By David Tulis
The other day a business owner and I were discussing his need for capital. He is in arrears in his taxes, cannot boost sales until he improves his inventory, cannot get a line of credit because his operation lacks equity, is barely getting by to support his family, and needs financial and business advice from a managerial sort of person.
I suggested that even if he could get a bank to create digital “dollars” by way of its inflationary fractional reserve, he would still be viewed as a money machine. Would it not be better to have a caring local investor who wouldn’t just look at him mechanically, but be his co-laborer and risk taker and friend?
[This essay appeared originally in November 2012. — DJT]
A local investor would be willing to capitalize his business with F$150,000 to seek a reasonable return. A reasonable return would be better than anything a CD would offer, or a S&P 500 stock. It would be perhaps 15 percent or 20 percent a year once the business could afford to pay a dividend.
Main ideas of investing in your neighbor’s business
Professionals in the investment field — advisers and the like — are hard-nosed and objective, and try to give a client the best return. We’ve explored the difference between gamblers and producers, and would suggest that much investing today is simply a form of gambling. Informing this view is the number. You evaluate a company (or hire someone to do it for you) and you invest based on its chances of giving a dividend or profit. The bigger and more solid the number appears, the more approving is the investor.
Christianity, as we have noted elsewhere, is all about innovation, risk, service and creation of capital. Christianity creates circumstances favorable to capital formation. But it also curbs and softens the profit motive with its commandments about charity and looking out for the other. Today, given a financial disaster in the making in the national economy, preservation of capital is paramount. Profit takes a back seat. Still, pointers from St. Paul should temper our desire for profit.
➤ Loads of profit from S&P 500, or loving one another?
The love and care God’s people are to have among each other is beautifully summarized by Paul in 1 Cor. 13:1-8, starting at verse 3: “And though I bestow all my goods to feed the poor, and though I give my body to be burned, but have not love, it profits me nothing. Love suffers long and is kind; love does not envy; love does not parade itself, is not puffed up; does not behave rudely, does not seek its own *** .” This argument is for charity. Even in our investment decisions, we are expected to temper self-interest and consider our neighbor if we can invest in him. An investment is not entirely about our search for profit.
➤ Sowing vs. reaping
Paul discusses a gift to be sent to the church in Jerusalem. He appeals to the sense of charity among Corinthians. “But this I say: He who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully. So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver” (2 Cor. 9:6,7). Nothing here says patronize a local grocer over Bi-Lo. What’s in view here is God’s calling on members of the church to treat their personal property lightly, and not count pennies.
➤ Working with your own hands
“[W]e urge you *** that you also aspire to lead a quiet life, to mind your own business, and to work with your own hands, as we commanded you, that you may walk properly toward those who are outside, and that you may lack nothing” (I Thess 4:9-12).
➤ If every man works, local economy booms
Three thousand Chattanooga recipients of federal jobless benefits face their loss in the new year. So centralized has the U.S. economy become that few people, used to employment (service), are able to be their own masters.
The apostle, a missionary, sometimes worked to pay his own way. “ *** [W]e were not disorderly among you; nor did we eat anyone’s bread free of charge, but worked with labor and toiled night and day, that we might not be a burden to any of you, not because we do not have authority, but to make ourselves an example *** . For even when we were with you, we commanded you this: If anyone will not work, neither shall he eat. For we hear that there are some who walk among you in a disorderly manner, not working at all, but are busybodies” (II Thess. 3:7-11).
➤ Desires for financial gain? Mild
The moderation required of elders and deacons hints at generosity of spirit and a lack of greed that would make a man content to be patient with the profitability of his local investment. “A bishop then must be blameless, the husband of one wife, temperate, sober-minded, of good behavior, hospitable *** not greedy for money, but gentle, not quarrelsome, not covetous.” II Thess 3:2, 3). A deacon cannot be “greedy for money.” See also the epistle to Titus and its description of a bishop or elder, that he be “not greedy for money, but hospitable, a lover of what is good, sober-minded, just, holy, self-controlled” (Titus 1:7b, 8).
➤ Contented man will shun get rich-quick promise from Wall Street
The requirement of Christian contentment MIGHT keep a man closer to local economy than national. What do you think? “Now godliness with contentment is great gain. For we brought nothing into this world, and it is certain we can carry nothing out. And having food and clothing, with these things we shall be content. But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition” (I Tim 6:6-9).
The folly of continual consumption seems to spring from the same aquisitive sense that drives a man to seek riches when perhaps he should be seeking to serve.
➤ Coveting — avoid it
What sort of man do you NOT want to become? Paul gives five verses to describing the sensuous and selfish man. “For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows” (I Tim 6:10). “For men will be lovers of themselves, lovers of money, boasters, proud, *** unloving, unforgiving, *** lovers of pleasure rather than lovers of God, having a form of godliness but denying its power” (2 Tim 3:2-5).
➤ Live circumspectly; riches aren’t everything
Right and modest living is described in the book of Titus. “For the grace of God that brings salvation has appeared to all men, teaching us that, denying ungodliness and worldly lusts, we should live soberly, righteously and godly in the present age *** “ (Titus 2:11,12). God’s people are urged to be subject to rulers and authorities and “to be ready for every good work, *** to be peaceable, gentle, showing all humility to all men” (Titus 3:1,2).
— David Tulis hosts a talk show weekdays in Chattanooga from 9 to 11 a.m. on 1240 AM Hot News Talk Radio, covering local economy and free markets in Chattanooga and beyond. Support this site and his radio station on the real airwaves in Chattanooga, on your smartphone via the TuneIn radio app or at Hotnewstalkradio.com. You back David by patronizing his advertisers with specific reference to him. Even better, encourage independent media by having David run commercials for your business. Also, “buy me a coffee at the tip jar.”