Christian Biblical Investing
Jerry Bowyer Chief Economist of Vident Financial, Editor of Townhall Finance, and President of Bowyer Research
- 2019 May 30
There is a growing interest in Christian approaches to investing. Most of that attention has focused on sin screens -- that is, investment portfolios which screen out companies involved with alcohol, tobacco, gambling, pornography, etc. This is often equated with Biblically Responsible Investing (BRI). But the phrase 'Biblically responsible investing' implies something broader and not exclusively focused on what Christians are against (as opposed to what we are for). Looking at the words themselves, BRI implies any approach to investing that upholds Christians' responsibility to follow the Bible in investing as in every other aspect of life.
Overview of Different Approaches
Think of it this way, Faith Based Investing is any investment approach based on one's religious faith. Muslims have Islamic Finance, also known as Shariah-based finance. Christians have Biblically Responsible Investing. And there are different approaches within Biblically Responsible Investing.
There are sin screens, which we've talked about above. Some sin screen investing treats such screens as a matter of individual conscience. Others insist that such screens are morally required. Among that latter group, there are many disagreements about what is forbidden, with some evangelicals focusing on socially conservative values, while those influenced by mainline protestant traditions might screen out gun makers or fossil fuel producers. The approach used by the more liberal groups is often called Socially Responsible Investing (SRI), but SRI is not a specifically Christian approach. But even within the liberal and conservative groups there are disagreements about what to screen -- stocks only, or bonds too? Ten percent sinful activity as a threshold, or more, or less?
There is also something called Impact Investing, a kind of positive screen which seeks to invest in worthy endeavors, such as water purification or medical research. There seem to be at least two approaches to impact investing: one has as its main objective the social goals, with financial returns as a possible added benefit. It is closer to philanthropy than to investing, and uses what is called 'concessionary money' -- that is, money you can afford to not get a return on, or even to lose. The other approach focuses on the profit motive, social goals as an addition to that. The idea is to harness the profit motive in the interest of the social goal, rather than the other way around.
Principles-based investing focuses on increasing probability of reaching financial goals by investing in countries and companies which honor Biblical principles of human productivity, because those are the principles associated with superior investment returns. It tries to minimize risky investments based on the idea found in the Sermon on the Mount that a house built on sand is inherently unstable.
These approaches are not inherently incompatible and some practitioners employ more than one.
Of course, for Christians, the answers do not come from any particular school of thought, they come from Jesus. If we are to be biblically responsible in seeking Biblical investment strategies, we are not just to look for Christian investment firms or Christian investment advisors. We must take direct responsibility to learn His teachings about investment and to follow them. God is not silent on these matters.
Investors who are looking for insight from Jesus will be happy to learn that he spoke about money and wealth more than any other topic in the Bible aside from the Kingdom of God. He mentioned money, wealth, and mammon 25 times in the Gospels. Interestingly, only 4 of those mentions are to 'mammon', which is a negative term for the false god/idol of money.
There are only 14 mentions of 'sin' in the Gospels. At least going by how often he talked about it, money and wealth was a more important topic for Jesus than sin.
There are 11 Gospel references to 'hell'. It takes the topics of sin AND hell to add up to the same numbers of verses which refer to wealth, money, and mammon.
In particular, a large proportion of Jesus' parables are based on themes pertaining to money and wealth. Roughly 20 times the Bible calls something a parable and then tells a story about wealth; specifically commerce, agriculture, stewardship, taxes, and similar topics. The rest refer mainly to household matters.
Beyond the official parables, Jesus also employs smaller parable like metaphors, such as 'the kingdom of God is like… a mustard seed… leaven… a householder… etc.' There is also the story of Lazarus the Rich Man, which is generally considered to be a parable, but the word 'parable' is not used. The story of the Sheep and the Goats clearly has a message about wealth, but is not called a parable.
Jesus Talks A Lot About Wealth, But What About Investment?
Reasonably well informed Christians understand that Jesus talked a lot about money, wealth, and finance. What is less well-known is how often his comments pertain specifically to matters of finance and investment. The parables undeniably deal with money matters, but what about investment matters? Of the 20 references to wealth and commerce in the parables which I mention above, a surprisingly large numbers are specifically focused on instances of financial investment.
In order to understand which ones are about investment, we must first answer this question: What is investment?
Investopedia has a good overview:
"An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit."
So, one acquires something of value now in order to create wealth in the future. As Investopedia points out, it involves goods 'not consumed today'. In other words consumption is deferred. There is delayed gratification of desire.
In light of that, we see investment themes discussed quite often in the Bible, especially in Jesus' direct teaching via parables.
The parables of the Hidden Treasure and the Pearl of Great Price, the Unforgiving Servant, the Rich Fool, Counting the Cost, the Lost Sheep, the Lost Coin, the Unjust Steward, Lazarus and the Rich Man, the Laborers in the Vineyard, the Ten Talents, and the Five Talents all involve an investment situation of one sort or another. Some refer to debt relationships (which of course involves lending, a form of investment). Some involve what we now call 'equity investment' meaning an investment with a variable outcome. Good examples of this are the two parables of the Talents in which the stewards are required to set out to make as good a return as possible, as opposed to a lending situation in which the amount to be repaid is set in advance and the variable is whether that amount will be given back to the owner.
Arguably my list above understates the number of financial parables, in that agricultural activity by its very nature involves investment. The purchase or rental of the farm is a capital investment. The seed is also a capital investment. And in situations where hired labor is involved, their pay is also an investment on the part of the owner, who spends the money on the land, the labor and the seed in the hopes of a return in the future.
So not only is wealth an important theme in the Bible, the specific usage of wealth which is called 'investment' is also an important theme.
Photo Credit: ©Unsplash/Markus-Spiske