YEARS OF PLENTY - YEARS OF FAMINE?
YEARS OF PLENTY - YEARS OF FAMINE
By: Mark Biller
Joseph has always been one of my favorite leaders in the Bible. His roller-coaster ride from favorite son to slave to master of the house to prisoner to Viceroy of Egypt is amazing and inspiring. The culmination of his story in Genesis 50:20 offers hope to anyone going through difficult times: "You intended to harm me, but God intended it for good." What an example of God at work in the affairs of men to accomplish His ultimate purposes!
Lately I have pondered Joseph's story from a different perspective - lessons it holds from a financial standpoint. The turning point of his experience in Egypt occurred when he interpreted two dreams for Pharaoh. He realized Egypt would soon experience seven years of abundance, followed by seven years of famine. Joseph oversaw preparations during the years of plenty, so the people could survive the years of famine.
I am not making a prediction, but have wondered if nations that have experienced great prosperity could soon confront a similar "years of plenty, years of famine" scenario - for whatever reason. If that's even remotely possible, we would be wise to consider the personal implications of Joseph's story and start preparing now, during years of continued plenty, for any difficult years ahead.
For more than two decades, many nations - particularly in the West - have experienced extraordinary economic prosperity. For example, since 1982, the U.S. has endured only two short, mild recessions of nine months each. How unusual is that? Consider that from 1900 to 1982 there were 19 recessions, with a new one coming an average of just 3.5 years after each concluded! The strong economic growth, the huge surges in the financial markets and home values increased personal and national wealth. That incredible degree of prosperity was very unusual, as we have seen recently, when the bubble burst.
Ideally, we would have taken advantage of such financial abundance to prepare, personally and nationally, for future financial storms. Sadly, the opposite has largely true. Consider a few telling statistics:
In 1982, payments to cover household debt required a little more than $1 of every $10 of after-tax income. By 2005, that proportion had increased to almost $1 of every $7.
Personal bankruptcies soared 31.6% in 2005. In that year alone, 1 in 53 U.S. households filed for bankruptcy.
The national savings rate fell to -0.5% in 2005, the first time consumers have spent more than their after-tax income since 1932-1933, when the Great Depression was raging.
The news is not any better at national levels, with anticipated shortfalls in various social services being well-documented. Yet no serious efforts are underway to fix these problems that must be fixed.
The Bible is clear in its warnings about debt. Looking at the financial statistics and trends, it's easy to see the potential for an economic upheaval sometime in the future. Thankfully, God has given us principles to show how to prepare during the remaining years of plenty: Diligently work to get debt-free, fund an emergency savings reserve, invest for the future, and diversify broadly.
Joseph wisely saved 20% of the harvested grain, and was able to save not only Egypt during the famine, but the surrounding nations as well. That should be our goal - to be faithful stewards now while times are good, in preparation for any future hard times. By demonstrating wise and faithful stewardship in this way, we may find ourselves being used, like Joseph, as instruments of God's deliverance in time of distress. "Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest" (Proverbs 6:6-8). Are you as wise as the ant?
Mark Biller, the executive editor of the Sound Mind Investing financial planning newsletter and website. You can read more about Sound Mind Investing and its investment principles at
www.soundmindinvesting.com.