BUSI 538 Week 5 Discussion Board 2: Main Post Example

Discussion Board 2: Scripture, Investing and My Retirement Strategy

BUSI 538 Investments and Derivatives, Discussion Board 2: Main Post

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The thread answers the forum topic printed in Liberty's public course guide for BUSI 538; the writer's age, salary and plan are a composite, and the textbook, research, IRS release and Scripture cited are real.

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I am 34, earn $68,000 as an operations analyst and save through my employer's 401(k). Four passages shape how I intend to invest for retirement.

Proverbs 6:6-8 tells the sluggard to consider the ant, which has no chief or ruler yet prepares its food in summer and gathers it in harvest (English Standard Version Bible, 2001/2016). My analysis is that the ant's wisdom lies in acting without being forced: no overseer makes it save. Most of us need an overseer, and payroll deduction can be one. In the Save More Tomorrow program, Thaler and Benartzi (2004) let workers pledge part of each future pay raise to their retirement plan; those who joined went from saving 3.5 percent of pay on average to 13.6 percent in roughly 40 months. I will raise my contribution by one percentage point every January, working toward the $23,500 annual limit the Internal Revenue Service (2024) set for 2025.

Proverbs 13:11 contrasts money that comes quickly and melts away with money gathered slowly, a handful at a time, which grows. My analysis is that the proverb describes compounding: small amounts, left alone, grow because their earnings earn more. Bodie et al. (2017) show how diversification lets an investor capture the market's return without staking everything on a few stocks. I will hold low-cost index funds and avoid trading on headlines. The proverb also reminds me that the most dangerous moments for a patient investor are the ones that tempt haste, a sharp market decline that urges selling or a hot stock that urges buying, so I will set my allocation in writing and rebalance once a year rather than reacting to news.

In Luke 14:28-30, Jesus describes a man who begins a tower, runs out of money after the foundation and becomes the town's joke because he never estimated the expense first. My analysis is that counting the cost is a present value problem. If I want $60,000 a year in today's dollars for 25 years of retirement, I must estimate how much that stream is worth at 67 and work back to the monthly saving it requires. I recalculated my target this week using the textbook's time value methods and found that my current rate falls short, which is why the first decision above matters.

In 1 Timothy 6:17-19, Paul tells Timothy to warn wealthy believers against trusting in riches, which can vanish, and to trust God instead, and to be generous and ready to share, storing up treasure as a good foundation for the future. My analysis is that the passage calls for security without idolatry. This week's bond chapters offer a practical form of that balance: as retirement approaches, I will build a ladder of high-quality bonds whose maturities, and so whose durations, match the years in which I will need the money, so that the spending for those years is locked in. The textbook calls this immunization. A plan that funds my needs with certainty frees the rest of my wealth to be held loosely and given generously.

Together, these passages teach me to save before I am forced to, to let time do its work, to plan with honest arithmetic and to hope in something more lasting than a balance.

References

Bodie, Z., Kane, A., & Marcus, A. J. (2017). Essentials of investments (10th ed.). McGraw-Hill Education.

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Internal Revenue Service. (2024, November 1). 401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000 (IR-2024-285). https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000

Thaler, R. H., & Benartzi, S. (2004). Save More Tomorrow: Using behavioral economics to increase employee saving. Journal of Political Economy, 112(S1), S164-S187. https://doi.org/10.1086/380085