4 Financial Lessons From Solomon (The Richest Man in History)Egzanp

It is important that we invest the money that God has entrusted us with. In Ecclesiastes, we learn about diversification. Chapter 11, verse 2 states: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.” 

I get two things out of this verse. First, Solomon lays out the groundwork for diversification. I like the balance of having 7-8 “baskets of eggs,” rather than just one that would leave us with nothing if we dropped that one “basket”. We would lose everything.

With that being said, I also would not acquire 200 minuscule baskets that are worth next to nothing individually. In this case, if any one investment performed very well, it would make very little impact on the portfolio as a whole.  

I’d rather have 7 (or 8) baskets with higher potential. You’re not putting everything into one investment and yet you do not have a bunch of little investments to watch over that may give little return. If you have seven investments and any one of them performed well, it would have a decent impact on the portfolio as a whole. Diversification, but not too much diversification, is the way to go!