Biblical Prosperity

In contrast to confusion over who owns a property, are Western nations that have developed the structures that allow property to be leveraged for economic development. Here is more from Fernando De Soto in The Mystery of Capital.

The recognition and integration of legal property rights was a key element in the United States becoming the most important market economy and producer of capital in the world… The six effects of an integrated property process mean that Westerners houses no longer merely keep the rain and cold out. Endowed with representational existence, these houses can now lead a parallel life, doing economic things that could not have been done before.

Citizens of advanced nations are thus able to split their assets into shares, each of which can be owned by different persons, with different rights to carry out different functions. Thanks to formal property, a single factory can be held by countless investors, who can divest themselves of their property without affecting the integrity of the physical asset.

Perhaps rather than sending billions of dollars of aid to developing nations we should provide finances for their young people to get legal training in property law to put these legal structures in place so the people can prosper. Such laws also protect ownership as many people(s) have suffered the taking of their land unjustly as well. This is stealing and God cannot bless land that is taken from others unjustly. Though some cultures celebrate common ownership of land, in most cases this does not allow for economic prosperity. The idea of private property rights is embedded right in the Ten Commandments. “You shall not steal” and “You Shall Not Covet” underline this principle. God’s plan is individual ownership and stewardship.

Land is on God’s heart. It is a key to how he prospers his people. Our experience has been one where the most significant increases in our personal net worth have come as the result of real estate transactions. If you don’t own land it is very likely that God wants to help you get some. If you own land possibly God wants to give you more. Rick Joyner states that the great thing about Real Estate is that it is “real”. It not a piece of paper related to a stock option purchase in a market somewhere. It is real. You can go there and walk on it. You can grow corn on it if you want.

Before we get in to the scriptures on home ownership let’s look some more at the importance of land. In light of the previously described link between economic development and land ownership in first world nations, it is important to look at the developing and former communist nations of the world that are hamstrung from economic growth because of weak or nonexistent property rights. For prosperity to come to these nations, one of the first needs is to improve the laws governing property ownership so people can own property free and clear.

Sadly, in many nations of the world, a piece of real estate might have as many as 5-10 different people claiming ownership of it and there is no functioning system to determine who owns the deed to this land. Whose land is this anyway? One person claims his uncle gave him the land, another says he bought it for an amount of money from the neighbor; another says it is theirs because they have been squatting on it for the last few years. As long as it cannot be determined who the actual owner of the land is and that it is free of claims against it, no bank will accept this land as collateral for a loan that might be used to start a business. Established and legal property rights systems can create capital and economic lift for everyone.

Fernando De Soto in his book, The Mystery of Capital, describes this predicament.

Imagine a country where nobody can identify who owns what, addresses cannot be easily verified, people cannot be made to pay their debts, resources cannot conveniently be turned into money, ownership cannot be divided into shares, descriptions of assets are not standardized and cannot be easily compared, and the rules that govern property vary from neighborhood to neighborhood or even street to street. You have just put yourself into the life of a developing country or former communist nation; more precisely, you have imagined life for 80% of its population……80% of the world is undercapitalized; people cannot draw economic life from their buildings (or any other asset) to generate capital. In Haiti…according to our surveys, 68 percent of city dwellers and 97 percent of people in the countryside live in housing to which nobody has a clear legal title. Legal property  creates financial empowerment for individuals in any culture.

Really…80% ? Is it possible to break out of this cycle ?    Yes.. practial details to come.

The Biblical story of Ruth is, of course a great love story. But it is also the story of God giving a woman physical land. God took her from gleaning leftovers along the edge of the field to become the owner of the field. When she married Boaz, who owned the field, she became an owner of the very field she formerly gleaned in as a pauper. What a great story of financial prosperity and God’s redemption. Take the time to read it.

In the United States, the number one way that people finance new business ventures is by borrowing money against their house, which is of course located on land. So the best preparation for starting a business is to purchase a house and start paying it off over time. This will eventually build equity, which will allow you to finance a business start up. Small business startups create 70% of new jobs. Most of these businesses are family businesses and as with Abraham and his sons, land is often central to birthing these new businesses.

There is a practical link between economic land ownership and economic development. Land ownership is the proving grounds for business. God gave me 20+ scriptures about home ownership that I will be sharing in the next couple of blogs.

In Genesis 12:1 it refers to the “land” God had for Abraham. It was not a “mystical” land off in heaven somewhere.

 The LORD had said to Abram, “Leave your country, your people and your father’s household and go to the land I will show you.”

God gave this nomad a land to call his own and to build in with his descendants. He gave Abraham and his family the Land of Israel as a unique homeland where his descendants were supposed to create the nation that was the model for the world. Physical land was central to God’s plan to prosper Abraham. Land was central for Abraham to receive God’s blessing and prosperity. It was practical and it is Biblical.

We see a parallel lesson if we study the great Native American tribes from North America. The tribes along the East Coast were less transient and would stay in one place and farm the land as well as hunt. They tended to survive and prosper. Those tribes along the West Coast that were nomadic hunters would travel to seasonal hunting grounds. They were more likely to starve and die. They could never prosper because they never settled down and stayed in one place. Simply stated…when you are a nomad there is only so much you can carry so it is hard to prosper.

There is something about land that is really important to God.

