FINANCIAL STEWARDSHIP
Thomas Edison, the great American inventor and entrepreneur said, “THERE IS NO SUBSTITUTE FOR HARD WORK.”
Prov 28:19 (ESV) Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty.
AVOID SHORTCUTS
GAMBLING
Gambling tends toward highly addictive behaviour and potentially financial ruin.
The Bible doesn't call gambling a sin as such, although the Bible warns against the love of money and get-rich-quick schemes.
Prov 28:20 (NLT) … whoever hastens to be rich will not go unpunished.
Gambling is not a good alternative for earning extra money.
Each game you play at a casino has a statistical probability against you winning.
Slot machine odds are some of the worst, ranging from a one-in-5,000 to one-in-about-34-million chance of winning the top prize when using the maximum coin play.
Easy come, easy go: About 70% of lotto winners lose or spend all that money in five years or less. *
Prov 20:21 (ESV) An inheritance gained hastily in the beginning will not be blessed in the end.
Prov 23:4-5 (NLT) Don’t wear yourself out trying to get rich. Be wise enough to know when to quit. In the blink of an eye wealth disappears, for it will sprout wings and fly away like an eagle.
* https:// rd.com/ list/ 13-things-lottery-winners
The SA lottery & Powerball
The odds of winning South Africa’s lottery are 1 in 20,358,520. For Powerball, the odds are even worse, 1 in 42,375,200. You are:
20,000 times more likely to be born with an extra toe than winning the SA lottery. *
* https:// businesstech.co.za/ news/ wealth/ 744917/ south-africas-r120-million-powerball-jackpot-here-are-your-actual-odds-of-winning/
The SA lottery & Powerball
58 times more likely to get struck by lightning (1 in 350,000) than winning the standard Lotto jackpot – and 121 times more likely than winning Powerball. *
5.4 (Lotto) to 11.3 (Powerball) times more likely to be attacked by a shark – 1 in 3.75 million odds. *
* Ibid.
The SA lottery & Powerball
6.1 to 12.7 times more likely to win a gold Olympic medal – 1 in 3.33 million odds. *
1,628 to 3,390 times more likely to hit a hole-in-one while playing golf – 1 in 12,500 odds. *
* Ibid.
On the darker side…
The World Health Organization estimates that 5% of suicides are related to compulsive gambling. The National Council on Problem Gambling says 20% of gambling addicts attempt to kill themselves, a suicide rate more than double that of any other addiction. *
How does something that many see as harmless cause such irreparable damage? Chris Wright explains: “For the majority of addictions, how much you spend is regulated by how much the body can endure. There is only so much heroin, cocaine or vodka you can consume before you end up in a hospital or a morgue. Gambling is subject to no such constraints… the central befuddling fact is this: Gambling kills you because it doesn’t kill you.” *
* https:// maryhaven.com/ harmless-harm/
GET RICH QUICK SCAMS
Beware of “get rich quick” schemes:
Prov 13:11 (ESV) Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
1 Tim 6:10 (ESV) For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.
Tell-tale signs: Many get rich quick schemes operate in legally gray areas or are outright scams. They might involve deceptive practices that could lead to legal troubles or financial loss.
They offer exaggerated and above-market returns within a short period of time, with the promise of little to no risk. There are two golden rules when it comes to investing.
It takes time to make money.
The higher the return, the higher the risk.
New members are constantly recruited to join the scheme.
There is urgency to join the scheme and no clarity on how the scheme works.
The scheme is not registered with or regulated by any recognised authority.
They use the testimonies from existing members who’ve earned big money to promote the scheme.
The grammar and language used is often poor.
They use generic domains for email (e.g. @gmail.com, @yahoo.com, @hotmail.com, and @outlook.com, etc.) rather than business domains. Sometimes they will use look-alike domains e.g. [email protected].
Examples Of Get-Rich-Quick Scams
Ponzi Schemes: These illegal schemes promise high returns, but don't invest your money. Early investors are repaid using money deposited by new investors.
Pyramid Schemes: Here, participants pay a fee to join a hierarchy. Profits come from recruiting new members, not selling a product.
Advanced Fee Fraud: In the popular 419 fraud, the victim is asked to pay an advance fee in order to receive something of greater value.
However, the fraudster never delivers on their promise, and the victim loses their money.
The scammer claims to be from a foreign country, e.g. Nigerian Prince, claims to have access to a large sum of money, but needs your help to get it out of the country.
They ask you to pay a fee in advance.
