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BIBLE-BASED FINANCIAL GUIDANCE, Part 11

by Jerry Dewey

            Part 1   Part 2   Part 3   Part 4   Part 5   Part 6   Part 7   Part 8   Part 9   Part 10   Part 12

          The Bible tells us that Solomon was the wisest and richest man who had ever lived and probably ever since and he just kept getting richer and richer (he personally financed the building of the Temple and he built himself a huge ornate palace; read chapter 8 of 1 Kings).  We are given a glimpse of what Solomon had and was given in 2 Chronicles 9:9-27 (NLT) “Then she [the queen of Sheba] gave the king a gift of 9,000 pounds of gold, great quantities of spices, and precious jewels...(In addition, the crews of Hiram and Solomon brought gold from Ophir, and they also brought red sandalwood and precious jewels.  The king used the sandalwood to make steps for the Temple of the Lord and the royal palace, and to construct lyres and harps for the musicians. Never before had such beautiful things been seen in Judah.)…Each year Solomon received about 25 tons of gold.  This did not include the additional revenue he received from merchants and traders. All the kings of Arabia and the governors of the provinces also brought gold and silver to Solomon.  King Solomon made 200 large shields of hammered gold, each weighing more than 15 pounds.  He also made 300 smaller shields of hammered gold, each weighing more than 7˝ pounds.  The king placed these shields in the Palace of the Forest of Lebanon.  Then the king made a huge throne, decorated with ivory and overlaid with pure gold.  The throne had six steps, with a footstool of gold. There were armrests on both sides of the seat, and the figure of a lion stood on each side of the throne.  There were also twelve other lions, one standing on each end of the six steps. No other throne in all the world could be compared with it!  All of King Solomon’s drinking cups were solid gold, as were all the utensils in the Palace of the Forest of Lebanon. They were not made of silver, for silver was considered worthless in Solomon’s day!  The king had a fleet of trading ships manned by the sailors sent by Hiram.  Once every three years the ships returned, loaded with gold, silver, ivory, apes, and peacocks.  So King Solomon became richer and wiser than any other king on earth.  Kings from every nation came to consult him and to hear the wisdom God had given him.  Year after year everyone who visited brought him gifts of silver and gold, clothing, weapons, spices, horses, and mules.  Solomon had 4,000 stalls for his horses and chariots, and he had 12,000 horses.  He stationed some of them in the chariot cities, and some near him in Jerusalem…The king made silver as plentiful in Jerusalem as stone. And valuable cedar timber was as common as the sycamore-fig trees that grow in the foothills of Judah.”  While in 1 Kings 4:22-28 (Amplified) it says, “Solomon's provision for one day was thirty measures of fine flour, sixty measures of meal (the NLT says, “150 bushels of choice flour and 300 bushels of meal”), Ten fat oxen, twenty pasture-fed cattle, a hundred sheep, besides harts, gazelles, roebucks, and fatted fowl of choice kinds.  For he had dominion over all the region west of the [Euphrates] River, from Tiphsah to Gaza, over all the kings west of the River, and he had peace on all sides around him.  Judah and Israel dwelt safely, every man under his vine and fig tree, from Dan to Beersheba, all of Solomon's days.  Solomon also had 40,000 stalls of horses for his chariots, and 12,000 horsemen [charioteers].  And those officers provided food for King Solomon and for all who came to his table, every man in his month; they let nothing be lacking.  Barley also and straw for the horses and swift steeds they brought to the place where it was needed, each according to his assignment.”

          How did they know this?  Somebody was keeping track of everything Solomon had and received so they could let him know what he had and how much it was worth.  In the business world, they call this a “Balance Sheet” or a “Financial Statement/Report.”  The purpose of a balance sheet is to provide a business with a written report of all their assets and their liabilities; it provides a snapshot of a company's financial condition at a specific, single point in time.  The objective of the balance sheet is to provide information about the financial strength, performance, and changes in financial position of a business; this is usually reflected in the business’ net worth (assets minus liabilities).

