Oct 20, 2017

Does Your Conscience Have A Price? Biblically Responsible Investing In The Age Of High Return, Low Fee Idolatry.

Does Your Conscience Have A Price? Biblically Responsible Investing In The Age Of High Return, Low Fee Idolatry.

You probably remember the 1993 movie “Indecent Proposal” even if you never saw it (which I hope is the case…bleh) because of it’s infamous plot line: a billionaire offers a young couple $1,000,000 for one night with the wife. Indecent proposal indeed. The plot is brilliant, even if the movie is not, because it touches a very human issue that we all are confronted with on a daily basis: Does your conscience have a price? In our modern day of finance, where Wall Street calls for high profits and low fees above all else, the Christian investor must seriously consider whether there is a return high enough, or fee low enough, that would entice them to abandon God’s call to biblically responsible investing.

Make good choices

Everyday, moment by moment, we are forced to choose between upholding good ethics and morals, or giving in to the temptations of our more base desires. Sometimes the decision to do the right thing may come almost effortlessly, like opening a door for an old woman, or choosing to pay for your candy bar instead of stealing it away in your pocket. But it wasn’t always that way, was it? There was a time in all our lives (hopefully when we were very young!) when the temptation of the forbidden candy bar held an irresistible allure and we really had to wrestle with ourselves to ensure that candy bar did not end up sneaking out of the store in our little larcenous pocket.

When we were a child, the price of our conscience may have been scant more than a candy bar. But now, as adults, does our conscience still have a price, albeit a much higher one? Put another way, is there some payoff high enough that would cause you to accept an “indecent proposal”? In our best moments, and only by the grace of God, our answer is no. There is no payment high enough, nor penalty great enough, that would cause me to sin against my God. But in our worst moments, the answer unfortunately is yes. And often the price is ridiculously low. The Apostle Paul embodies this struggle as he was led by the Holy Spirit to write,

For I know that nothing good dwells in me, that is, in my flesh. For I have the desire to do what is right, but not the ability to carry it out. 19 For I do not do the good I want, but the evil I do not want is what I keep on doing…24 Wretched man that I am! Who will deliver me from this body of death?25 Thanks be to God through Jesus Christ our Lord! (Romans 7:18-19,24-25)

50 shades of neon

Today, the siren’s call to Christian investors is to join the world and chase high returns and lower fees no matter what. On one hand you have unscrupulous brokers promising sky-high returns with investments in the booming marijuana business, cryptocurrencies (aka. Bitcoin, et al), gold, silver and ocean front property in Arizona. These con jobs are usually pretty easy to spot, especially because the popup ads they use are about 50 different colors of neon and size 3,000 extra-super-bold font. As silly and ridiculous as these gigs are, there are many who fall prey to their allure of greed. I know because some have come seeking my advice after losing their shirts.

But what about other businesses, such as abortion and pornography? If you asked the average Christian investor if they would consider buying into the porn business, they would probably (hopefully!) say no. But, if you asked the average Christian investor if they would consider buying into the porn business for a 100% annual return on their money…well…

I submit to you that this scenario is playing out every single day with Christian investors around the world, except instead of 100% annual returns, Christians are selling out for much, much less. In fact, in some cases they are selling out for less than the price of a candy bar. Allow me to explain.

King Solomon talks biblically responsible investing

Let’s say you have $50,000 to invest. Where will you put it? Many investors, including Christian investors, will end up buying a mutual fund or ETF (exchange traded fund) of some sort. Maybe you would choose the highest performing actively managed fund you can find, or maybe you would focus on investing in the lowest cost index fund available. In either case, you would sensibly be trying to maximize your return (either through stellar investment management or by saving money on fees), but is that a biblical approach? Now, there is nothing wrong with investing in high performing funds, and certainly there is no problem with keeping fees low with index investing (I happen to be a fan), but for the Christian investor there are other — and I dare say more important — issues to consider, namely those of biblical morals.