They pressure you to act quickly.
Pump and Dump: This is a type of securities fraud in which the perpetrators artificially inflate the price of a stock through false or misleading statements or rising signals, in order to sell the cheaply purchased stock at a higher price.
Once the operators of the scheme "dump" (sell) their overvalued shares/stock or whatever, the price falls and investors lose their money.
Job placement service scam: While many job placement services are legitimate, some are not and are actually scams.
These scammers lie to job seekers and promote fake or outdated job openings.
They also charge job seekers fees for using their “services.”
Coaching Scheme: You pay to learn something that will supposedly enable you to make money. They say things like:
They’re affiliated with well-known online sellers (That’s not true.)
Their “experts” will teach you a “proven method” for building a successful business.
“You can make big money with little or no experience. Guaranteed!” (No one can guarantee that you'll make money.)
“Our students make between 50% to 100% return on their investment in the first year.” (These are simply made-up numbers.)
Work-at-home scams: These are get-rich-quick scams in which a victim is lured by an offer to be employed at home, very often doing some simple task in a minimal amount of time with a large amount of income that far exceeds the market rate for the type of work.
The true purpose of such an offer is for the perpetrator to extort money from the victim, either by charging a fee to join the scheme, or requiring the victim to invest in products whose resale value is misrepresented. *
* https:// en.wikipedia.org/ wiki/ Work-at-home_scheme
Reshipping job scam: The “job” responsibilities require you to receive, repackage and reship packages to a specific address, typically overseas. *
These packages are often filled with devices that you’ll sometimes be asked to test to determine if they work. *
These packages contain items that have been purchased with stolen credit cards, meaning you essentially act as the scammer’s “mule” by sending it overseas for them.
* https:// en.wikipedia.org/ wiki/ Work-at-home_scheme
Data entry job scam: The scammers claim that you can earn a lot of money while doing very little work.
You are told that you need to pay for training or share your bank account information.
Envelope stuffing: Scammers advertise a high-paying job simply stuffing envelopes for a company.
To start doing the job you need to make an investment or purchase a starter kit.
Often the material you are required to mail is the same scam letter you responded to. Your actual job is to recruit more people and make them fall for the same scam.
Home assembly: A job posting advertises home-based craft or assembly positions that allegedly earn you large amounts of money.
Once you have paid the company for supplies and training materials, you are able to produce goods that are purchased by the company as soon as their work is complete.
However, when the finished products are submitted, the company refuses to buy them, often citing reasons like “substandard craftsmanship,” and then denies payment.
PLANNING AHEAD
INVESTMENT
Is it wrong to save and invest?
Matt 6:19-20 (ESV) “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal. But lay up for yourselves treasures in heaven…”
We store up treasures in heaven by channeling our resources toward godly concerns, rather than earthly concerns.
But other parts of Scripture (as we’ll see now) speak of the wisdom of good financial management and savings.
Jesus is highlighting:
ETERNAL PERSPECTIVE: Jesus contrasts earthly treasures with their heavenly counterpart, clearly stating that the latter is more important. Heavenly treasures are eternal, while earthly treasures are temporary and can be destroyed. *
MOTIVE: Many people hoard wealth out of fear of losing it, for social status, or to gain approval. The question is not whether we should manage our money wisely but, rather, why do we save? *
PRIORITIES: Jesus is concerned about our priorities and warns against hoarding—that is, amassing earthly treasures for the sake of it. Instead of hoarding money and endlessly acquiring earthly possessions, our focus should be on what God considers most important. After all, our heart is where our treasure lies (Matt 6:21). *
* https:// gotquestions.org/ earthly-treasures.html
Prov 6:6-8 (NIV) Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.
A lazy person doesn’t think ahead and make provision for the future.
Prov 20:4 (ESV) The sluggard does not plow in the autumn; he will seek at harvest and have nothing.
EMERGENCY FUND
Plan for emergencies:
Prov 22:3 The prudent see danger and take refuge, but the simple keep going and pay the penalty.
Financial advisors generally urge people to put away the financial equivalent of 3–6 months’ worth of total living costs for emergencies.
While such a reserve is definitely the end goal, starting small with a one-month reserve is a great start.
INSURANCE
Acquire Adequate Insurance. If you can afford it, adding insurance can be another layer of protection for you and your family. Research these three types of insurance. Check if they are available to you.
Health Insurance—this can provide you and your family protection from the heavy financial burden of medical expenses.
