Last week, we posted thoughts on the necessity of accepting risk into life. God wants our heart, our mind, and our life open to others. This openness places us in a position where our feelings can be hurt, our emotions can erupt, and our lives can seem crushed. Opening ourselves also allows God to use the talents he has given us to bless others. It allows the talents God has given to others to become a part of our life.

In the same way, accepting risk into our financial life normally proves beneficial. Refusing to accept financial risk limits the return our savings can earn and prevents us from enjoying the growth of our capital. Risk allows us to participate in the ownership of some of the greatest companies and industries of the world.

The one warning everyone should heed is that risk must be balanced and controlled. Throwing caution to the wind with our savings and investments tends to a) expose us to the risk of needing to withdraw funds at the worst time, b) decrease our average rate of return, and c) introduce unnecessary emotional stress into life. I found a recent headline amusing, “A Proven Indicator for 7.3% Dividends, 42% Gains.” I wanted to know where I could sign up. Where were you in March of 2020 when some investment values fell during the COVID scare?”

The writer admitted, “Of course, no signal is right 100% of the time.” This demonstrates why we should never put all our eggs into any one basket! We have to avoid hearing our retirement account go “splat” while we accept risk in order to achieve growth over time.

Here are some time-worn, proven steps that will help cushion the inevitable stumbles and falls while we accept financial risk in order to build our nest egg.

  • Begin with generosity! God is a generous God. Consider the beauty of creation. Identity the talents that you have and remember we did not create them! Enumerate the number of friends we have in life. Just as God is generous, we should build the virtue of generosity into life. Give money away regularly.
  • Spend less than you make after giving money away. The proper use of debt (buying an affordable house etc.) is fine, but credit card purchases normally mean we are spending money we cannot afford.
  • Build an emergency fund of CASH. Begin by saving $1000 in an account that is not there to be spent on fun. Then build upon that by saving 3 months of normal household expenses. Once that is accomplished, add to that fund as possible.
  • Build a strategic retirement nest egg. Use the 401(k), 403(b), or pension plan at your employer. Begin by creating a monthly income for life that will be there for you that has no market risk. Add to that by choosing well managed, cost efficient financial managers. Commit as much money as possible to their management from every paycheck. There is a long list of money managers and mutual funds available. The Christian Churches Pension Plan does not make specific recommendations. Seek good advice from people you trust.
  • Set aside money in order to have fun…affordably. It is virtually impossible to save endlessly and not enjoy life. Find affordable ways to create memories with your family. These are treasures no one can take away.
  • Enact a plan to eliminate ALL debt from your life, even your home mortgage. Owing money to anyone creates a strain on the paycheck. Owing money to credit cards adds financial stress during tough times…and 2020 has been one tough year. Every debt eliminated reduces the financial risk we face.

These are but six of many worthwhile suggestions that may be noted. Perhaps the most important has yet to be mentioned. Today is the day to begin! Urgency must be included in any plan for tomorrow. If you are 25 years old and believe waiting until 35 to begin saving makes sense; think again. Waiting those ten years to begin saving the same amount of dollars may well reduce your retirement income by one-half. If you are 35 now and are thinking about waiting until 40 to begin; those 5 years could reduce your retirement income by one-fourth.

Here is to everyone living a full life, a life risking much in order to be the life God desires and promises. Here is to a life spent pursuing God and the passions he impresses upon your heart.