          Do you know how much you are worth?  The majority of people would probably respond by saying, “I have no clue; never really thought about it.”  Even though you are not a business, you should seriously consider developing a balance sheet for your family, quarterly at a minimum.  “Why,” you ask.  If you have implemented a savings plan and a debt-reduction plan, don’t you want to see what effect your plans are having on your financial situation/condition?  That is what a balance sheet will do for you.  Because your assets should be increasing and your liabilities should be decreasing, your net worth should be increasing; your balance sheet will show you how well it is growing (the percentage of increase from one quarter to the next).

          The development of a balance sheet is fairly simple.  What you put in it, other than the basics, is a matter of personal preference.  Things/possessions that should be part of your report are: checking and savings accounts, money market accounts, home, land (if you own some), vehicles, furniture (especially if it’s considered “high-end” stuff), clothing (“Sunday-go-to-meeting” or “dress-up” items, not your underwear, socks, and your “work-around-the-yard/house” clothes), high tech electronic equipment (TV, computer, video game system, stereo, etcetera), expensive jewelry, sports/outdoor equipment (ATV, boat, guns, etcetera), savings and investments, savings, municipal, and corporate bonds, certificates of deposit, stocks, mutual funds, IRA, 401K, all loans, and all credit card balances.  These items are arranged under one of two headings, assets or liabilities.

                    Under the heading of assets, you should create sub-headings, such as liquid assets (includes a sub-heading of total liquid assets), household assets and possessions (includes a sub-heading of total house assets), investment assets (includes a sub-heading of total investment assets), and total assets.

                    Under the heading of liabilities, you should create sub-headings, such as current liabilities (includes a sub-heading of total current liabilities), long term liabilities (includes a sub-heading of total long term liabilities), and total liabilities.

                    Finally, you should create a heading called net worth; it is the difference between your total assets and your total liabilities.  A bonus feature to this heading would be to create a sub-heading called gain/loss since previous statement.

          If you were wondering: “what is a liquid asset” or “what is the difference between current and long term liabilities,” here is a very simple explanation of each: liquid assets are readily available pools of cash (for example, your checking account); long term liabilities are normally loans that were amortized for a time period greater than one year (for example, your home mortgage or a car loan are considered long term liabilities); credit cards are considered current liabilities.

          Other things you may include in your report could be, for example, account numbers and address, serial numbers, vehicle identification numbers, and etcetera.  These entries are merely informational; they only provide details or specifics about various items you have placed in the asset or liability area.

          There are things/possessions that don’t need to be part of your report (things like kids’ toys, towels and linens, yard and gardening tools (shovels, rakes, hoes, and such), and general, limited-life household items (lamps, pots and pans, cleaning items, silverware [unless it’s actually silver ware], dishes [unless it’s real expensive china], and glasses [unless they’re expensive crystal]).

          Once you’ve created the “look” of your balance sheet, it should rarely change – the only thing that will change is the dollar amounts for some of the items you list.  Click here to see an example of what your balance sheet might look like.

           In the beginning, your quarterly net worth growth will probably be very minimal (less than one percent) or it could be negative.  Obviously, your goal should be doing the things necessary to cause positive growth, but also know that the trend of the financial market will, at times, have some impact on this.  If your net worth continues to be negative quarter after quarter, look for areas where you can make additional spending cuts so you can concentrate more of “your” resources to paying off debt.  Over a period of time (the length of this time will be determined by how much you were in debt and how aggressive your savings and debt-reduction plans are) you should start seeing positive growth each quarter.  Once your net worth is consistently positive, continue your search for areas where you can make additional spending cuts you so you can concentrate more of “your” resources to giving and saving.  Eventually, you will begin to see significant growth (1-3 percent); there is nothing more encouraging than to see significant growth quarter after quarter, year after year.  This means, you can continually do more and more for the work of God’s kingdom and others and your future.  Praise the Lord!

            If you would like more information, click on the Contact link and send us an email; someone will contact you shortly thereafter.

            Part 1   Part 2   Part 3   Part 4   Part 5   Part 6   Part 7   Part 8   Part 9   Part 10   Part 12

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