Among the many personal finance and dividend blogs that exist, the common theme of ‘financial discipline’ seems to dominate our writings. We often talk about having financial discipline when it comes to our savings rate. We speak of living below our means and not chasing after material objects. We speak of financial discipline with our investment style by focusing on sustainable dividend growth from high quality companies as opposed to chasing high yield “fantasies.” We speak of financial diversity as well, whether spreading our investments over a few dozen stocks or by including real estate or peer to peer lending among our income mixes. All these seemingly common sense financial themes are nothing new though.
I wanted to share some interesting financial commentary I came across while reading Ecclesiastes. Just for the record, I do believe in God but I would not consider myself religious by any means nor do I intend to make this blog post a proselytizing session. I just found some very interesting writings from one of the 24 books of the Tanakh or Hebrew Bible that I wanted to share. It’s amazing to me that writings from the Old Testament, from a point in time that’s literally thousands of years old, can be relevant today. With that being said, let’s review some of the passages that have obvious financial themes, that I found which everyone can relate to, even today.
First, a little background on Ecclesiastes. It is widely believed that the book was written by the son of King David which implies it was written by Solomon sometime during the 3rd century B.C. It’s basically a narrative with a central theme declaring that everything in life is futile. We basically are born, live our lives and eventually die. Mighty kings and the poor all have the same fate. The basic premise of Ecclesiastes highlights the fact that all actions of man are temporary and fleeting. For an Old Testament writing I found it very interesting as a read and could relate and agree with many of the points mentioned. Of course, this is a financial blog so I’ll focus on the financial advice from this book.
I just love this first quote as it relates so perfectly to our investment styles of not trying to time the market nor listen wholeheartedly to all the talking heads and market prognosticators.
“Since no one knows the future, who can tell someone else what is to come? As no one has power over the wind to contain it, so[a] no one has power over the time of their death.”
How true these words are. Everyone claims to know when a market hits a top or creates a bottom. No one predicted the collapse of oil in the summer of 2014. No one! It’s all a random guess. I can say the DOW will be at 25,000 in the next month or next year just as easily as I can predict DOW 10,000 in the next month or year. It’s all conversation and not fact. It just doesn’t matter what anyone says about the future as no one knows anything.
Similarly, “Whoever watches the wind will not plant; whoever looks at the clouds will not reap.” Is the Old Testament trying to tell me not to time the market? I think so. Sitting on the sidelines “watching the wind” and not taking any action seeking the “perfect time” to invest will never reap any rewards. Sometimes you just have to jump on in and spend time in the market instead of timing the market. Sure, stock/portfolio values may rise and fall but you’ll be reaping dividends all the while from quality companies.
How about diversifying your investments? We even have advice in that department. “Sow your seed in the morning, and at evening let your hands not be idle, for you do not know which will succeed, whether this or that, or whether both will do equally well.” I couldn’t have said that better myself. We should all occupy our time with multiple sources of income, whether from a job, dividends, real estate or some other venture for we truly do not know which will succeed. Of course, if you prefer more direct advice from the Old Testament, “Invest in seven ventures, yes, in eight; you do not know what disaster may come upon the land.”
Being a dividend growth investor we often talk about the long journey we are on towards financial independence and that creating our dividend snowball takes time and is rarely achieved in a hasty manner. In that respect we are reminded from Ecclesiastes that, “The race is not to the swift.” How true. Wealth creation and passive income generation takes time. We often compare our journey to a marathon and not a sprint.
Of course, in Ecclesiastes I have found some references about how to live your life and enjoy your time while you are still young. Among the various financial blogs I read, many discuss the goal of achieving financial independence early in life, for who wants to retire with an old, less functional physical body? We’d like to enjoy our freedom with a capable body rather than incapacitated. The following should ring true to many who are new to the FI game.
“You who are young, be happy while you are young, and let your heart give you joy in the days of your youth. Follow the ways of your heart and whatever your eyes see.”
We are also reminded not to love money.
“Whoever loves money never has enough; whoever loves wealth is never satisfied with their income.” Financial independence is never about accumulating money and assets, rather it’s about being satisfied with what you have and finding happiness with the intangible attributes that money can offer such as time spent the way you see fit rather than on a new car or newest phone. For it is, “Better one handful with tranquillity than two handfuls with toil.” Indeed.
Finally, I’d like to leave you with a very self-explanatory quote from Ecclesiastes, “Fools are put in many high positions.” Be careful who you listen to. ‘Nuff said.
It’s fascinating that a written word from thousands of years ago can be so incredibly relevant today. What do you think about the financial advice offered from the Old Testament? Please let me know below.