Life and Disability Insurance—this can provide you and your family with protection from the financial burden of sudden death or loss of income due to disability.
Property Insurance (House, Car)—this can provide you and your family protection from the financial burden if there is damage to your to your property or car (e.g. due to fire, flooding, lightning, theft).
Joseph warned Pharaoh about seven years of famine which would follow
the seven years of plenty.
He advised him to store as much grain
as possible in the good years. He and
his people then had a storage of
wheat during the years of famine.
This simple step of slowly building up a supply of wheat saved his entire country and even benefitted other countries.
Similarly, good financial stewardship entails taking steps during years of plenty to protect you and your family from future financial hardship that may come your way.
Despite being a godly man, The prophet below failed to do this.
2 Kings 4:1 (NIV) The wife of a man from the company of the prophets cried out to Elisha, “Your servant my husband is dead, and you know that he revered the Lord. But now his creditor is coming to take my two boys as his slaves.”
INVESTMENT
Prov 13:22 (ESV) A good man leaves an inheritance to his children's children, but the sinner's wealth is laid up for the righteous.
One of the easiest and safest ways to invest your money and in your future is to put some away in a safe place such as a savings account. Consider paying a predetermined amount of money into savings.
Matt 25:27 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.
Remember that while savings accounts are low-risk, they have low interest rates – often too low to keep up with inflation (and bank charges). So, while your money is growing, it’s losing value.
LOW RISK, LOW RETURNS:
Savings accounts,
government bonds
MODERATE RISK,
MODERATE RETURNS:
A fixed-deposit account offers
a reasonable interest rate, and
your capital is guaranteed, but
you will not have access to your money for the duration of the term.
Corporate bonds, listed property, unit trust investments, balanced funds.
HIGH RISK, HIGH RETURNS:
Cryptocurrencies, hedge funds, unlisted shares, venture capital
Over many decades, the investment that has provided the highest average rate of return has been stocks. But there are no guarantees of profits when you buy stock, which makes stock one of the most risky investments.
Investment managers try protect their clients’ money by spreading their risk across different investments and investment types, so that they don’t have all their eggs in one basket.
But sometimes the highest risk is the investment manager. According to the FCA (Financial Conduct Authority) in the UK, investors are being routinely ripped off by wealth managers and stockbrokers, highlighting the need for caution when entrusting finances to professionals.
Set a retirement goal
Investing is “putting time, effort, or money into something and expecting some type of a return. One of the reasons you may want to invest is to create a way for you to eventually retire from work.
While there may be government or social programs in your area to help support you during your retirement years, you will likely need to supplement those programs with some of your own savings in order to cover all of your expenses.
The longer you invest, the more you can make. If you can, start saving or investing now.
SEEK EDUCATION & TRAINING
You can invest in yourself and your future is by obtaining an education.
The world will in large measure pay you what it thinks you are worth, and your worth will increase as you gain education and proficiency in your chosen field.
DEBT
Debt includes everything we owe as a result of items or services purchased but not fully paid for. Examples are payments on a home mortgage or car loan, student loans, and money we borrowed from a bank, relative or friend.
While Scripture does not call it a sin, it discourages being in debt.
Proverbs 22:7 The rich rule over the poor, and the borrower is slave to the lender.
What’s so bad about debt? Debt places the debtor in a position of servitude to another person or institution.
The obligation to pay off our debts is a restriction on the freedom to decide what to do with our money. The more we owe in debt, the less freedom we have.
Survey of “Evangelical” Christians (c. 2003)
40% say they overspend each month.
40% pay $2,000 per year in credit card interest.
60% state serious marital problems are money-related.
In 90% of divorce cases, arguments about money played a prominent role.
The “average” American spends 6 hours a week shopping but only 40 minutes a week playing with their children.
Be aware of your financial situation
Prov 27:23-24 (NIV) Be sure you
know the condition of your flocks,
give careful attention to your herds,
for riches do not endure forever…
Assets are resources with economic
value that will provide a future benefit,
i.e. something one owns or something
that is owed to an individual.
Make a list of all your assets and all your debts (liabilities). What is your net worth? (the net value of your assets minus the value of your liabilities)
Are you solvent?
If your assets are worth less than your liabilities, you're technically insolvent.
If you can still pay your bills from cashflow, you don't need to claim bankruptcy, but eventually without a significant change, you will go bankrupt.
Bankruptcy is a legal process where you're declared unable to pay your debts. It helps people who can no longer pay their debts get a fresh start by
liquidating assets to pay their debts
or by creating a repayment plan.
