“Four things are small on the earth, but they are exceedingly wise:
- The ants are not a strong people, but they prepare their food in the summer;
- The shephanim (like badgers/gophers) are not a mighty people, yet they make their houses in the rocks;
How could this proverb address the question of borrowing against your home? Read on...
The whole proverb reveals the lessons to be learned from four of God’s tiny creatures (ants, rodents, locusts, and lizards), but only the first two teach financial lessons. Stupid critters? Teaching finance? Yet the text say they’re “exceedingly wise,” a phrase used only once in the Bible! Why? The same God who makes us, also created the ants and rodents. So He planted wise lessons in them, to teach us something—because we get too confident in our own cleverness.
The first financial tip is taught by the ants: save your resources in the summer, a time of abundance, to prepare for winter, a time of scarcity. We look at the ants’ lesson at Proverbs 6:6: What are two essentials for financial survival? Now we’ll look at the second tip, the rodents “making their houses in the rocks.” How should our family home, often our largest single asset, fit into our financial strategy?
The family home should be a place of refuge, rest, and refreshment. If we have nowhere to rest, to get renewed, we’ll never perform well, diminishing our livelihood. We could weaken or even endanger our entire family. So risking the family home, though very common, is very dangerous, and the anxiety involved cuts dramatically into our happiness.
Translation: Shephanim
The Hebrew word שפןים (šā•pān•îm, pronounced “shah-phan-eem”) can also be translated as rock badgers, conies, or hyrax. It refers to any one of several small ungulate mammals of Africa and Asia with rodent-like incisors and feet with hoof-like toes. The text tells us that the šā•pān•îm are exceedingly wise because they make their homes safe and secure—“rock solid.”
Home Equity Loans—Holey Debt
A clear-title house, free of any mortgage or lien, is a very valuable, human asset. When we have significant debt against our home, it’s as if the rock badgers planted dynamite under their craggy homes—it might not explode... Many financial planners encourage their clients to take out loans against their homes, on the grounds that capital “tied up” in a family’s principle residence is “idle money.” They say, “Put your home to work!” However, this text suggests this is a foolish financial strategy. This text advises us to ensure our home is protected from all threats, including creditors. Foremost, our home must provide secure shelter and then, as a secondary consideration, it may or may not be a “good investment.”
Different Direction with Tax Benefits
Canadian and American tax regulations give special incentives for residents to invest in their principle residences. In Canada, any appreciation in the value of one’s principle residence is exempt from capital gains tax. In the U.S.A., mortgage interest on principle residences is tax deductible. These regulations often motivate residents to buy more house than they need, and the resulting debt then compromises the asset. These incentives may violate the “exceedingly wise” counsel in the proverb—though they benefit the disciplined few who can use them wisely. If there were no tax incentives for personal residences, I imagine, many of us would live in much more humble houses.
Real Estate as an Investment
Rather than leveraging a mansion, it may be happier to have a smaller family home, and then, if possible, to mortgage a second house as an investment property—if you’re confident that house prices will rise. On the down side, that may mean forgoing some tax benefits. But I don’t believe that we’ll see house prices soar in the mid-21st century, the way they did in the last half of the 20th century, primarily because of demographic trends (an aging population having fewer kids), and as the big Boomer population passes on, their houses will be flooding the market.
Exceptions to the Rule
There are of course exceptions to this rule. Some have borrowed with their houses as collateral and been very successful in business. But many more have borrowed against their home only to regret it later, during economic downturns and “bursting housing bubbles.”
Our Maker, Saviour, and Friend
Jesus once described two houses, with specific reference to their type of construction. His story suggests that both builders enjoyed equivalent resources going into their projects.
One house was built without a foundation. It went up quickly and ornately, since the builder spent more time and money on its visible features. The other house was built on rock. This meant costly, time-consuming excavation, hard work providing few “cosmetics” and little “curb appeal.” Passers-by may have admired the first house, especially on sunny days, but when a violent storm blew up, everything changed. The first house collapsed. The second stood firm.
Jesus used this analogy to contrast those who hear His teachings, but don’t obey them, with those who hear them and live them (Matthew 7:24-27). Jesus wants us to build our lives on rock, safe against the storms of life. We do this by obeying Him. This rock-solid analogy advises, it’s best to keep your house mortgage-free and debt-free, because financial storms are inevitable.
- Memorize the text in your favourite Bible translation and think about it often.
- Work harder to gain clear title (mortgage-free) of your home than to build a large pension.
- Avoid expenditures that are primarily for “show.”
- Don’t avoid or build more house than you need for your family, especially if it requires a big mortgage.
Which of these steps, if any, does Jesus want you to take now? Ask Him.
Related Illustration