In the years following the Civil War in the United States, a pastor by the name of Russell Cronwell traveled America and stirred millions of people with a story he told. The name of the story is Acres of Diamonds. It is the story of an Indian merchant who had been told by a prophet that he would become rich if he would only seek his treasure. So the merchant traveled the world in search of treasure only to return home after many years disappointed and defeated. As he came back to his abandoned house he needed a drink of water but the well on the property was covered with silt. So he took out his shovel and dug a new well. As he was digging he struck what became the world’s greatest diamond mine. His fortune was not “out there” somewhere but right under his nose all along.

Generally speaking the best opportunity could be right under your nose. I love it when God asked Moses, “What is in your hand?” God did not ask this because he didn’t know. He asked it because he wanted to direct Moses attention to use what he had already been given. Perhaps our greatest opportunity to enjoy prosperity could be the very thing under our feet. It doesn’t get any more practical than this.

Land is important to God’s plan for His children. One of the first things God did in establishing a covenant with Abraham was give him land. Previous to this Abraham did not have a homeland. Abraham’s father and his family were pastoral nomads, wandering from place to place for varying periods of time. His father worshiped idols in a city dedicated to wickedness. Abraham was told by God to go out into a place in which he would receive his inheritance. It was later referred to at the Promised “land.” It was land!

A friend of mine has a drafting business. He worked in construction for many years before that. He is now investing money in rental properties. This is working out well for him because he knows the industry and has a natural authority there. Where do you have confidence to invest? Is there an area your parents or family members have found success? What are the natural gifts God has given you? Are you good with numbers? Good with people? Move toward these areas.

This principle of confidence applies if you are buying stocks or stock funds. Buy stock in the companies you know and trust. I mean look around your house. What is the brand of your clothes washer? Your refrigerator? Do you like them? Do they  work well? Where do you like to stop for coffee? Buy stock in that company.

Should you buy stock in a gold mine in South Africa that you have never seen? Nope.

Should you buy gold and keep it in a safe in your basement? Not unless you want to buy the guns and ammo to defend you house from intruders. We will talk about gold as an investment, but first let’s talk about Real Estate as an investment tool.

I believe God loves Real Estate. We will explore this in the next few blogs.

During the credit crisis of a few years ago the Chinese came through almost completely unscathed. The credit crisis and ensuing world recession was caused by some complex financial instruments that the Chinese didn’t totally understand. Since they didn’t have confidence to invest in these financial instruments they were saved the hardship suffered by banks and financial institutions around the world. We could criticize them and say that they are not very sophisticated investors or we could learn from them. They didn’t overstep into an area where they did not have confidence and it saved them huge losses.

I meet some people making money in business and they say the best way to make money is starting a business. They say Real Estate is a “no win” venture. I meet other people making money in Real Estate and they say business is a “no win” venture. Guess what? They have found where they have grace to be fruitful. Grace gives them confidence.

A friend of mine is a manager in a metal working plant that produces metal fixtures from different kinds of metals for manufacturing. He tells me about how he is investing in metal commodities. He understands the supply and demand of these metals and it is working well for him. He has a natural authority in this area. However, I would never have confidence to invest in this way.

I have added the Facebook page for my book A Practical Path to A Prosperous Life to the right hand column of this blog. Please take a moment to “like” this page. On this Facebook page I share stories of people that have been helped by the book and what I am teaching here. Thanks so much.

As we look at investing and have confidence that the natural state of things is to grow, then one of the keys that many investment advisors will tell us was actually published in the Bible long before they became aware of it. Diversify! Read Eccl. 11:1, 6

 Ship your grain across the sea; after many days you may receive a return. Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land…Sow your seed in the morning, and at evening let your hands not be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well.

The reason to diversify and spread our investments out between different areas and venues of finance is that it minimizes risk. If we hold a variety of investments that perform differently in various environments, then we are protected from loss if one area goes bad. This minimizes risk or as some will say…it is a hedge. What that means is it functions as a hedge against losses.

Bill Gates sold some of his stake in Microsoft years ago to diversify his holdings. The money was then invested in other areas that created financial return. If he would have held all his Microsoft stock he would have made more than if he would have diversified, however he saw diversity as that important he was willing to earn less to achieve it.

Another practical reason for a Christian to hold a variety of investments that perform differently in various environments is that each one will be an education for us. As we try different things, I believe we will find one area that has more “grace” for us than others. So maybe we can grow that area significantly while maintaining the other areas of investment.

Fear causes people to panic when the market is dropping. Obviously this makes for poor long term results. The experienced investors beat the inexperienced investors in down markets, because the inexperienced investors panic and sell and the experienced investors buy when the market is down. History has shown that the best time to buy is during times of distress, however very few have the courage, means and discipline to do this.

Be realistic about expected investment returns. Generally speaking 10% is the maximum benchmark over the long term. If anyone is offering you significantly more than this, it should raise a red flag of warning for you. Don’t expect to beat the market averages. Your long term investments should be based on buying and holding good investments, not trying to time when you should be in or out of a particular investment.

Greed will push an investor to think they have some special insider information and can predict what markets do. Markets generally have the current economic information calculated in to the current pricing. The market does not have the unexpected information calculated in and that is what makes it volatile and susceptible to insider trading. Rapid, reactionary trading is called active investing and accumulates multiplied fees and taxes that passive investing does not. 

What you have to remember about buying and selling securities or commodities in markets is that every time you are selling something because you think the time is right; for the transaction to be completed successfully, there is someone else on the other end of the trade thinking this is the right time to buy. So it really does put you in competition with them…trying to outsmart them or beat them…rather than holding on to shares for a long period of time and growing with the investment.