I am not religious, but I am definitely not an atheist because I don’t know for sure that a god does not exist. The best word to describe me is agnostic.
I have my doubts about the Bible, but there is no denying that the Bible is an excellent manual for personal finance. If you want advice with money, forget financial advisors. Go to the Bible.
Perhaps the most important biblical financial verse in the Bible is Proverbs 22:7, which states that “the rich rule over the poor, and the borrower is slave to the lender.” This Biblical verse wowed me when I read it as a teenage boy in school. It opened my eyes to the fact that far from being equal, the world we live in today has powerful people and weak people, and coercion and slavery in modern times is carried out not with whips and chains but with debt, fees, penalties, and compounding interest.
The question is, which will you be? Will you be a borrower or lender, a slave or a master?
“Neither a lender nor a borrower be,” says Shakespeare, which is very noble. I personally like to be a master rather than a slave.
Borrowers are pathetic. They go to the bank and beg for money. Then they work nine to five, whoring themselves to the organization in order to earn cash to pay back the banker. These banks make incredible profits from lending. Which would you rather be, the borrower who works like a slave or the bank who owns the slave? I prefer to be the bank, which is why I own bank shares or, even better, bank ETFs.
When I recommend you lend, I don’t recommend you lend money to family and friends. Do not do this! You lend by getting experts to lend for you, that is, put your money into bond funds or, as I said earlier, buy bank ETFs. If you’re new to investing and don’t know what a bond or an ETF is, a savings account is a good start. Banks lend out money in your savings account to others.
What about borrowing to invest? Is that not good debt? The answer is no. There is no such thing as good debt. Debt is debt is slavery. Debt is a legal obligation to pay, which means you must work in order to repay. If you must work against your will, that sounds like slavery to me. Investments in real estate, shares, and even education can be lucrative, and when they pay off, the debt you incurred may in theory be worth it. But these investments are not guaranteed. You are taking a risk. The more you borrow, the bigger the risk is. The bank, who lends you money, takes no risk. The bank collects interest repayment from you regardless, and if you default, they take your house or have some other legal means to collect the debt. All the risk is on you. You might win, you might lose, but the bank always wins.
If you absolutely must borrow (for example, you need a car to drive to work), be careful you don’t get carried away. Make sure the debt is as small as possible and repay it back as quickly as possible. Sacrifice everything (vacation, etc) to get out of debt quickly because your freedom from slavery is at stake.
I Live Off Dividends 