We’ve all heard about the dangers of credit cards. We all know someone (or are someone) who has gotten in debt a little too deep because of them.  Most debt counselor’s advice is to simply quit using them or cut them up and pay off the balance. Then when you’re out of debt, and can use credit responsibly, you can have your cards back. But my question is; when is it responsible to use credit? Most financial advisors, both Christian and non-Christian seem to agree that credit is a tool and when used responsibly it can help to increase your net worth. But that doesn’t seem to be working for most people. In fact, I think it’s clear that credit has financially bankrupted more people than it has helped.

I think that one of the major problems is that unlike other tools that we use, most people are not taught how to use credit wisely. Sure parents tell their children to beware the dangers of credit cards and warn them about instant gratification but they never teach them what situations it is ok to use credit in. There are plenty of thumb rules that attempt to answer this questions such as, “only use credit cards in an emergency”, or “credit is only ok to use if you’re buying something that will increase in value”. Unfortunately, these are only thumb rules, and pretty unstable at that. What constitutes an emergency? Does someone have to be at risk of losing a limb or is it ok to use financing if the sale on the TV that you really wanted is going to end soon. And how do you know if what you’re buying is going to increase in value? Over the last year we saw foreclosures across the country and people walking away from their houses because they owed more than the house was worth. Were their mortgages a good use of credit?

We see credit or debt discussed several times in the bible. But what we as Christians often forget, is that there are two sides to credit. There is a borrower, and a lender. Our lifestyles and roles as consumers have trained us to be borrowers without reminding us what a blessing it is to be a lender. I don’t mean to be a lender for profit, the way the banks and credit card companies do. But to be a lender to someone in need. Remember that God told Israel that he would bless them and make them lenders to many nations and borrowers from none (Deuteronomy 15:6). How can we reach out to those in need if everything we own is already owned by someone else? The purpose of credit is not to allow us to purchase what we want or when we want it. For Christians, the purpose of credit is to serve as a way to help others. We should be the lenders, not the borrowers. God desires us trust him for our needs and to be lenders or even givers to others in need (Matt 5:42; 6:31-32).

So, I would say that “yes”, credit is a tool. But not a tool like a hammer with which you may bruise your finger if you make a mistake. But more like a chainsaw, in the sense that if you use it incorrectly you may never recover. The sad part is, most people are holding it on the wrong end and will end up hurting themselves.

Supporting Verses about Debt

Others were saying, “We are mortgaging our fields, our vineyards and our homes to get grain during the famine.” Still others were saying, “We have had to borrow Money to pay the king’s tax on our fields and vineyards… We have to subject our sons and daughters to slavery. Some of our daughters have already been enslaved, but we are powerless, because our fields and our vineyards belong to others.”

- Nehemiah 5:3-5

A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.

-Proverbs 17:18

Give to the one who asks you, and do not turn away from the one who wants to borrow from you.

-Matthew 5:42

Do not be a man who strikes hands in pledge or puts up security for debts;

If you lack the means to pay, your very bed will be snatched from under you.

-Proverbs 22:26-27

The wicked borrow and do not repay, but the righteous give generously;

-Psalms 37:21

The rich rule over the poor, and the borrower is servant to the lender.

-Proverbs 22:7

Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.

-Romans 13:8

There has been a lot of debate over the last few months on whether the new stimulus package is necessary or even moral. One of the biggest objections that I have heard is that people don’t want the government spending “their money” (that the government collected through taxes) on things that they don’t believe in or support. I fully understand this point of view and being fairly conservative would appreciate the government letting me support my own causes with the money I earn. But I was reading the Gospel of Matthew the other day and came upon chapter 22 where the Pharisees tried to trap Jesus in his words by asking if it was right to pay taxes to Cesar or not.

