Investing in a Secular World: Discovering Biblical Truths About Money

By Gerald House DBA

What would your financial life look like if you managed your money and investments according to God's playbook--the Bible?

We can spend most of our life trying to manage our finances from a secular viewpoint. However, this type of money survival will inevitably lead to frustrations and disappointments. Alternatively, we can follow the financial plan God has already blessed us with found in the Bible. Step out in faith and let Dr. Gerald House guide you through the maze of secular financial advice that often conflicts with God's plan, to a biblical awareness that will provide a solid financial foundation for you and your family. Embrace God's instructions on money and investing to live a life filled with contentment and gratification.

For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it--lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, "This man began to build and was not able to finish"? (Luke 14:28-30)

God wants us to prosper and live a life without struggling to meet our financial obligations.

He who did not spare His own Son, but delivered Him up for us all, how shall He not with Him also freely give us all things? (Romans 8:32 NKJV)

• Language: English
• Publisher: Christian Faith Publishing, Inc.
• Release date: Aug 30, 2022
• ISBN: 9781685705992

Book preview

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Investing in a Secular World

Discovering Biblical Truths About Money

Gerald House DBA

ISBN 978-1-68570-598-5 (paperback)

ISBN 979-8-88685-000-0 (hardcover)

ISBN 978-1-68570-599-2 (digital)

Copyright © 2022 by Gerald House DBA

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods without the prior written permission of the publisher. For permission requests, solicit the publisher via the address below.

Christian Faith Publishing

832 Park Avenue

Meadville, PA 16335

www.christianfaithpublishing.com

Printed in the United States of America

Table of Contents

Disclosures

Preface

A Life of Purpose

Acknowledgments

Introduction

Money Management

Financial

Retirement

Investing

Background

The Financial Service Industry

Investment Theories and Strategies

Alternative Investments

Planning and Investing

Developing a Financial Plan

The Four Seasons of Investing

Responsible Investing

Wrapping Up

Putting It All Together

The Parable of the Talents (Book Cover)

About the Author

Disclosures

Gerald House DBA is the founder of Lifestyle Financial Services (LLC) that is located in Augusta, GA.

Some of the techniques and information discussed in this book should not be misconstrued as personal financial advice from Gerald House DBA. The readers understands that each individual situation is unique and many of the concepts discussed in this book may not be relevant to their personal situation.

The information in this book also does not constitute an offer to sell securities or a solicitation of an offer to buy securities. This book is for educational purposes only. The information discussed in this book may not be relevant in the current financial market. None of the information provided is a substitution for competent financial, legal, or tax advice. This book is sold with the understanding that neither the author, publisher, Lifestyle Financial Services, LLC, or Herrington Financial Services Inc. are engaged in providing legal, tax, and accounting advice. The author, publisher, Lifestyle Financial Services, LLC, and Herrington Financial Services, Inc. disclaim any liability, loss, or risks associated with the use of the information published herein.

Parts of this book are excerpts taken from the author's doctoral study, Financial Advisory Firms Strategies for Diversifying and Growing Clients Portfolios copyrighted 2020 and previously published articles. The information previously used with permission of the author.

To God, whose mercy, grace, and love have seen me through some troubling times and allowed me to overcome numerous obstacles to become a better person. I also dedicate this study to my wife of forty-three years. She is not only the love of my life but my best friend.

Preface

A Life of Purpose

Purpose allows us to expand our simple abilities and perform at the highest level of human production. We may have several purposes throughout our lifetime, depending on the season of life we're in. Nonetheless, living a life of purpose will propel us to greater rewards, which will ultimately allow us to find a measure of happiness. This contentment doesn't mean settling for mediocrity. On the contrary, it means understanding and appreciating the blessings that God provides us with each day. We only need to seek the wisdom of the richest man in history, King Solomon, to uncover true happiness. Proverbs and Ecclesiastes in the Bible will provide us with some answers.

There is one who makes himself rich, yet has nothing;

And one who makes himself poor, yet has great riches. (Proverbs 13:7 NKJV)

He who loves silver will not be satisfied with silver; Nor he who loves abundance, with increase. This also is vanity. (Ecclesiastes 5:10 NKJV)

In Ecclesiastes, King Solomon laments on trying many man-made experiences searching for happiness, only to find his quest in vain. Finally, he concludes that happiness is only found in fearing the Lord. We translate the term fear as in awe.

Though a sinner does evil a hundred times, and his days are prolonged, yet I surely know that it will be well with those who fear God, who fear before Him. (Ecclesiastes 8:12 NKJV)

How Strong Is Your Why?

Typically, our goals and aspirations lead us to effect changes in our lives. Without a strong why, these goals and aspirations are often relegated to just another unsuccessful attempt to dream beyond our capabilities or reach for an unsuitable state for which we are not matched. Your why is the ignition within your heart that develops the passion for discovering something larger than yourself. It's not enough to want or desire something. You must have a strong why, overcoming all obstacles and creating a steadfast focus on the endgame.

Your why cannot just be for monetary gain. Money has always been a very weak stimulus. Once you identify your why, all excuses are eliminated, and your goals become plausible. "When your why is strong enough, you will figure out how" (Bill Walsh). By discovering a strong why, we build a powerful, unstoppable force capable of elevating us to heights well beyond traditional logic. At this stage, we realize God blessed us with unique talents—not for individual gain but for serving our fellow man.