As a Christian, you need to pay your debts:
Ps 37:21 The wicked borrow and do not repay …
Rom 13:8 Let no debt remain outstanding, except the continuing debt to love one another…
Standing Surety
Standing surety (aka standing security, is a legal term that refers to the act of guaranteeing another person's debt or obligation i.e. you promise to pay if they default.
The Bible cautions against standing security for someone else’s debt:
Prov 22:26-27 Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.
In particular we are warned about standing security
for a neighbour’s or a
stranger’s debt:
Prov 11:15 Whoever
puts up security for a stranger will surely
suffer, but whoever refuses to shake hands in pledge is safe.
Prov 17:18 One who has no sense shakes hands in pledge and puts up security for a neighbour.
7 STEPS FOR GETTING OUT OF DEBT
1) Borrowing
Avoid loan sharks. In South Africa, a
loan shark is someone who lends
money illegally without permission
from the SARB (who require lenders
to register, provide transparent and
accurate information to borrowers, and adhere to strict interest rate caps.
With price increases on everything from fuel to food making it increasingly tough for households to make ends meet, unlicensed lenders are stepping in, offering loans to the desperate at astronomical interest rates. *
Loan sharks prey on the most vulnerable people in our society. They make false promises of a quick and easy loan, then demand extortionate levels of repayment once their victims are trapped in a cycle of debt. *
* https:// payplan.com
Credit cards are often seen as an easy source of
credit, but there are pitfalls to be aware of.
Credit card interest rates are usually very high,
some beyond a 20% annual percentage rate,
far higher than mortgages or car loans. *
Credit card issuers charge interest only if you
carry a balance over from one month to the
next. If you pay your balance in full every
month, your interest rate is irrelevant,
because you don’t get charged interest at
all. It’s important to know the exact payment
due date so that you can pay your balance in
full and avoid accruing any interest (the sensible thing to do). *
Once you’ve had a credit card for a while, the issuing lender or bank might offer to raise your credit limit but think twice before accepting it. It’s safer to keep your credit limit to an amount that you can pay off easily, and a higher credit limit might tempt you to over-reach. *
* https://oldmutual.co.za/ articles/ 10-things-to-know-before-applying-for-a-credit-card/
After God used him to provide for a prophet’s widow, Elisha advises her, “Go, sell the oil and pay your debts, and you and your sons can live on the rest.” (2 Kings 4:7, ESV).
Note that she is first to pay her debt – then to live off the rest.
2) When you get money, don’t spend it before paying debt.
3) Consider a radical change in lifestyle
Downscale if necessary.
Sell what you don't need.
Cancel non-essential services (e.g. DSTV, Netflix).
Cancel unnecessary policies.
Get a smaller and more economical car.
Move to a more affordable house or flat.
Live more simply: Take an honest appraisal of your possessions
to determine how much time and money they need to maintain.
Then honestly determine if the demand has adversely impacted
your relationship with God, family, and friends.
1 Tim 6:8 (NIV) But if we have
food and clothing, we will
be content with that.
Paul promoted a quiet,
simple life.
1 Thess 4:11 (NIV) …
make it your ambition
to lead a quiet life: You
should mind your own
business and work with
your hands, just as we
told you…
Stop wasting money on non-essential habits that are bad for your health – e.g. smoking and drinking alcohol.
Spending on alcoholic beverages amounted to R90.6 billion in 2014 and 3.9 billion litres of alcohol was sold.
Poor and middle class households in South Africa spend around 3% to 4.5% on alcohol per month (2011).
South Africans spend more on beer than they do on vegetables. In 2016, beer accounted for 2,1% of total household spending.
This is the same as what is spent on personal care (2,1%), but higher than vegetables (1,5%), sweets and desserts (0,7%) and fruit (0,3%). *
* https:// statssa.gov.za/ ?p=10269
South Africans spend more on tobacco than they do on vegetables. In 2016, tobacco accounted for 1,9% of total household spending compared to vegetables (1,5%), sweets and desserts (0,7%) and fruit (0,3%). *
South African smokers spend an average of R263 on cigarettes a month (2022). **
Stop smoking and save R3156 a year. If you smoke a packet of 20 a day you’ll save R11,315 a year by quitting.
* https:// www.statssa.gov.za/ ?p=10269
** The Global Adult Tobacco Survey 2022
You’ll save more because of less health issues.
Smoking is the leading cause of lung cancer.