But Jesus, knowing their evil intent, said, “You hypocrites, why are you trying to trap me? Show me the coin used for paying the tax.” They brought him a denarius, and he asked them, “Whose portrait is this? And whose inscription?” “Caesar’s,” they replied. Then he said to them, “Give to Caesar what is Caesar’s, and to God what is God’s” (Mathew 22:18-21)

It reminded me again how little ownership we really have. As stewards, we understand that the possessions, talents, and gifts that we have are all given to us by God to manage. But we forget that the money we use on a daily basis is minted and given value by the government. In fact, according to Matthew 22, the government owns the money that we use every day. Now this obviously does not supersede Gods ownership of everything on earth but it does show us that the money that the government collects for taxes was never our money to begin with. Just as we are to give to the Lord from our first fruits, what is already his, Jesus tells us that we are to give to Caesar what is Caesars. It doesn’t matter if we agree with what the Government is doing with the money because it is theirs to do what they want with. The stewards that are in charge of it, will be judged accordingly just like in the parable of the talents. God will not hold us responsible for what is done with the taxes collected.

So while we may agree or disagree with the way the Government is spending tax dollars, we have to remember that it was never ours to begin with. We are fortunate enough to live in a time where we can choose who will be in charge of spending our money but that is the extent of our tax accountability. If there are any other opinions out there I would be glad to hear them.

Once upon a time…

A young man wanted to build a house. He had never built one before and didn’t know quite what to expect but he knew that this would be the house he lived in with his family for the rest of his life, and that it would continue to shelter his family after he was gone.  Because this was such an important undertaking he decided to get some advise.

First, he went to the lumberyard to ask the Lumberjack what he should build his house out of. The Lumberjack listened to what he needed in the new house and explained to him how lumber was the best choice for all his needs. He had a very compelling case. Lumber was strong, a natural insulator and cheap enough to be replaced as needed. A lumber house could meet all of his needs.

 His mind was pretty much made up but because this was such an important project he decided to go ahead and get a second opinion. So he went to the brickyard and told the Bricklayer what he needed in a house and asked what he should build it out of. The Bricklayer listened intently and considered the mans need. After a few moments, the Bricklayer explained how the only way the man would get everything he needed out of a house was to build it with brick. The man listened to his advice and saw that he had a very good point. Brick is very strong, waterproof, can endure the elements and lasts a very long time. A brick house could meet all of his needs.

His mind was made up but just to make sure, he thought he would get one more opinion. He went to the Masons shop and told him about his dilemma. The Mason listened intently to the mans story then told him that his best bet was to build his house from stone. It was long lasting, very very strong and always available. The man had finally made up his mind.

When the man went home that night he told his wife about his day. He was very proud of himself because he got the opinion of three professionals before making up his mind to build a house out of stone. His wife thought for a moment and asked him, “Dear, are you sure you spoke to the right professionals”? “What do you mean” he asked. She answered, “It seems to me that a bricklayer would be an expert on bricks, and a Mason on stone, but none of these professionals are true experts on building a house”. The man stopped and thought for a few moments about what his wife had said and then asked her, “But who would I ask about building a house”? “Why, an architect of course” his wife answered.

The man knew his wife was right and set off the next morning to see an Architect. The man explained everything he needed in a house and how he wanted the house to take care of his family after he was gone. The Architect listened intently and explained to him that for a house to do everything the man wanted it to, it would have to be built of wood, brick, stone, steel, aluminum and many other materials. He worked with the Architect to ensure that the final design met all of his requirements and the Architect offered his advise on several areas that the man had not considered. When all was said and done, the man not only had a very well thought out plan for a house that met all his needs, but he also had someone to go to when things in his life created changes in his plans.

Soon after, the man and his family built their new house with the help of the Architect. And they all lived happily ever after.

THE END

While this story was obviously fictional, the message is something that we can easily apply to our finances. When getting advise on financial matters, be sure to ask the right people. I have had many meetings with insurance agents, mortgage companies, investors, and tax accountants and all of them seem to know exactly what I need to make sure that my financial planning needs are met and that my family will be taken care of when I’m gone. However, I’ve found that the best financial plan incorporates more than just an insurance agent or mortgage broker can offer. A full financial plan requires a full financial architect. Someone who is knowedgable  in many, if not all areas of personal finance.

