The Most Dangerous Financial Instrument – Proverbs 22
The final message in our Dollars and Sense Sermon Series.
The Most Dangerous Financial Instrument
We make it pretty easy for people to confuse us because we only have our eyes on what we want- the car, the furniture, the bigger house, the new phone… etc.
We’re like the story I heard of Boudreaux. Boudreaux stories are like parables for cajun people, and they’re told best by someone with a deep cajun accent, like someone on the show swamp people.
Boudreaux put a new roof on a guys house and the man said, ok I’m going to pay you with a check. Boudreaux says, what that is? The man said well a check is a piece of paper with an amount of money written on it and when you take it to the bank they’ll give you the money written on the paper.
Boudreaux takes his check to the bank and the banker says, ok, Boudreaux I just need you to endorse the check.
Boudreaux says, what that mean? He says, well you need to sign your name on the back. Bordeaux says I’m not signing my name. Nobody told me nothing about no endorsing. I’ll find me another bank.
So he goes to the next town and goes into the bank and tries to cash the check, the banker says, ok you just need to endorse it.
Boudreaux says, no I’m not endorsing.
This banker knew Boudreaux so he smacked him in the head and said, Boudreaux if you want your money you have to sign.
Boudreaux said, ok… He signed and got his money.
On his way home he stopped at the first bank and said to the banker look here, I got my money! The banker said, I bet you had to sign for it tho didn’t you. Bourdeaux said yeah. Banker said I told you that you would have to sign.
Boudreaux said yeah, but you didn’t explain it me like that other guy did.
Some of us just can’t get it unless someone smacks us around a little bit- I’m going to try to explain really clear just how dangerous debt it.
Nicole and I looked for a used van for about a year. We waited until we were financially ready to make the purchase and then we waited until we had time to actually go and look at vehicles, and then we waited until we saw a van that we thought was a sensible purchase.
When we went to go and purchase the van, the salesman handed us off to the closer who made us wait and then came in to say, I’ve got great news. I’ve got $300 for you. If you go with this bank, they’ll give you $300 cash…
Now, we had already told the salesman that we were financing the van through our credit union because we had negotiated a great APR.
When the salesman said he had $300 for us, I knew something was fishy. I said, what’s the interest rate?
He said, well your payments would only be this…
I said over how many months? He had added a year to the life of the loan…
What’s the interest rate?
oh, well let me look.
The interest rate was higher.
I said, give us a minute please and I made him wait.
I got out my calculator on my phone and did the math to what I expected- they were trying to get an extra $1,130 out of us over the life of the loan.
Few things are as confusing and dangerous to most people when it comes to money as loans are.
Loans are often confusing for the benefit of the lender.
The beginning of the Proverb in 22:7 points to the fact that the rich rule over the poor- Proverbs decries those that use their wealth to take advantage of others, because it happens.
Financial instruments are packages of assets and tools that often represent capital held in cash or in promises of cash to be paid. These instruments are often traded, sold, and even used as collateral for larger financial instruments.
The lender is not only financially motivated because there is greater money to be made in the financing or the interest, but also because there is money to be made in the selling of loan or financial instruments.
The guy who tried to convince me that I should take this other loan wasn’t trying to save me some money and he wasn’t even trying to get that extra $1,130. He was trying to hit his sales projection on loans so that he could show that he had packaged so much money together in financial instruments for the banks that they do business with.
Many people today don’t make so much money on what they sell as they do in the financial instruments they market with what they sell.
Scripture equates debt with bondage.
Bondage is a recurring theme in scripture.
The Israelites were slaves in Egypt. God rescues them and gives them their own land where they will be free.
The Israelites turn from God and end up in bondage once again with the Babylonians.
Jesus comes to set us free from the bondage of our sin.
He says, I give you the truth in Love and the truth will set you free!
Paul would later write about believers who were engaging in sin as people who were willingly entering back into slavery.
When we go into debt, we give up a portion of our freedom.
Now, God doesn’t outlaw debt. It’s clear from scripture that debt is seen as an important financial tool. It can be a wise thing to do.
I would not have been able to buy my house without debt, but it was the right decision to make financially. I’ll be better prepared for retirement because of that decision.
Debt can be a useful financial tool, but it’s a dangerous tool.
You shouldn’t use it unless you know what you’re doing.
You shouldn’t use it unless you have a plan, if you’ve taken the proper precautions, and you’re working hard to get out from under it.
God knew that debt would be a financial tool that would be dangerous so he established a method of keeping the Israelites from being overtaken by debt.
The Old Testament law setup the year of Jubilee for the people.
