Are you familiar with the term, "don't put all of your eggs in one basket?" This advice was given so, if an accident occurs, a ma-jority of eggs would survive and be useable in the future. If you place eggs in several different baskets, it is improbable that most baskets would be affected and thus most of your eggs would re-main intact, valuable, and useable. However, if you place all the eggs in one basket and it is damaged, then all of your eggs will likely be destroyed and lose value.
This concept is based on the diversification principle noted in the bible – give a portion to seven or eight because you do not know what trouble may come upon the land. The father of our faith, Abraham, was rich in cattle, silver, and gold and lots of workers. The parables of the talents and minas show the master diversified by spreading his wealth among of number of workers who were to tend, trade with, and grow the portions entrusted to them. Indeed, the LORD diversifies by giving each person the responsibility and ability to spread the gospel by evangelizing and making disciples of men, women, and children within each arena of our lives.
Every wealth building plan should include a process that spreads assets over a number of different holdings, savings, and investment vehicles. You should also use this principle when seeking advice because there is safety in a variety of counselors to help manage life and resources. Yet, many people foolishly put all their savings and investments in one vehicle under one institution’s control, or worse yet under one person’s control. There have been many stories about people losing their entire life savings when their one vehicle goes bankrupt or the person or institution controlling it embezzles the money and it is not properly insured. Many also lose far more purchasing power than had to be lost when the value of that one investment vehicle drops substantially and they do not have growth from other investments to offset the loss.
Minimize your risk by:
(e) Saving for short-term emergency needs in a couple of government insured accounts (at least $10,000 once you eliminate all non-mortgage debt).
(f) Investing the bulk of your assets for the long-haul (10+ years).
(g) Researching to understand which investment vehicles are worthwhile.
(h) Choosing at least a few to invest in that have positive long-term historical track records (mutual funds, etc.).
Diversification does not stop investments from being affected by economic downturns and it is likely you will not get the annual return of the hottest stock. However, this type limits the size of asset downswings so they won’t be anywhere near those for people who had all of their money in the many risky investments that do not do well each year. It also allows you to obtain far greater long-term growth than those who put all their investment money in low risk fixed-income vehicles. In addition, it definitely stops the ability of one person to Madoff with all your money.
Please pray for this ministry, email me with any questions, and contact me to speak at your business or ministry conference or workshop. May the LORD bless you richly as you follow His plan!
Proverbs 11:14, Ecclesiastes 11:2, Matthew 25:14, Luke 19:13
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https://www.amazon.com/s?k=Karen+Parlor&i=stripbooks&ref=nb_sb_noss
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