Almost all financial advisors recommend that you invest your money in the stock and bond market, usually through mutual funds, although it could be through wrap accounts, managed accounts, or in individual stocks and bonds.
All of these options are subject to the schizophrenic, emotional roller coaster of the markets. As you know well, the value of your accounts can go down because of something that has nothing to do with the value of the underlying company. And these negative years hurt far more than the positive years help. So no one does as well as the average return of the investment they are investing in.
Why expose yourself to these risks?
We here at Kingdom Calling are hesitant to take on any of this market risk. Many of our clients pulled money out of the stock market before the serious crash began as they were being educated in stewardship. Some have just recently started looking at the market, but with new eyes. They are studying stocks that will pay them to own them, so that if they have to suffer their stocks losing value, at least they are receiving a nice income for doing so.
Others would prefer to be totally outside the market so that they don’t have to worry about these fluctuations. There is no reason for you to own a stock or bond to build incredible wealth. In fact, wealth is almost never created in the markets (unless you’re a financial institution making money because others are paying you to manage their money in the market).
I’m now wondering if any wealth has really been created in the market. I read last week that Warren Buffett’s Berkshire Hathaway is today worth only the amount that has been invested into it. I have not researched this, but it blows me away. The greatest investor of all time has the same amount of money after decades on investing in the market that has been invested with him?!? There is a better way!
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