For many people, thinking about investing is overwhelming and stress inducing. It is much easier to avoid the subject altogether. However, our role as stewards require us to consider whether we should invest, and also how we should invest.
This post looks at what the Bible has to say about investing, some of the common questions that arise, points to consider on what to invest in and Biblical principles of investing.
What Does The Bible Say?
The Bible doesn’t specifically state that we should invest, but also does not forbid it. Investing is mentioned in Proverbs 31:16 and used in Jesus’s parables (ex. Parable of the Ten Minas found in Luke 19:11-27), implying that it is expected and normal.
When we think about our role as a steward, we are responsible for managing what God has entrusted to us for His benefit. The Parable of the Talents (Matthew 25:14-30) illustrates this quite clearly. There are a few important points this parable mentions about our stewardship responsibility:
- Each of us has varying abilities to manage what God has given us
- Doing nothing is poor stewardship
- We will be held accountable for how we manage the assets entrusted to us
The Bible expects us to do something with what He has provided to help it grow. Investing is the way to help financial assets grow, and this can take many forms (even if it is just earning interest at the bank). We all may not be able to get an amazing return, but we need to do what we can.
4 Common Questions
There are four common questions I have heard over the years about investing as Christians:
1. Do I really need to invest since God will provide?
Years ago I had a conversation with a friend who said he didn’t invest or save for anything as God promises to provide for him. Certainly God does promise to provide for our needs as Matthew 6:25-34 and many other passages of Scripture state. But as stewards we still have a role to play. To sit back and not use the resources effectively that He has provided, means we are presuming upon God.
2. Is investing gambling?
No, investing is very different from gambling. With most types of gambling only one person wins, and everyone else loses. With investing, there can be many winners – your gain doesn’t mean that others are losing. You are putting money into something that has the potential to grow and be a positive benefit in society.
There are certainly some types of investing, such as day trading, that can look more like gambling (and may very well be). However, actual investing requires thought, research and patience to work out. You may not be the person who does all those things (you may hire a financial advisor or investment manager), but someone should be doing all that.
Even if you invest in a thoughtful, disciplined and patient manner you still may lose money.
3. Should I invest in the stock market?
When the Bible was written, it was an agrarian economy. Wealth was created mainly by owning land and using it to grow crops or raise livestock. The Bible uses examples of investing in real estate because that was the common form of investing at that time. However, it is not an endorsement of real estate over other forms of investing.
Stock markets started in the 1600’s and became a way for people to invest and own a small portion of a company. For a long time buying stocks was out of reach of the regular person, it was mainly used by the wealthy. In the past 60 years or so, costs have come down and technology has improved access to stock based investments. Most Americans are invested in the stock market (whether they know it or not) through their retirement plan at work (if offered).
At its most basic level, owning stock is owning a piece of a company. That ownership entitles you to vote on important issues facing the company, receive income from the company’s operations (called dividends) and participate in the growth/decline of the company through the increase/decrease of the share price.
Investing in the stock market is not the right decision for everyone, but can provide long-term growth.
4. Should my values impact my investing?
As our faith should impact all areas of our lives, many Christians ask how it should impact their investing. Faith Based Investing (also known as Biblically Responsible Investing) tries to help with this. Faith Based Investing accomplishes this in three ways:
- Avoid – investments that don’t align with Biblical values (such as pornography, abortion etc)
- Advocacy – use their influence to encourage positive change in companies they own
- Affirm – invest in companies who are doing good
I have written a much more extensive post on faith-based investing that looks at the pros and cons of both sides of this debate, which I would encourage you to read.
Before You Start
Before you start investing, I would encourage you to take time to check yourself and your motives.
- Do you have a solid financial position (ie you won’t need this money for current expenses or emergencies)?
- Are you currently giving to support the Lord’s work?
- Are you providing for your family?
- If your investments decline, how will that impact you and your faith?
- If you invest, and the Lord blesses it, how will you use the growth?
- How will you protect your heart from greed?
Once you have thought through these questions, take time to pray for wisdom for the decisions that lie ahead.
What Should I Invest In?