Be sure you know what areas your financial advisor is fluent in before you trust your families future to his planning and advise. And beware of the roaming insurance agents who knock on your door and claim to be able to help you protect your families future. They may know their trade well and make a convincing case but be sure you get some advice from an architect before you make your final decision.

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

                                                                   -Preamble of the U.S. Constitution

 I had a discussion recently about the Obama stimulus bill that is currently awaiting approval in the U.S. Senate. While there is a lot of debate about whether this bill will truly stimulate the economy the way that it was originally intended to, I believe there is a more moral issue with the bill.  You can read in the preamble of the U.S. Constitution that our founding fathers were not establishing America solely for their own prosperity, but for their posterity, meaning their descendents. Much of their comfort was sacrificed in this process. It brought war onto American soil, took fathers and sons away from their families, many not to return, and essentially stopped trade into and out of the colonies, thus damaging their economy. But this was the price that Americans paid to ensure that the freedom that the founding fathers had dreamed of was able to be passed on to their children and grandchildren. In fact, it was so important to them that when the constitution was written, they included their descendants in the reason for its drafting.

Today, over two hundred years later, we have become the most prosperous country in the history of the world. We have the fastest growing economy, one of the strongest militaries, and the income level at our poverty line is in the top 15% of the world richest people¹ .  Now we are in the middle of what the media is calling an economic crisis and are considering passing a stimulus package that we believe will help pull us out. Without debating the effectiveness of the bill, we have to ask; is this what America has become about? This bill will allow the printing of hundreds of billions of dollars and put America into unimaginable debt. This debt will not be paid off in our lifetime but will pass on to our children and to their children.  Have we become so spoiled that we are willing to mortgage our children’s future because we can’t afford cable television or a new cell phone?  We have become so comfortable in our lifestyle that surviving on unemployment or having to drive an older paid-off car has become an economic crisis.

Our forefathers were willing to weather the storm and endure the hardships so that we might have a chance at the prosperity that we now have.  Is it really worth indebting our children so that our generation can remain as prosperous as we are? Or is it time to weather our own storm to ensure that our posterity is born with the same opportunities that we were given? 

¹Based on single person income of $10,400, according to www.GlobalRichList.com

I’ve wanted to do a post on taxes for the last few weeks and I think this is a good time. I found an interesting article on cbsnews.com about whether you should hire a tax professional to prepare your taxes or if you should do it yourself. I’ve prepared my own taxes for the last five years and this is the second year that I’ve been offering my services to clients so I have a pretty good grasp of when things have gotten a little more complicated than the average non-financial-industry individual is comfortable handling.

Most people with a couple of free hours, and the desire to learn can prepare their own return. Using computer software like taxact.com or turbo tax only makes it easier. But taxes are not something that you want to learn through trial and error. If things get beyond your typical W-2’s and 1099’s you may want to consult an expert. The good news is, you probably know someone that does their own taxes and would be willing to answer your questions for free. Just make sure they know what they’re doing.

The article below gives a few examples of when it might be good to hire someone to do your tax preparation. While it’s not all encompassing, it’s a good start.

Do it Yourself or Hire a Tax Pro?

The IRS estimates that about half of all tax returns are prepared by a tax professional.

The most common reasons individuals cite for using a professional tax preparer are not having the time, willingness or ability to prepare their own. With times as tight as they are today, a lot of folks may be tempted to try to save a few bucks, forgoing the tax preparer’s fees, and prepare and file their own tax return.

But that may be penny wise and pound foolish.

Examples Of When To Consider Turning To A Professional Tax Preparer For Help:

·        Short Sale: If you sold a home through a short sale last year — a transaction in which the lender allowed you to sell the home for less than the mortgage balance and cancel the remainder of the debt — you will need to report the sale. A temporary tax law effective for such sales from 2007 through 2010 allows individuals in this situation to avoid reporting as income the amount of the debt that was cancelled. A tax pro can help to ensure you report this properly.