As each one has received a gift, minister it to one another, as good stewards of the manifold grace of God. (1 Peter 4:10 NKJV)

My Why

When I became a financial advisor, I hoped to help people navigate the complex financial system to become comfortable in their retirement. I spent four months studying and preparing for all the industry exams. I got my series 7 license (general securities representative exam—stockbroker), series 65 license (uniform investment adviser law exam), series 63 license (uniform securities agent state law exam), and life and health insurance licenses. I am also licensed as a real estate broker. I quickly became dismayed when I started working in my chosen profession. Not only was this new career just another sales job, but they also designed it to support the wealthy because they are usually the only clients who have money to invest. I gained some level of satisfaction as a financial advisor. However, I was not reaching enough people.

I concluded that to reach my target audience, I needed to become an educator. I started a side hustle, consulting and coaching individuals and small business owners. In my spare time, I also spent four years learning how I could reach the masses and not just build a career. My purpose—my why—was screaming for a broader audience. I created a blog site dedicated to retail clients (not just the wealthy), espousing truths about money and investing. Unfortunately, my blog site came to a halt before I could publish my first article. The compliance person at my broker-dealer did not share my passion for educating retail clients about the truths about investing and exposing the propaganda disseminated by the financial service industry. My why was officially in prison. Therefore, I fired my broker-dealer and gave up my series 7 and 63 licenses. I kept my advisory series 65 license so I could still give investment advice. This move provided me with more flexibility on how I ran my business without the overregulated government compliance oversight.

My why led me to realize that writing was the most efficient method to spread my passion for educating the multitudes. At the time, I felt like my writing skills were mediocre. I wanted to become a better writer to gain readers' interest in following my blog posts, articles, and published books. I couldn't accept mediocrity in my life. My why would accept nothing but the best. I had to obtain a higher degree—one that only three percent of the world's population acquire. I needed to complete my doctorate. Completing my doctorate would ensure the professional standards of writing and research skills necessary to become a better writer.

On June 12, 2020, I completed my doctoral journey.

While researching for my dissertation, I had an epiphany. Although there are numerous research articles, books, and blogs on investing and managing your money, most only conform to worldly views. The world has made a mess of our money! Additionally, I believe the financial service industry has made a simple process complicated to confuse people. I also discovered how God laid out a simple process for becoming financially literate in the Bible. Therefore, why complicate the situation by conforming to the world's view? I spent another eighteen months studying the Bible and writing this book to educate people on the Christian process for investing and managing our money and how it contrasts the world's point of view. Join me as we begin this process.

Acknowledgments

First, I want to thank an old friend and mentor in my life, the late Charles Danforth Saggus, PhD. Dr. Saggus was the first person who told me I had a talent for writing, and I should pursue this endeavor. I also want to thank all the Christian financial advisors who work tirelessly to minister to their clients by leading them to God's investment program found in His great playbook, the Holy Bible .

Introduction

As of 2013, only 48 percent of households in the United States had retirement assets set aside with a median value of $109,000 (US Accountability Office 2015). Given the negative interest rates on bonds and stock investments, producing a net return after expenses of 2–4 percent, retirees can expect a shortfall in the assets needed for retirement. (Blanchett, Finke, and Pfau 2017). Therefore, the average baby boomer retiring today is likely to run out of money well before their life expectancy. Our planning process must change to reverse this underperformance of our investment portfolio.

The financial service industry has done a poor job preparing individuals for a sustainable economic life once they leave the workforce. They've also done a poor job of preparing individuals to live comfortably before retirement. Some prime contributors to poor planning are allowing industry traditions and myths to prevail instead of relying on academic research and facts to validate planning techniques. The typical methods of training perpetuating the financial industry influence advisors to recommend inferior products with high fees. Frequently, these products are not the best fit for their clients.

We must not forget the many traps awaiting the unsuspecting investor, such as stock market volatility, inflation, taxes, economic uncertainty, life events, health care costs, high medical prescriptions, longevity risks, market risks, sequence risks, and now pandemic events. Regrettably, most financial plans prepared by advisors only address the accumulation of assets during the preretirement years, as though retirement itself is the climax of the story. What about the distribution phase of assets in later years?

Finally, we must address asset allocation. Asset allocation gives many financial advisors the most angst. Typical investment portfolios are created using rules of thumb like the 60-40 asset allocation, popularized by Jack Bogle, the founder of Vanguard, where 60 percent is invested in stocks and 40 percent in bonds. Another classic example is to take your age and subtract it from 100. The difference is how much an investor should allocate to stocks while your age is your bond allocation. This method allows older investors to have a more significant allocation to bonds to account for their risk aversion in later years. However, as of September 7, 2021, a ten-year treasury bond only pays 1.37 percent. This rate will not even keep up with inflation, much less contribute to an investment portfolio in any substantial manner.

Graph 1

Current Savings Rates

It is time we dismiss old rules of thumb. Incidentally, to place labels on asset allocation, like strategic asset allocation, tactical asset allocation, or dynamic asset allocation, only serves as fodder for marketing if your advisor is not actively managing your investments. However, by understanding the basics of developed theories, such as modern portfolio theory, efficient market theory, and behavioral finance theory, we can come closer to understanding the basics of investment planning and asset allocation.

You have to learn the rules of the game. And then you have to play better than anyone else. (Albert Einstein)

A proliferation of propaganda within the financial services industry and the media pundits has masked the correct pathway to secure your financial future. Everywhere you turn, you find another financial advisor, business expert, or real estate guru who purports to have your best interest in mind. However, it is up to you to advance your knowledge by investigating and practicing sound and proven planning techniques. The first rule of financial planning and investing: never relinquish your financial responsibilities to another person even if they claim to be a fiduciary.

Always know how your money will serve you!

You will need to hire specialists to round out your financial team. Specialists such as attorneys,