The year of jubilee came every 7 years and it was to a be a year that all debts were cancelled. Now it seems that the way this worked practically was that if you needed a loan, you would use your land for collateral- which everyone was given land when the Israelites came into the land- and the collateral was not that you gave up your land, but that you would lease it out and that lease of using the property for crops etc.
None of these leases could last longer than 7 years. It was like a forced reset- it didn’t redistribute wealth, but it acted as a stop gap keeping people from plunging themselves deep into debt.
Our culture will absolutely allow you to plunge yourself deep into debt. The payday loan places that pop up in low income areas are absolute predators.
If debt is a dangerous financial tool, don’t enter into it lightly.
Do not trade your liberty for luxury.
The idea of losing liberty for a loan would have seemed more clear in this era when it was common for a person to be sold into servitude to pay off their debts in forced labor.
It’s less of close connection in our day and age, but the truth is still applicable because while you may not be forced to work on a farm, you will find yourself totally stuck attempting to pay off what you couldn’t afford in the first place and you certainly can’t afford with the compounding interest and late penalties.
Beyond that, psychologically and physiologically there’s a difference between working hard because we are earning something and because we owe something- it’s like the difference between going for a run and running for your life.
It’s the difference between hiking a trail and being forced to march.
Researcher Monika Fleshner of the University of Colorado conducted an experiment with lab animals where one group had an exercise wheel they could run on when they wanted to and another group of animals that were forced to run-
The difference in the two sets was pretty remarkable. Even though the group that was forced to exercise did more running, they were less healthy and their immune systems were weaker.
It wasn’t play or exercise, it was drudgery.
When you HAVE to work the extra hours or take the second job to make your payments, you experience a similar outlook.
Do not trade your liberty for luxury, or your luxury will become your drudgery.
God was serious about this and that’s why he had established the year of jubilee, so that no one could put themselves in a financial hole to deep to get out of…
For that reason, we’ve got another proverb at the end of this chapter that speaks directly to this topic.
26Be not thou one of them that strike hands, or of them that are sureties for debts.
27If thou hast nothing to pay, why should he take away thy bed from under thee?
28Remove not the ancient landmark, which thy fathers have set.
The word of wisdom here is to not give away what you can’t afford to lose to get what you can’t afford to buy.
Don’t use what you can’t afford to lose as collateral for what you can’t afford to buy.
That’s what 26 and 27 are saying- don’t put yourself or your stuff as a surety- as a guarantee of the loan- if you can’t afford to pay it, why end up with nothing?
No one would stand at the counter at Kohl’s and say, yeah, I’ll let you guys just take $100 out of my paycheck for the next year- but that’s what ends up happening to many people. When you sign, you’re guaranteeing that money, and if you don’t pay you’ll be forced to- even if they have to garnish your wages.
Now, I’ve heard verse 28 often in my life, typically from a preacher espousing the old way of doing things.
However, verse 28 is speaking of not taking the markers that designate who the land belongs to- in other words, don’t give up your land to buy something.
This meaning is very plain in the very next chapter:
Proverbs 23:10 Remove not the old landmark; and enter not into the fields of the fatherless:
Proverbs 23:11 For their redeemer is mighty; he shall plead their cause with thee.
God didn’t take lightly to people entering into the fields of the fatherless and taking their fields-
He says, their redeemer is mighty and he will plead their case with thee… God says, don’t take advantage of the orphan or you will deal with me.
Scripture is a a grand story of God doing just that- coming as our redeemer to face the evil that has taken over our lives, pushed us into bondage, and tried to rob us of what God wants for us.
God says, careful now, their redeemer is mighty…
Our redeemer is mighty.
In the face of the foolish decisions and the circumstances of life, we often find ourselves alone, oppressed, indebted, and overcome…
But our redeemer is mighty…
Andrea Rogers, appeared before Judge Caprio with an accumulation of parking fines.
She wept as she explained her struggle to keep her life together after her son was murdered by her brother.
Her son was in debt when he was murdered, so the lender garnished her, the mother’s social security check. While she waited at the social security office the money in the meter ran out and she got a ticket. After the funeral and garnishment of the wages she couldn’t pay her rent so she was evicted. While waiting at court, she got a ticket but the meter in that parking spot was out of order.
She then went to legal services to get help and while waiting there the meter ran out and again she was given the ticket.
She broke down and cried before the judge that the fine was more than she could pay.
The 80 year old judge said “I’m going to take into consideration everything that you’ve been through and balance the equities to protect the interests of the city and lower all these fines to $50. How long will you need to pay that?
I’ve got $55 dollars on me, so I can pay it now your honor.
The judge said, so that will leave you with $5?
I’m dismissing all of this. I’m not leaving you with $5…
Jesus said to his disciples at the last supper, I will not leave you comfortless…