·        Rental Income: Many homeowners who cannot sell their homes have turned to renting their house, in the hope of waiting out the decline in home prices and selling later, when the market improves. If you’ve received rental income, you’ll need to report it on Schedule E, Supplemental Income or Loss (from rental real estate, etc). The rules for rental property deductions are complicated, especially when you lived in the house part of the year and rented it out for the remainder. To be deductible, some expenses must be apportioned over the rental period and other expenses — such as repairs — need to be classified as repairs or capital improvements, which affects how they can be deducted.

·        Recovery Rebate Credit: Last year, the government issued the “recovery rebate credit,” checks that totaled $600 per person, or $1200 for couples, or more. While eligibility for receiving the rebate check is based on your 2008 income tax return, since this was done last year, Congress based the initial round of checks on 2007 tax returns as a way to get the money into the hands of folks more quickly. Since the rebate was really a credit against your 2008 taxes, many folks who did not receive a rebate check in 2008 may be able to claim it when they file their 2008 tax returns. If, in 2008, you lost your job and will report lower income, had a child, graduated college and were no longer claimed as a dependent, or are a retiree who did not file a 2007 tax return, then you may be eligible to claim an additional “recovery rebate credit” on your 2008 taxes. See an experienced tax pro to help you figure this out.

·        Self Employed Income: If you are self employed, there are a lot of tax deductions and complicated tax issues to consider. While you can deduct business-related expenses, this is an area in which a lot of folks are likely to go too far, and the IRS is on the lookout for that. Also, computing and reporting the correct amount of self-employment taxes is tricky – just ask Mr. Geithner!. A tax pro with experience in reporting self-employment income and the unique and legitimate tax strategies of your specific work or situation can also help you maximize your tax savings.

·        Investment Sales: If you report sales of stocks or mutual funds in non-retirement accounts, you’ll have to compute the capital gains or losses from the sales. You’ll need to complete Schedule D – Capital Gains and Losses. But to calculate your gains or losses, you’ll need to figure out your cost basis, which includes what you originally paid plus any reinvested dividends. And if you sold shares of stocks or mutual funds you’ve owned for a long time, then you may have a hard time doing that, especially if you cannot locate all your records. A tax pro with experience in reporting investment income can help track down the information you need, or come up with a good faith estimate that the IRS will accept.

This past week I got quick reminder about what my material weaknesses are. Whether we know it or not, we are all materialistic to an extent. It’s good to know where your weaknesses are thought so that you’ll be ready when you’re tempted.

This past week, my home computer monitor gave out. Well, it didn’t really “give out” as much as start popping, and hissing and smelling like burning plastic and then shut down. I’ve had it for just over two years which means there was no warranty and an equivalent monitor would run me around $350. Seeing that I run a website for a living and spend a good majority of my day staring at a screen, my first instinct was to go shopping for another monitor. But there was a problem. This past month my wife and I ran into some unexpected expenses ranging from unplanned oral surgeries to a home improvement project gone well beyond budget and we were starting to get behind on bills. It didn’t take much for me to instantly want to turn to my credit cards for a simple solution.  After all, I do make a living working on computers. Why should I have to downgrade on a monitor just because my last one unexpectedly went bad. If anything, it was time for an upgrade. After a day or so of shopping I had a few prospects in mind. But I had been wrestling with the prospect of using my credit card. I knew that the right way to get something new is to save up and buy it with cash but this seemed like an exception (this feeling is usually the first indication that you have a weakness). After all, we don’t have another monitor and all of my finance info is saved on that computer. We use it for movies, games, work ect. If we have to spend money to buy a new monitor, then we should have another great one. Right?

