Investing in Sin; Is It Ever Okay?
Many Christians who invest in publicly owned companies are surprised to learn that their investments give money to causes or invest in businesses that are anti-Christian. If you own the stock of a public company or have mutual funds that invest in stocks, this might be you.
Numerous companies that offer their stock to the public fund abortion businesses, as well as invest in companies that profit from pornography, gambling, tobacco or other anti-Christian activities. Several publicly held companies directly support abortion clinics and invest in fetus stem cell research. Some publicly held companies receive considerable profit from processing credit card transactions for pornography businesses. Additionally, some corporate conglomerates profit from interest in gambling, tobacco, and other activities that are contrary to some people's Christian beliefs.
If you are surprised, you are not alone. Many investors do not associate their religion with their investments. However, Christians should pay attention to how companies they invest in are spending shareholder assets.
There are varying opinions on whether Christians should be concerned about investing in what may be considered sin stocks. Dave Ramsey says, "I'm not concerned about it because when you buy stock in a mutual fund company that has holdings in a company like Anheuser Busch, you are not giving a penny to Anheuser Busch. You're actually not harming or supporting any of these companies if you happen to have a mutual fund that invests in their stock."
On the other hand, author Dwight Short says, "Investing biblically is your responsibility. As an investor/owner of publicly traded companies, it's up to you to know whether the company in which you are a shareholder measures up to God's standards." (Short, 2010)
(Dave Ramsey is a favorite financial expert for many. Dwight Short's approach to investing represents a large group of Christian financial advisors, Kingdom Advisors. Kingdom Advisors has approximately 1,272 advisors, and all of them ascribe to helping Christians invest by biblical principles.)
Dave Ramsey has done much good for people that are trying to get their finances in order. However, I'm afraid I have to disagree with his conclusion in this instance. If you read or listen further to his statement, he compares buying a stock to purchasing a used car. His opinion is that if you buy a used car, the original manufacturer does not profit, and you are not affected by how that company is spending money now.
I believe that his example is not an accurate comparison. When you own stock or a mutual fund that you own buys a stock, you do benefit directly. If that company makes a profit and pays a dividend, you get cash. If that company has a profitable or unprofitable year, the stock you own or mutual fund you own is directly affected by that company's actions.
The bottom line on whether you are investing in biblically responsible investments is based on your Christian beliefs. If you are wondering if an investment is biblically responsible, read Apostle Paul's Romans 14. In this passage, Paul is warning of the danger of criticism. He uses the analogy of food and states that if one person believes that eating one type of food over another is God's will, then they should not be criticized for their belief. Using that same logic, if you believe that owning a particular stock is against God's will, then to you that is correct. However, there are some Christians that would disagree and that is their right to disagree.
How can you judge if a stock is biblically responsible? If you are wondering if you own any stocks or mutual funds that are not biblically responsible, reading and research is the only way to understand how a publicly-owned company operates. Here is an example. The Arkansas State policy group, Family Council, has researched which companies financially support Planned Parenthood. They have determined that there are over two-hundred companies that directly or indirectly fund Planned Parenthood. If you visit the Family Council's webpage, you can see the thirty-seven publicly owned companies that have given money directly to Planned Parenthood. Several of these companies are large multi-billion-dollar companies. To Christians, funding a clinic that carries out abortions goes against biblical scripture. So, you must ask yourself the question, if you own one of these thirty-seven stocks or have a mutual fund that holds one of these stocks, do you want to continue your financial support of that company by holding onto its stock?
There are a few steps that you can take to identify investments to either sell or buy based on your Christian perspective. The first step is to determine the actions or behaviors that you disagree with based on your religious beliefs. Here is a list of ten areas to investigate within the investments that you own or intend to buy. To read a fuller description of these ten areas, you may wish to read Dwight Short's book, Kingdom Gains.
- Tobacco
- Abortion
- Pornography
- Entertainment
- Lifestyles
- Alcohol
- Gambling and gaming
- Corporate governance
- Environmental negligence
- Military (some people include this, and some do not)
If you are an investor that does your own investing and research, much of this information should be found by reading the respective company's investment prospectus and semi-annual report. Alternatively, call the company's investor relations department and discuss your concerns with their representative.
If you use an investment advisor, your advisor probably invests your assets by following a written plan that was created for you and is annually updated. This written plan is called an investment policy statement (IPS). Within the IPS there is a written justification for purchasing an investment and selling an investment. Ask your financial advisor to incorporate the above list into the types of investments you want to avoid.
If you have a 401(k) at your workplace, you may not have a choice as to which investments are available. If you are not sure if your 401(k) has investments that are biblically responsible investments (BRI), ask your 401(k)-plan representative. In a similar way that an IPS is used for an individual investor, company retirement plans have IPSs also. If there are no biblically responsible investments in your 401(k), you may ask your employer if they would add some options that may fit the BRI profile.
If you are an executive for your employer that is responsible for your company's 401(k) or retirement plan, you should be cautious about how you add investment options that are biblically responsible. The Department of Labor has an opinion on using anything but performance and expenses to determine which investment options to offer employees.
We live in a complicated world where living by Christian beliefs can be challenging. A difficult question to consider is how a Christian can avoid sin if their savings are directly funding anti-Christian causes and activities. When it comes to your investments, you should ask yourself this question and pray to God for guidance: are you an investor who is Christian, or, a Christian investor?
– Van Richards is a Christian financial advisor as well as the founder of https://www.Advice4LifeInsurance.com and http://www.Advice4Retirement.com. Van draws from his 30 years as a financial advisor to write about financial issues from a Christian perspective. You can contact him at van@advice4lifeinsurance.com.