The NIH estimated that 25 708 deaths among persons aged 35–74 in 2016 were smoking-attributable. *
The economic cost of smoking was R42
billion. *
* https:// ncbi.nlm.nih.gov/ pmc/ articles/ PMC7822111
Picture: https:// healthline.com/ health/ smoking/effects-on-body
4) Economize
Look for bargains, shop around.
Don’t buy impulsively.
Prov 21:5 The plans of the diligent lead to profit as surely as haste leads to poverty.
Don’t waste (Waste not, want not).
Prov 21:20 (ESV) Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.
5) Compile a budget and stick to it
A budget is essentially a plan. Using a budget, you plan how you will use your money for a certain period of time.
1 Cor 16:2 On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up, so that when I come no collections will have to be made.
Planning ahead and following a budget will help you take control of your temporal life, protect your family from potential hardship, will help avoid financial stress, and help prepare for your future.
See if you can afford payments before buying or committing to additional expenses.
Luke 14:28 “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?”
How to compile a budget:
Calculate your net income. Find out how much money you make each month.
List monthly expenses. Make a list of your monthly expenses.
Label fixed and variable expenses.
Determine average monthly cost for each expense.
Make adjustments.
As you start to put your new budget together, you may find that your expenditure exceeds your income, There are two basic ways to fix this problem.
Spend less money. This sounds simple, but it can be difficult if you are unwilling to change and to cut out useless spending.
Earn more income. It is important to remember that career advancement takes time and sacrifice. It seldom happens overnight.
6) Plan to get out of debt
This might include:
Consolidating debt.
Switching for a better interest rate.
Contacting your creditors and negotiate a payment plan.
Establish a debt repayment plan.
Avoid debt relief scams
Companies promising debt relief services include a lot of scammers, but even lawful debt relief companies are expensive and risky.
Debt relief companies offer to negotiate with creditors on your behalf to persuade them to accept less than you owe.
Scammers typically collect fees for these services upfront and then do little or nothing—a situation that leaves you worse off than when you hired them.
When drafting a debt repayment plan, think about the following questions:
How much debt do you have?
What are the interest rates?
How much do you owe and how long will it take you to pay it back?
Knowing the answers to these basic questions is vitally important to your success in understanding your current debt reality.
Action 1: Pay Extra Toward Your Debt
The longer you have a loan, the more interest you will pay. If you pay extra towards debt, you pay less interest.
Action 2: Decide Where to Pay Extra
Highest Interest First
Eliminates most expensive debts earlier.
Lowest Balance First
Reduces number of creditors more quickly.
Reduces number of minimum payments more quickly.
Provides quicker psychological wins.
Action 3: Use the rollover method
In this method, once a debt is paid off, you apply the money you were paying to that debt to the next debt, and so on.
Action 4: Save and Invest for the Future
Once debt gets eliminated by the “rollover method,” the next logical step is to roll over those same payments that had been going toward paying off debt to investing in your future.
7) Seek wisdom and counsel
Prov 12:15 (NIV) The way of fools seems right to them, but the wise listen to advice.
One reason people have financial problems is that they do not seek advice. The two primary hindrances to getting financial advice are:
Pride: we perceive getting help as a sign of weakness.
Stubbornness: we don’t want to be told we can’t afford what we have already decided we can’t do without.
Prov 19:20 (ESV) Listen to advice and accept instruction, that you may gain wisdom in the future.
Here are 3 good sources for counsel:
Scripture: What does the Bible say about a particular issue?
Ps 119:24 (NIV) Your laws please me; they give me wise advice.
Counsel of godly people: Seek out those who have knowledge and experience in a particular area. They might show us how to look at an issue from a different perspective or offer alternatives that we never considered.
Prov 15:22 (ESV) Without counsel plans fail, but with many advisers they succeed.
Ask God directly through prayer, meditation, and listening for the “still, small voice” of the Holy Spirit.
James 1:5 (NIV) If any of you lacks wisdom, you should ask God, who gives generously to all without finding fault, and it will be given to you.
Ps 32:8 (NIV) I will instruct you and teach you in the way you should go; I will counsel you with my loving eye on you.
John 16:13 (NIV) “But when he, the Spirit of truth, comes, he will guide you into all the truth.”
AUTHOR: Gavin Paynter
For more sermon downloads: https:// agfbrakpan.com
For more sermon downloads by Gavin Paynter: https:// agfbrakpan.com/ free-sermon-downloads-by-speaker/ Gavin%20Paynter
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