Are you seeing where the materialism is sneaking in? The truth is, yes I needed a new screen, but, like it or not, it didn’t have to be top of the line, or even middle of the road. Looking back on it, thinking that I was going to go into hundreds of dollars of debt to get a brighter, higher definition picture of the same internet that every computer goes to seems not only silly, but a little scary. My wife and I both drive older paid off cars, we have a 23” TV in our living room that I bought for $50 almost 10 years ago and every piece of furniture in our house was either a hand-me-down, or bought at a thrift store for $30 or less. In fact, even the monitor that just broke was a free upgrade that came with the computer that we bought over 2 years ago. We don’t often give in to advertising or the urge to “keep up with the joneses”, so realizing how quickly I was ready to abandon our budget and turn back to credit cards was a real eye opener for me.

Well, it ends up that there was an old 15” CRT monitor stashed in the back of a closet at the office. I lugged that home last Thursday and it’s sitting on my desk at home right now. My wife and I decided that we would wait and save up the money for a new monitor. I can’t say that I’m completely satisfied with the outcome, after all, I still really want a new Hi-Def screen. But at least I made the right decision. And some good did come of the situation. My previously unknown weakness managed to surface and I was able to identify it before it could do any damage. So now that I know, I’ll have time to pray and work on my new problem while we save up for a few other things that my wife and I need more than I need a new screen.

One of my favorite quotes of all time is, “What you do best is probably so easy for you that you underestimate its value”. I’m not sure who said it but it rings very true. Many of us take some of our most valuable skills for granted because we don’t recognize their value.  God created each of us specifically for a purpose. Not only are we designed to carry out that purpose, but God chose our environment, our personality, and the trials we face so that we could be in the position that we need to be in to fulfill that purpose.

For most of my life I have always considered myself unremarkable. I was born in the suburbs to a middle class family, was raised by both of my parents and have never lost anyone close to me. It was hard for me to minister to people because I couldn’t relate to the problems that most people had. My parents had never been divorced, while we were never rich we also never went without, I never even had a cavity in my teeth. You could say that there was nothing about my life to feel sorry for. It has been said that character is built though trial but I wouldn’t know because I had never had to face any. Of course as a teenager I made everything into a miserable mess but in reality, I was spoiled.

After becoming a Christian I wondered why God had not equipped me for the tough circumstances that many people had faced. It didn’t seem right. The bible is filled with stories of people that suffered for their faith and lived lives of struggle and loss and did it all for the glory of God and they were considered heroes. It took me a while in the financial industry to understand how my situation could really be put to work.

To paraphrase the quote, what I did best was so easy for me that I underestimated its value.

The bible says that it is easier for a camel to fit through the eye of a needle than for a rich man to get to heaven. I was born in the wealthiest country that had ever existed. I worked in an economy that was built on greed and fear, surrounded by people that were so spoiled that they felt they didn’t need God….and I could relate.  I was fluent in the language and the customs and understood how someone could be blinded by wealth and ambition. I finally understood why God had put me in the situation I was in.

Stewardship is a word that is very rarely used and even less understood in the world of finances. The belief that God owns everything and that we should be putting his word above the “Wall Street Journal”  is laughed at in the business schools. While something called “ethics” is taught, the bottom line is just that, the bottom line. Everything comes down to profits.

It is not just the pastor who needs to be teaching true stewardship, it is the financial advisors, the fund managers and the trusted financial professionals who need to be explaining to their clients the biblical truths about money.  It should be our goal to reach the everyday Christian who doesn’t realize that his management of worldly wealth is being evaluated by the true owner of all and teach him that the bible offers insights and purpose for the wealth that God has entrusted to him. We also need to be a shining light in the darkness of the financial realm and show the world that God is in us and that there is something better than worldly ambition and greed.

My dad uses the phrase “Missionaries to the land of Mammon” to talk about what we do. Trying to reach those who are so focused on the wealth of this world that they cannot see anything beyond it; teaching those who horde their wealth how to be stewards; helping those who believe they are poor to realize that they have more to give; and showing an industry of self proclaimed “Leaders” what it means to be a servant.

