Would you take sage advice from the most profitable investor that ever lived? No, I am not talking about Warren Buffet. His success, while certainly impressive, pales in comparison to that of King Solomon – the richest and wisest man in history. Solomon’s proverbs are a treasure trove of biblical wisdom about the proper handling and investment of God’s money. I have been reflecting quite a bit lately on Proverbs 21:5 in which Solomon tells us “The plans of the diligent lead to profit as surely as haste leads to poverty” (emphasis added). What does it mean to be diligent, particularly as it relates to finances?
One key ingredient in being diligent is actually having a well thought out plan to start with. Most clients when they first come to us have no coordinated plan in place. More often than not, they have a hodgepodge collection of financial products they have been sold over the years and no idea really what they own or how these might (or might not) work together to accomplish their goals. It is analogous to digging a hole and haphazardly assembling building materials to build your dream home without first surveying the land and then carefully and thoughtfully designing a working set of blueprints. Not likely to produce the outcome you were hoping for! A well-crafted financial plan, by contrast, will provide the clarity and confidence you need to make wise financial decisions.
A second ingredient in being diligent is taking your time (the opposite of haste) to thoroughly evaluate your options and prayerfully come to a decision. I can’t tell you how many times I have seen well-intending folks make bad financial decisions as a result of a slick salesperson with a great pitch making promises they can’t and don’t intend to keep. The greatest skill an advisor possesses is not in talking about their product, but rather being a great listener and asking questions. A good advisor serves as a trusted guide on the journey, and is not focused on making a transaction. Do your homework. Be intentional about getting wise counsel from a well-trained advisor that is both highly competent and well-grounded in biblical principles. Kingdom Advisors is a great resource for finding an advisor who has been thoroughly trained and vetted in this area.
Getting back to Warren Buffet, it may shock you to learn that Mr. Buffet, through his philanthropic contributions to the Bill and Melinda Gates Foundation (Microsoft), is the single largest supporter of the abortion industry vis a vis Planned Parenthood. Sadly, this is just one example of many. A diligent values-based financial advisor should know that and alert you as to what companies in particular or business practices you might want to consider excluding from your portfolio in light of your values (e.g. pornography, companies that promote and exploit addictions, promote anti-family lifestyles). Establishing a screening mandate for excluding companies such as these is part of a well-crafted Investment Policy Statement (IPS) that should govern your portfolio investment decisions.
Lastly, being diligent requires executing and sticking with your plan. Other translations of this same verse describe this activity as “steady plodding”. A solid plan that is never implemented or lives only in a drawer isn’t going to do you any good. Nor is one that is abandoned at the first sign of trouble in the markets. Because life and the financial markets are both full of uncertainty, your plan should be flexible enough to anticipate these storms and have a reasonable margin for contingencies built in. Meeting with your advisor regularly to monitor progress and make appropriate adjustments along the way is key. Having a solid plan and staying the course will afford you the greatest probability of success.
Be a diligent investor – Make a plan!