Clearly it’s important to give our kids the best possible start in life- the Bible says that if we don’t provide for our families, we’re no better than infidels or unbelievers. Now keep in mind that this doesn’t mean that you have to have saved hundreds of thousands of dollars so that your child can go to the best universities, have a nice car or stay in an off-campus apartment high-rise with a stunning view. It means that you are doing your best to help your child have a positive introduction to life as an adult. A good start.

Since we discussed the importance of a university (education) fund last time, it’s also important to note that this money should not just be put in an envelope or a traditional savings account, which is common. There’s nothing wrong with savings accounts, but they don’t accrue enough interest to be the best choice long-term. Here are some options that are more suitable for long-term investments with your family’s education funds:

Shares and Stocks

Shares, or stocks, are one of the best options for investing cash when you want to see a bigger long-term return on your investment (ROI), but keep in mind that shares should be chosen with a lot of prayer and wisdom. You’re essentially placing your faith in a particular company, asset or individual when you buy stocks, so be sure that you make a sound investment. Talk to a financial expert about any investment portfolio before you begin, but also invest quite a bit of time in prayer whenever possible.

To remind you about some of the basics of share and stock ownership, remember that when owning shares you are actually owning a a percentage of the company, and stocks are the same thing. Some people say one thing and others say another, but they mean the same thing—ownership of a company’s assets. The more shares/stock you own from a particular company, the greater your stake in that company, and the greater your returns can be if you cash in on a high note later. However, keep in mind that if the investment isn’t sound, you may lose some or all of your investment if the company goes bankrupt or the market crashes.

Commodities

Those a little more familiar with the financial market may also choose to invest in commodities, which are commonly-used items and materials in the world, such as gold, silver, agricultural products (i.e. corn or coffee), water, and so on. It’s crucial to understand value when it comes to these things though, and although they can be an excellent investment, talk to the pros before choosing one. Like shares and stocks, although the potential for earnings is there, the opportunity to lose everything is just as important to understand up front.

Diversification

Most people choose a diversified portfolio, which simply means that they have invested money in different companies, individuals, commodities, and so on. This offers a smaller chance of losing everything, but it can be confusing for beginners. Since you’re talking about your family’s education with this money, be very careful to pay close attention to movement of any kind with each share, stock, or commodity so that you get the maximum ROI in each situation.

Often a good way to outsource your investments, access wider diversification and the skill of professional investors is to use a Managed Fund or a Mutual Fund.  Again, your financial planner / investment adviser can help.

Finally, I’ll state again that prayer is the best investment option in every case. Sometimes decisions have to be made quickly, but open each morning and end each evening in prayer… and every now and again be sure to talk to God about your investments. He’ll guide you in every situation, whether it’s a snap choice to buy or quick decision to sell. Go back to Jeremiah 29:11, which is a favourite for anyone talking about long-term decision making:

“For I know the plans I have for you,” declares the LORD, “plans to prosper you and not to harm you, plans to give you hope and a future.” (NIV)

If you want to know more about investing, check out our new eCourse here.

---