INVESTING FOR THE FUTURE


About the Author

Larry Burkett, the author of the book, is the founder and president of Christian Financial Concepts, a non-profit organisation that teaches by Biblical principles of finance and trains others to counsel and educate, using the principles above. Burkett holds degrees in marketing and finance and has written more than 50 books among which are Financial Parenting and The Complete Financial Guide for Young Couples.

Book Synopsis

In our fast-paced ever-changing climate, even classics need updating, and that is precisely what Burkett has done in the book. According to the author, investing is anything but an exact science, as anyone who has ever lost money on a “sure thing” can testify. There are fundamental rules that apply to investing, just as there are basic rules of physics. For instance, the law of gravity says that an object will be drawn towards another object of greater mass. Investing laws of risk and return works in the same way; the higher the promised rate of return, the higher the risk of losing your money. Economic upturns and inflationary markets can temporarily make the laws seem capable of defeat, but eventually, the market deflates, and a high return investment plummets to earth gain, along with your hard-earned savings.

Burkett asserts that if you gain but one perspective from the book it will be this: the rules from God’s Word about investing still work. You should apply them, and you will prosper in the long run. Violate them, and you will lose all that you have worked so hard to accumulate. The author states that one area of investment counselling that irritates him the most is to have someone present an investment in glowing terms, only to find out later that the person did not reveal the whole truth. Against this backdrop, the author pledges to be brutally honest.

Book Structure

The book is segmented into 21 chapters.

Chapter 1 is entitled The Economy. There is virtually no way to write a book on investing without first discussing the economy. After all, what is an investment except an idea to make money? If that idea is not much to the economy, it is almost certainly doomed to failure. For instance, an investment of $1000 in the Ford Motor Company in 1912 would have grown to nearly $12 million by 1950. Inflation consumed about half of its buying power during the intervening years, so an investor in Ford was left with a mere $6 Million on which to retire. Not a bad deal. Almost everyone has a theory about where the economy is headed. There is the depression theory, the inflation theory, the deflationary-inflation theory, the inflationary-depression theory, and so on. The one reality is that the economy one stop; non-ever has. The economy periodically slumps into what is commonly called a recession. A recession is neither mystical nor inexplicable. Generally speaking, a recession is caused by consumers reducing the level of spending from what it was previously.

Chapter 2 of the book is entitled Three Important Principles. There are approximately 12 basic principles of investing found in God’s word. The book discusses and amplifies most of them at one time or the other. But the book is not designed to be a Bible study on investing or theological debate on the principles of borrowing and lending. The author informs that without question, the majority of people he has counselled who lost more than they made through investing violated one or more of the three primary principles taught in God’s word. Even if you follow the principles in the Bible, there is no guarantee that all your investments will prosper. Since investing is more of an art than a science, losses are possible as the likes and dislikes of people change. The three essential principles are surety, risk and diversification. The logic behind not signing surety is simple: when you sign for a debt without knowing how or when it might come due, you jeopardise your future. When it is the debt of another person that you do not know when it might come due. On the principles of risk, if you are going to invest, even in a certificate of deposit, you will assume some risk. The general rule is that the greater the potential return, the greater the potential risk. Therefore, corporate bond usually promises a higher percentage than a government bond. Risk is not necessarily bad, but when the risk goes beyond common sense, it is poor stewardship and losses become the norm. In an ever-changing economy, no one can say with certainty what will be a good investment over the next 10 years and what will be a bad one. An investor who had his or her total funds in any one area would have found it difficult to survive during a significant down cycle without a large cash reserve and very little debt. Diversification means more than just splitting your money between stocks and bonds as it involves investing in some assets that are “paper” such as stocks or bonds and some that are real, such as real estate.

Chapters 3 to 10 discuss concepts such as the reason for investment, risk and return, the investment Hall of horrors, the best investments, strategy for investing, critical factors, where to go for advice, and following Solomon’s advice.

Chapter 11 is entitled The Financial Seasons of Life: Ages 20 to 40. Outline some simple financial goals and strategies for the seasons of your life. Apparently, no one will fit into all the seasons at one time. If you’re older than 40, you have passed the first season if you are between 20 and 40, you won’t have reached the next season and so on. But keep reading. Even if you are older than 60, you may not have accomplished the goals you should have, or maybe you will be able to help your children to achieve theirs.

Chapters 12 to 18 examines concepts such as the financial seasons of life: ages 40 to 60, ages 60 and up, evaluation of investments, the five-tier system, evaluation of cash investments, bond investments assessment, assessment of stocks and stocks forms, and investing in real estate.

Chapter 19 is entitled Evaluating Collectables and Precious Metals. Investing in collectables is clearly more of an art than a science. Often, it is a matter of guessing what the other collectors want and finding the good deals before they do. If you can buy the right product at the right price, a profit can be made. But if you guess wrong, you probably made a purchasing rather than an investment. Investing in collectables is not new, and collectable investing is indeed a worldwide market today.

Chapter 20 and 21 examines the concepts of evaluating insurance, social security and estate planning.

Evaluation

The presentation of the book is logical and the language simple. There is also a brilliant combination of different structural types of sentence. To be able to drive home his message well, Burkett makes generous use of by Biblical allusions and reflective illustrations. He also employs graphics to ensure visual reinforcement of understanding on the part of the readers. However, for the purpose of conceptual compactness, Chapters 5 to 7 should have been harmonised; so also, Chapters 11 to 13.

Is your agelong desire to be a productive person through knowledge of investing for your future? Then this masterpiece will significantly help you. It is simply irresistible!

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