Bible Finance

Manage Your Money God's Way

Financial Deception—Bankruptcy Will Solve My Financial Problems

When people get into financial difficulty, many believe that declaring bankruptcy will solve their financial problems. Unfortunately, bankruptcy just treats the symptom. Statistics show that approximately 80 percent of people who go bankrupt, do so again within 10 years. This is generally because the real problem is the violation of God’s financial principles, which often continues even if current debts are eliminated by bankruptcy.


The Bible is clear that it is not God’s will for anyone to go bankrupt. “The wicked borrow and do not repay, but the righteous give generously” (Psalm 37:21). In other words, it is a sin to declare bankruptcy. On the other hand, a righteous person pays what is owed (which is implied) and goes “the extra mile” by giving generously even where there is no financial obligation.


In addition, it is not a good testimony when a Christian declares bankruptcy. Hence, I believe that it is not God’s will for a Christian to go bankrupt. If you are in financial difficulty, I recommend that you learn and implement God’s financial principles in conjunction with a budget. If you do this, God has promised that he will meet your needs (Matthew 6:31–33), but not necessarily your wants and desires.


Since 1982, I have had the privilege of counselling more than 300 Christians who have been in financial difficulty. In those situations where the Christian learned and implemented God’s financial principles, God blessed in unusual ways, and no one declared bankruptcy.


If you have declared bankruptcy already, then may I encourage you in several ways.


1. God loves you, and God will forgive the act of bankruptcy if you confess that sin to the Lord: “If we confess our sins, he is faithful and just and will forgive us our sins and purify us from all unrighteousness” (1 John 1:9).


2. In dependence upon the Holy Spirit and God’s wisdom from his Word, ask God to reveal to you the real cause(s) of your bankruptcy. Even Christians can unknowingly violate God’s financial principles. Or it may be an ungodly attitude or mindset about money that you need to change. It is critical that you study and meditate on God’s Word with respect to finances so that you have “the mind of Christ” (1 Corinthians 2:16) in managing the money that God has entrusted you with. Excellent materials can be obtained from Crown Financial Ministries (


3. Develop and implement a budget to ensure that you are spending less than you are earning on a monthly basis so that you have a surplus for non-monthly and unexpected expenditures. A budget is simply a tool that can be used in a practical way to do short-term and long-term financial planning.


In summary, the deception of this world is that bankruptcy will solve one’s financial problems. Bankruptcy only treats the symptom. Generally, the true cause of the problem is the violation of one or more biblical principles.  I recommend that, in dependence on God, you learn and apply God’s financial principles in conjunction with implementing a budget.




August 18, 2008 Posted by | Financial Deceptions | , , , , , , | Leave a comment

Investing—Ensure that You Understand the Investment

Over the past 28 years, I have had the privilege of working with 300 to 400 businesspeople. In my experience, generally when they invest in something that they understand, and within biblical principles, they earn a profit. However, when they invest in something that they don’t understand, frequently they lose money.


God warns us of this in Proverbs 19:2: “It is not good to have zeal without knowledge, nor to be hasty and miss the way.”


As applied to investing, this proverb warns us that it is not good to be excited about a particular investment without having a thorough knowledge and understanding of it. If you have been asked to commit to an investment without having sufficient time to obtain an understanding of it and to pray about it, then I strongly recommend that you not invest.


Whether you plan to build a house, an investment portfolio, or a retirement fund, God’s Word emphasizes the importance of understanding, wisdom, and knowledge.

By wisdom a house is built, and through understanding it is established; through knowledge its rooms are filled with rare and beautiful treasures. (Proverbs 24:3, 4)

In my view, the level of knowledge that you need to obtain before acquiring a particular investment is to understand the nature of the investment, what has to occur for the investment to be profitable, and what could occur that would make the investment a loser. Historical returns and historical volatility are helpful. However, they provide no guarantee of future returns.


For example, in regard to a mutual fund, you need to understand the objective of the fund, the track record of the fund manager, and have knowledge and understanding of the 10 largest holdings within that fund. Knowledge and understanding of the markets in general as well as the economy, on a “macro basis,” is important as well. Generally speaking, the more you understand about a particular investment and the more experience that you have, the better.


However, remember that on average only about 15 percent of all professional money managers beat the relevant index, notwithstanding their extensive knowledge of the stocks in their portfolio. The truth is, the best investment today depends on what happens in the future. Since no human can consistently predict the direction of any stock or any market (James 4:13–15), it is critical to rely upon God, who is the key source of wisdom and understanding.

The fear of the LORD is the beginning of wisdom; all who follow his precepts have good understanding. (Psalm 111:10)

In other words, as you consider a particular investment and develop your investment strategy, you must “follow God’s precepts,” which requires that you understand and apply God’s investment principles. Clearly, if you do not understand God’s investment principles, you won’t apply them. Secondly, you need to acknowledge that only God knows the future (Isaiah 46:9, 10), and therefore only God knows which investments will do well. Therefore, in prayer, ask God to direct you according to his will.

Trust in the LORD with all your heart, and lean not on your own understanding; in all your ways acknowledge Him, and He shall direct your paths. (Proverbs 3:5, 6 nkjv)

August 8, 2008 Posted by | Investing | , , , , , | Leave a comment