The Biblical Way to Put Your Money to Work

Have you ever found yourself confused about what God might say about the investment markets? A lot of what goes on in the world’s investment markets feels a lot like gambling but is that the way God sees it? As an investor and a Christian, I walk the thinnest of tightropes. Those outside the world of financial markets may not understand the conundrum that Christian investors face because the mainstream news doesn’t broadcast the ways of Wall Street (except when they royally mess up).

If you aren’t there already, the day may come when you face some of the choices I face every day. Let’s arm ourselves with some Bible based knowledge so we can make informed decisions.

The investment world is populated by many different people with many different goals. Some buy and sell stocks, others bonds, still others hogs, corn, gold or even complicated products like mortgage-backed securities. Mortgage backed securities, by the way, played a big role in the market crash of 2008 and 2009. The markets are complicated but when you strip everything away, you find two basic types of people: traders and investors.

Traders

Not everyone will agree with my definition, but to me, a trader is somebody who tries to make money in the short term. (By trading.) They purchase an investment product (stocks, for example) and often sell it a short time later. A short time to one trader may be minutes but to another, months. The point is that they are not looking to hold the investment for years.

For the most part, financial media gears itself toward traders, highlighting stocks that are “due for a bounce” or “near a 50 day moving average.” Traders will sell when the trade goes down when it should have gone up or at a certain point when they have made a lot of money. Traders anticipate that many of their trades are not going to work out so they preset limits on where they sell if it goes bad. There is a popular adage that, “even the best traders are right only 60 percent of the time.”

Investors

Investors have different goals. Investors purchase investment products with the intent of holding them for long periods – years or decades. Investors typically have long-term holdings when they pass away that are part of their estate. They don’t much care about the short-term rise and fall of the stock market. They believe in the quality of the company and frequently depend on stock dividends (similar to interest) to be a sizable source of their income. If the value of a stock goes down, they often buy more because, to them, it’s a quality company that’s now on sale.

What does the Bible Say?

Verses that may be applicable include these:

Proverbs 13:11“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”

Proverbs 20:21“An inheritance gained hastily in the beginning will not be blessed in the end.”

These are two of my favorites. They make a clear delineation between “trading” and “investing.” The problem with trading is that it gets awfully close to the act of gambling. If a trader looks at a stock chart and tries to guess the future direction of an investment product based on little information, how is that any different than betting on a horse, a football team, or a game of blackjack? Some traders put much research into their trades and hold their investment for longer periods so I would not say that all traders are gamblers but for the average person without advanced Wall Street knowledge, it’s hard to call it much else.

Investing, however, is different. Those who make honest money and put it to work for the long term are essentially making a loan to a company and expecting dividends or price appreciation in return. They aren’t looking for quick profits. Instead, they’re looking for slow gains. Let us, however, be clear: Investors can be gamblers too.

Bottom Line

Like most Christians, I want to be biblically responsible with my money. I want to invest in a way that will please God. Aside from all rules, it may be an issue of “the heart.” What are my goals and how do they line up with God’s plan for my life? Am I tithing from the income? Is God convicting me when I ask Him what He thinks about my actions?

As you make decisions about how you will put your money to work, remember these verses. God is all about the person who invests for slow growth but likely does not condone actions that are aimed at quick gains.

By the way, look at the statistics of the professionals. Once again, we find that the Bible has the right strategy.