I spent much of my life trying to change the situation I was in so that I could help those around the world but what I didn’t realize was that God had raised me in these conditions so that I could serve the purpose that he had planned for me before I was born. I searched for a mission because I did not realize that God had already given me one.  As I look around at people I know I see many of them looking for a mission in life. Whether it’s climbing a corporate ladder or trying to save the environment. It’s important to remember that God has a master plan, both for mankind and for your life. He created you for a purpose, and he didn’t ask you what you wanted that purpose to be. He gave you skills you would need, the personality that the job required, and the working conditions to get the job done. We can search for a mission that meets our desires, or submit to the master plan that was planned for us. We have, or have access to everything that we need.  Many of us just don’t realize that what we do best is so easy for us that we underestimate its value.

In the last few posts we’ve covered tough questions relating to stocks and bonds. I’d like to take a break from talking about investment vehicles to respond to one of the most asked questions and most popular assumptions in regard to Biblically Responsible Investing. The ever dreaded…

“Will I have to sacrifice returns to invest in accordance with biblical principals?”

Like I mentioned, this often comes in the form of a logically laid out assumption such as, “well if I limit the stocks that I’m allowed to buy, then I’ll miss a lot of opportunities that I would have had otherwise”. Before I respond to that statement or answer the above question, I’d like to address the biggest concern that comes to mind when I hear someone in that mindset. The first question I always have to do is, “Would you still invest in accordance with biblical principals if it meant that you would absolutely have to make lower returns with your investments?” What is more important? There are plenty of immoral or even illegal investing opportunities out there that will get you much higher returns than you could make in the stock market.  The point is, what is your first priority? Is it getting the best returns, or honoring God? In Matthew 6:24 Jesus tells us “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money”. That last line, “You cannot serve both God and Money” is important for Christians to understand. No matter what we do, or how hard we try to avoid it, at some point, our priorities are going to come to a test. We are going to have to choose between the things that we have chosen to make most important to us. Investing may be one of those times. We may have to make a choice between doing business the way God instructed us to, or the potential of greater returns. So what is the right thing to do?

Matthew 6 is one of my favorite chapters in the entire bible when it comes to God and money. Jesus sums up in a couple of short paragraphs many of the key themes that we need to remember about how God cares for us. Matthew 6:31-33 says, “So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ for the pagans run after all these things, and you’re heavenly Father know that you need them. But seek first his kingdom and his righteousness, and all these things will be given to you as well”. We need to remember that God is going to take care of us and that worrying about losing returns is secondary to seeking his kingdom and righteousness. Remember, God knew how much money you would have to invest, and which way the market would move on any given day, when he gave us his rules of money. He didn’t add in any exceptions for investing in immorality even though he knows the outcome of every stock and bond in every market in the world. So if God isn’t worried if you make lower returns with the money that he gave you, should you be? If you heart is so attached to the money that you’re investing that you’re being tempted to violate Gods rules, then maybe the stock market isn’t where you should have it invested.

Now that we’ve talked about the concerns that come to mind I’d like to answer the question. The answer is no, you do not have to sacrifice returns to invest in accordance with the bible. In fact, according to US News.com, The Timothy Plan, an evangelical Christian mutual fund company, is well out performing the S&P 500 with a five year annualized return topping 16 percent. They screen all of their holdings for alcohol, tobacco, gambling, abortion, pornography, and “anti-family entertainment”. In my experience, screening the immoral companies from your portfolio only eliminates 30 to 50 percent of publically traded companies. There are still thousands of financially sound investments available. Of course there is no telling how long any fund will continue to make profits. Look at the bottom of any brochure or advertisement that has a graph of a stock or funds performance and you’ll always see the same disclaimer, “Past performance is not indicative of future results”.

So the good news is, no, you don’t have to sacrifice returns to invest in accordance with your faith but the more important thing to remember is that it wouldn’t matter if you did. God gave us extensive rules on how he wants’ money handled here on earth along with the order that we are to “seek first his kingdom and his righteousness”, (Matt 6:33). Like everything in the Bible, when interpreted correctly, these orders will not contradict each other.

