is not greed; it’s good stewardship.
The sad thing is, those pension / 401(k) schemes may very well come up short and, by the time we, their clients, find out, it will be too late to rectify the situation.
By investing your savings and making that money work for you, here and now, you can better ensure that you are in a position to support yourself in retirement and leave a financial legacy that continues to build God’s kingdom here on earth, long after Jesus calls you home to be with him.
3. The Power of Leverage
The Bible has much to say about usury and charging interest on loans. When it comes to this subject, your pastor is on firm ground as there is plenty of scripture on which to draw. Yes, there is room for interpretation on this and the complexities of lending money in the modern economic context might present challenges that create varying interpretations of scripture. Point is, there is scripture to draw from.
Conversely, the Bible has little guidance on the subject of borrowing at interest. However, the fact is that borrowing sensibly can leverage your investment’s growth potential by orders of magnitude. For instance, if you have $50,000 to invest, a 10% yield would give you an income of $5,000/year.
However, if you could borrow money at a 75% Loan to Value (LTV), you can leverage your returns by a multiple of four. In this case as little as a 5% yield on the overall amount would equate to a 20% (5% x 4) return on your original investment capital.
4. It’s Okay to Lose Money
Your pastor will, in all likelihood, have had to counsel congregation members who, through inexperience or naivety, have suffered devastating financial losses. The story is all too common; newly retired person lends their entire pension payout to a friend, family member or straight-up con-artist to help them in a new business venture that subsequently doesn’t work out.
These people usually don’t think of themselves as investors. Rather, they are good, trusting people trying to help someone in need. The failed ventures invariably result in big losses and the accidental investor seeks help and guidance from their minister when they realise they have lost everything.
Unfortunately, the pastor can only offer spiritual and emotional support in these situations. Even someone with the necessary financial savvy can’t lock the barn door after the horse has bolted; the money is gone. What do you say to someone who has lost their entire retirement fund simply because they tried to help a person in need? Small wonder your pastor is unlikely to say, ‘Go ahead and take the risk. After all, it’s only money.’
The truth is all investment involves an element of risk. As investors, we look for ways to reduce that risk by increasing our knowledge. Sometimes we win and sometimes we learn – and those lessons come at a cost. The investor mind-set has to be okay with losing money, otherwise the would never risk it by investing.
5. It’s Okay to Talk About Money
Talking about money is awkward. In many cultures, it is not considered polite to talk about money and, in Christian circles, it is often thought of as a worldly subject, not worthy of our spiritual calling. The mere act of bringing up the subject will probably raise concerns among your Christian peers that you love money more than you ought.
Pastors, in particular, find it a difficult subject to address. Those churches that are prepared to grasp the nettle and talk about money invariably do so in the context of giving money to your local church (i.e. their church). In light of the cynicism this generates from the general community outside the church, many pastors choose to go to the other extreme and not talk about money at all.
This is sad because money is such a fundamental part of everyday life. We can address the danger of drugs, alcohol or sexual immorality from the pulpit or in our youth services. As believers, it is relatively easy to remove ourselves from situations where we might be tempted by such lifestyles and choices. Don’t go to parties where we might encounter these temptations, choose our friends more carefully etc.
But where do we go to get away from the challenges that money presents in our lives? There is no opt-out alternative that the church can offer to take money out of the equation. It is an intrinsic part of our lives and, as such, deserves to be discussed, studied and understood in a Biblical context.
1 thought on “5 Things Your Pastor Won’t Tell You About Money”