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Are Bitcoins the Next Great Investment?

Bitcoins graphic Recently, we’ve received calls on our MoneyWise radio program wanting to know about Bitcoins and asking our advice about investing in them.

 

Bitcoins is a payment system that was invented in 2009 by Satoshi Nakamoto. Essentially, it is digital currency that operated outside of governments and the traditional financial system. The US Treasury calls it a “virtual currency.”

 

From my point of view, it’s too risky to invest in them. And some of those connected with this payment system have been involved in questionable activities. The founder was sent to jail, and the Bitcoin Exchange is bankrupt. And if that’s not enough, the founder of the largest of the Bitcoin exchanges was arrested just recently. I don’t know the details, but it may have something to do with the $400 million in Bitcoins that are missing from the company’s accounts.

 

Investing in Bitcoins is still confusing to me which also violates this important investing rule of thumb: If you don’t understand a potential investment well enough to explain it simply and clearly to your spouse in a way that he or she understands it – don’t do it!

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BREAKING NEWS! Stock Market Plunges 1,100 Points This Morning . . .

The stock market opened this morning with the Dow dropping as many as 1,100 points. To put this into perspective, the Dow has never closed down more than 800 points in a day!

 

I briefly turned on a financial TV channel to see what the financial gurus were saying. They were obviously struggling to explain this huge loss. Unlike their usual self-assuredness, they were unable to clearly articulate why it was happening and what was going to happen.

 

As we’ve been sharing with our MoneyWise listeners for the past couples of years, when any market has six straight years of amazing growth in value and is at or near record highs – we need to be cautious! So, we’ve been recommending no more than 25% of an individual’s investments in the stock market. And we’ve encouraged investors to do their homework and invest in solid companies that have little or no debt and pay a dividend.

 

The two passages that give us the clearest guidance when it comes to investing are Proverbs 21:5, “Steady plodding brings prosperity; hasty speculation brings poverty.” In other words, be a consistent investor even if you can afford just a few dollars a month.

 

The other passage is Ecclesiastes 11:2, “Divide your portion to seven or even eight, for you do not know what misfortune may occur upon the earth.” In other words, it’s wise to diversify and not to put all of our investment dollars into one basket.

 

One final thought. When we face major financial challenges that are global and beyond our control, remember what 1 Timothy 6:17 tell us: “. . . don’t fix your hope on the uncertainty of riches, but on God who richly supplies us with all things to enjoy.” All riches are uncertain. Stocks, real estate, bonds, and gold go up and down in value. There is only one thing on the planet that is certain and that is the Lord Himself. He told us in Hebrews 13:5, “I will never desert you, nor will I ever forsake you.”

Stock Market: recession

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The Heart Behind Giving and Being Generous

We’re almost one month into the new year, and by now you’ve had time to update your checkbook, hang the new wall calendar, begin your new one year study bible and reconsider most of you new year’s resolutions ☺ Let’s start by taking a look at what the Bible says about saving and giving.

In Proverbs 21:20, wise King Solomon wrote, “The wise man saves for the future; the foolish man spends whatever he gets.”  Saving is simply not spending everything today, so you’ll have something to spend in the future.  It’s legitimate to save and invest for things like taking care of your family, providing for retirement and investing for your children’s education.

But we need to balance saving and investing with being generous because if we just focus on piling up our investments that’s where our heart is going to be drawn. Luke 12:34 says, “For where your treasure is there is your heart also.”  The Bible consistently encourages us to keep our heart focused on loving and serving the Lord. So it is incredibly important to balance saving with giving. I’m going to suggest something pretty radical.  I believe we should be giving as much as we contribute to our savings and investments each year to protect our hearts.

Recommended article: Your 10 Most Important Financial Moves for 2014 at www.SoundMindInvesting.com

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Update From Howard 10/10

Dear Friends,

Where do we invest in this economy?: A experienced stock market investor just told me, “When I buy into the stock market, I no longer feel as if I’m making a well researched investment; instead, it’s more like a well researched bet. World economies and the market are just so uncertain and volatile.”  Well, Ecclesiastes 11:2 wisely counsels us to “Divide your portion to 7 or even 8, because you do not know what misfortune will occur upon the earth.” So, please diversify your investments . . .

Long Johns Packed: Bev and I are headed out to Colorado Springs—with 11 inches of snow on the ground—for our second annual Compass Retreat. It will be just a little different weather from the high 80s of Florida. Who chose the Colorado Springs location at this time of year anyhow? Oh, yes, it was me!

Please pray that our team of about 60, from as far away as India and Latin America, will have a terrific time together as we seek to grow closer to Christ and each other and hear His direction for Compass.

Your Money Counts going digital: You can now get the book Your Money Counts for your Kindle, and we’re beginning to work on getting it ipad and Android tablet ready.

Eternity: The death of Apple co-founder, Steve Jobs, once again brought eternity into sharp focus for me. I’m among the many who admire Apple and the amazing advancements in technology that Mr. Jobs orchestrated. This ministry and my family have personally benefited greatly from his  contributions to our electronic lives. But as soon as I learned of his passing, my first thought wasn’t about his accomplishments, it was about his eternal destiny. I can only pray that Steve Jobs knows Jesus Christ as his personal savior. Jesus told us with unmistakable clarity, “I am the way, the truth and the life. No one comes to the Father, except through me.”

May those of us who know Jesus, be grateful that we are children of God. And may we be committed to pray for and tell those who don’t yet know Him about the good news of the Savior.

Warmly in Christ,
Howard

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Howard Dayton is the Founder and CEO, Compass – finances God’s way. For more information about Howard, please click HERE.