Yesterday we started a conversation about the tough questions that are asked about Biblically Responsible Investing. For the most part, the questions focused around investing in stocks. Today I’d like to talk about a few more questions that apply.

Ok, if buying a stock is buying ownership in a company, then I can see why Christians would want to avoid buying stock in certain companies. But what about bonds?

First of all, let’s cover exactly what a bond is. The Merriam-Webster Online Dictionary defines a bond as “an interest-bearing certificate of public or private indebtedness”.  Basically, a bond is a type of IOU issued by a government or company that says that if you lend them money, they will repay you what you lent, with interest, by a certain date (the maturity date).  With that taken into consideration, you can see how some of the conflicts with owning stocks in immoral companies would also apply to owning bonds. With a stock, you profit the company by buying a portion of the company for a set price, with a bond; you simply lend the company money with interest. You can see why we would want to avoid buying bonds from the same companies that we would want to avoid buying stock from.

For the sake of explanation, I’m going to give a very cut-and-dried example for both to make it clear where the conflict lies.

Say for a moment, that you were looking to financially invest in a movie studio that produces children’s movies. We’ll call it “Studio KID”. Studio KID has both stock and bonds available for purchase.  Upon closer examination you realize that the Studio KID has a branch (called “Adult Filmz”) that produces only hard-core adult entertainment on DVD and the internet. Even though it goes by a different name, Adult Filmz is owned by Studio KID and Studio KID manages and runs Adult Filmz. As a Christian, is it a biblically sound investment to buy stock in Studio KID? If you read yesterdays post then you know that the money you use to buy the stock will either directly or indirectly profit Studio KID (and therefore Adult Filmz) and not only that but you will also be an owner of Studio KID (and therefore Adult Filmz) and you profits will be made primarily due to the actions of that company. This is a problem (see Ephesians 5:11)

But what about bonds? If you buy bonds from Studio KID then you will be lending them money to use at their discretion.  The money would benefit both Studio KID and Adult Filmz, and the interest that is earned on the bonds is made from the sales and advertising profits of both studios. The same scripture that applied to profiting from immoral stocks yesterday, applies to bonds today (Deuteronomy 23:18, Ephesians 5:11).

So after breaking it down we can see that stocks and bonds pretty much go together in the sense that if it would be wrong to invest in a company’s stock, then we should probably avoid buying that companies bonds as well. But there are some circumstances where that rule won’t work. I’m talking about government bonds.  The U.S Government does not sell stock to the American people, but it can raise money by issuing bonds. This goes for state and municipal governments as well.. Most governments would never pass a moral screening. They give money to support abortion clinics, manufacture weapons of mass destruction, and profit from the actions of every company in America, good or bad (taxes). Some would say that any financial investment in any U.S. government would violate everything that the bible says about stewardship and honoring God with our finances. In some cases, that may be true. While the government does use bonds to raise money for unspecified uses (such as treasury bonds) they also issue bonds for specific projects. These bonds make it much easier to ensure that the money you lend is not going to make its way into Planned Parenthood’s yearly government grant. One of the key questions we need to ask before buying these bonds is what is the money going to be used for. Bonds for road projects or to build a state park could be considered morally neutral (depending on the details) and could be a good financial investment. But it’s important to know the details before making your decision.

Once you have the information you need, you only need to be sure that the money that our master has entrusted you with is being handled according to his orders. If you’re unsure if a company is involved in immoral actions, then your best bet is to either contact someone who can find the information for you, or play it safe and avoid investing in that company. Also, if you hire an investor to choose stocks for you, be sure to ask what software or information he uses for moral screenings and what all he is screening the companies for. If you not confident that he is investing with your Christian convictions in mind, then be sure to find someone who will. Remember, it’s not your money that your having invested. It’s the Lords,(Deu 10:14, Hag 2:8, Psa 50:10-12)  and he’s entrusted it to you to be faithful with (Corinthians 4:2, Luke 16:12).