There are many different ways to invest (CD’s, Bitcoin, gold, fine art etc), but the two most common investments are real estate and the stock market. There is nothing wrong with either type of investment (though there are areas to watch out for), and both can provide long-term growth. However, they tend to appeal to different types of people. Below are points on each for you to consider:
Generally, people who invest in real estate prefer their investments be more tangible. They need to be able to see where they are investing, and the stock market is too abstract for them.
My main concern for people who invest in real estate is the use of debt. Our tax code encourages real estate investors to carry mortgages on their properties. However, Proverbs 22:7 says “The rich rules over the poor, and the borrower is the slave of the lender.”
Our investments should not enslave us. If you choose to invest in real estate, I would strongly encourage you to not carry ongoing debt or minimize it as much as possible. This makes no sense from a tax perspective, but enables you to be flexible in following the Lord’s leading in your life.
Some people don’t want to get a call from a tenant at 11pm on a Friday night about a clogged toilet. They are fine with not being able to physically touch their investments. Investing in stocks can enable them to participate in say real estate, but not have to deal with the headaches that come with direct ownership.
However, investing in the stock market can cause people to pursue the next fad in investing and abandon a wise long-term investment plan. Whether it is tulip bulbs in the 1600’s, dot com companies in the early 2000’s or Bitcoin in the 2020’s, each one has the ability to derail our long-term investment plan. As Ecclesiastes 1:9 says “There is nothing new under the sun.” Tune out the noise and focus on the plan.
How Should I Invest?
The Bible has very practical advice on how we should invest. Interestingly, many of these principles are used in modern finance, but have their roots in the Bible.
God owns it all
Deuteronomy 10:14 “Behold, to the Lord your God belong heaven and the heaven of heavens, the earth with all that is in it.”
If God owns it all, we need to be careful to invest it appropriately because it does not belong to us. We will be called to give an account for how we have handled the Lord’s money, so remembering it does not belong to us, can change our decisions around investing.
Take Appropriate Risk
Ecclesiastes 5:14-16 “There is a grievous evil that I have seen under the sun: riches were kept by their owner to his hurt, and those riches were lost in a bad venture. And he is father of a son, but he has nothing in his hand. As he came from his mother’s womb he shall go again, naked as he came, and shall take nothing for his toil that he may carry away in his hand. This also is a grievous evil: just as he came, so shall he go, and what gain is there to him who toils for the wind?”
Life involves risk, and so does investing. You can’t control the outcome when you invest, but you can control how much risk you take. If an investment sounds too good to be true, it probably is.
Ecclesiastes 11:2 “Give a portion to seven, or even to eight, for you know not what disaster may happen on earth.”
Not putting all your eggs in one basket is very wise advice. No matter how good an investment is, it can still fail. Investing broadly helps to reduce your risk.
Ecclesiastes 11:4 “He who observes the wind will not sow, and he who regards the clouds will not reap.”
We don’t know what the future holds, so if you are waiting for the perfect conditions to invest, you never will. Investing regularly over time reduces the chances of buying at the height of the market.
Proverbs 11:14 “Where there is no guidance, a people falls, but in an abundance of counselors there is safety.”
Even if you feel knowledgeable about investing, receiving wise Biblical counsel is beneficial. If you don’t feel comfortable or knowledgeable about investing, I would highly recommend you find Godly counselors to help you.
That may include having a Christian financial advisor, but be sure to do your research prior to committing. Just because a financial advisor is a Christian, doesn’t mean they have the Biblical knowledge and technical expertise to help.
No one knows the future, or how a particular investment will perform down the road. But, finding a style of investing with an appropriate amount of risk that fits you, will help you stay the course during a downturn.
Do your due diligence on whatever investment you are considering and leave the results up to God.
Points To Consider
- All investments entail risk (even if the salesperson says it doesn’t)
- If the Lord blesses your investments, be careful to guard your heart from the deceitfulness of money
- Investing takes time, patience, and persistence – three things we all struggle with
- You will lose money at some point. The key is to learn lessons from it and not repeat the same mistakes
- If you can’t understand the investment, you would be well served to avoid it