It’s difficult to explain to my friends and family (in-laws especially) exactly what I do for a living. Not because I’m ashamed, but because there isn’t really an established job description to fall back on. Most people will get the gist of what you do if you tell them that you’re a computer programmer for a financial firm or an accountant for a retail outlet, but telling them you run Moral Money for a living usually requires a little more explaining and often times the conversation leads to some pretty tough questions.  It usually goes something like this:

Friend: So what exactly do you do for a living?

Me: I run a website called MoralMoney.com.

Friend: What’s that?

Me: It’s a specialty website that offers free information about Biblically/Morally Responsible Investing to Christians.

Friend: What’s Biblically/Morally Responsible Investing?

Me: It’s making sure that your investments line up with your beliefs.

Friend: *Shrugs* *raises one eyebrow*

Me: Ok, as a Christian, you probably wouldn’t want to make a living by profiting off of abortion or pornography. We find out what companies are involve in biblically immoral activities and offer it to the public so that they don’t unknowingly end up with one of those companies in their portfolios

Friend: Why does it matter? It’s just an investment. You’re not working for them or supporting them. You’re not even taking an active role in the company. You’re just using the company stock to invest for retirement.

Me: Well, what is a stock?

Friend: What do you mean?

Me: A stock certificate is a certificate of ownership that a company issues to raise money. Everyone who owns stock in a company is an owner in that company and has a say in the actions of that company. The money that is used to purchase the stock, whether directly or indirectly goes to support that company financially. The value of the stock, whether it rises or falls, is due, primarily, to the actions of that company. Just because you take a passive stance on investing and choose to waive your right to vote on company policy, doesn’t mean that you’re not an owner of that company and that your profits aren’t from the actions of that company.

You can see how things get complicated pretty quickly. From here, things can branch off into several areas. Sometimes they ask “What about bonds?” sometimes they say “What am I supposed to do? I only own a couple of shares?” occasionally there’s the “ok, that makes sense. So what exactly do you do again?”. But for the purposes of this post I want to take the conversation to the “But the purpose of investing is making money. God wants us to be good stewards so I don’t think it matters what companies we invest in” response.

What does the Bible say about this? Well, to start from the beginning, Jesus uses illustrations about investing for financial gain several times in his teachings (Matthew 25:14-29; Luke 19:12-26). While this doesn’t directly teach us that we should invest, it does suggest that he approves of wise investments and certainly indicates that he doesn’t forbid investing.

Now we need to understand that investing doesn’t just bring profits to the investor, it also profits the company that we have invested in. As Christians, we should not be attempting to profit from people doing what they shouldn’t, nor should we be partnering with companies who do. Ephesians 5:11 tells us “Have nothing to do with the fruitless deeds of darkness, but rather expose them”. How can we justify investing in companies who profit by marketing “fruitless deeds of darkness”?

In Deuteronomy 23:18 God gave the Israelites the command “You must not bring the earnings of a female prostitute or of a male prostitute into the house of the Lord your God to pay any vow, because the Lord your God detests them both”. This makes it clear that God does care where our money comes from and does not want “dirty money” in his temple.

But does God care if you don’t know where your money is invested or if you just give your money to a professional investor to make the stock picks for you? The answer is again a resounding yes! First of all, this is a violation of our commands to be good stewards. A good steward always takes the necessary steps to know where his master’s money is invested. As stewards, it is our duty to ensure that anyone that we entrust our masters money with is going to invest it in accordance with our master’s orders. This means choosing investors that have the ability to choose companies that do not involve themselves with biblically immoral products or actions.

In the next few posts, I will be exploring some of the most popular questions about Biblically Responsible Investing and taking them to the bible to find solid answers. If you have any questions you would like explored or you have biblical information for or against any of my conclusions, please feel free to let me know. I’m always open to new opinions.