Hear the words of Solomon, “Better is a little with righteousness than great gains with injustice.”(Proverbs 16:8) In this verse and others like it, the Bible’s clear teaching is that righteousness is more important than financial gain. Biblically responsible investing (BRI) is the practice of making biblical values the first priority in investment decisions as an obedient act of worship for the glory of God. This means aligning your investments with biblical values, avoiding companies involved in immoral businesses like abortion and pornography, and instead choosing investments in companies which are a blessing to their customers, communities, workforce and the world — and then taking into consideration maximizing returns and minimizing expenses within the context of the available, biblically responsible investment options.

The problem is that by and large, Christian investors have gotten this process backward. They heed the advice of Wall Street first and God second. (That is never a good idea, by the way.) They put first priority on finding the highest performing, lowest cost investments without giving thought to the moral concerns of those investments…or if they do consider biblical values it is only as an afterthought and results in a portfolio that might employ a few screens, such as tobacco or alcohol, but falls far short of the standard of diligently stewarding God’s assets in accordance with his values for His glory. We have caved into the demand of this age that we fulfill our “fiduciary duty” to keep fees as low as possible and returns as high as possible, and abandoned our first and eternally more important “stewardship duty” to “honor God with your wealth.”(Proverbs 3:9) We have been “conformed to the pattern of this world”(Romans 12:2) and are bowing down to the idols of low fees and high returns.

And, by the way, just because you put biblical values first does not mean that you must sacrifice returns. Recent research by Wharton School of Business, Oxford University and Biola University all have concluded that employing values based screening like biblically responsible investing does not negatively affect performance…in fact, they find that screening actually can help improve performance. Some critics say biblically responsible investing advocates use the Bible as an excuse for charging higher fees or being lazy about choosing quality investments. I disagree. I think those critics use low fees and the ever-elusive seduction of higher returns as an excuse for their financial idolatry.

Now what about that candy bar?

To make matters worse, the price we have accepted in this compromise of financial idolatry is often pathetically small. Going back to that $50,000 investment you have to make, let’s say that you chose to invest in a very low cost fund that had a total expense ratio of 0.10%. And let’s say that there was an equivalent, biblically responsible investing fund with an expense ratio of 1.00%. That means that you chose to prioritize lower fees above biblical values for a total savings of 0.90% per year. Putting that into dollars, that means that you decided to invest in abortion, pornography, human trafficking and other immoral industries instead of honoring God first for a total annual savings of $450/year ($50,000 x 0.009 = $450). That is just $1.23 per day…the price of a cheap candy bar.

But, you might say, what if I have much more than $50,000 to invest? My savings would be higher than just a candy bar! Yes, this is true. If you have more than $50,000 to invest then your nominal savings goes up some, so maybe your price to sell out on God is a latte per day instead of a candy bar. Or maybe you have millions of dollars to invest and your savings would be measured in thousands of dollars. Maybe you have so much money that your savings would be, oh, let’s say an even $1,000,000. Is that a high enough price for you to accept the “indecent proposal” of Wall Street billionaires?

Wall Street would applaud your “wisdom” as a “good fiduciary”. The Bible would call that idolatry.

Grace, truth and biblically responsible investing

Now, let me be the first to confess that I invested as an idolater for years, never realizing that I was investing in and profiting from the vilest sin and immorality the depraved human mind can conjure. And I want you to know that I have a lot of grace for those still investing the way of the world, because I know that most Christian investors are just like I was, unwittingly investing in atrocities because they have never been taught to think biblically about their investments. And this is exactly what needs to change.

We need to heed the call in Romans 12:2, “Do not be conformed to this world, but be transformed by the renewal of your mind, that by testing you may discern what is the will of God, what is good and acceptable and perfect.” We need to extend grace to our brothers and sisters who are caught up in the world’s ways, and at the same time we need to understand that ignorance is not an excuse. In the words of the Apostle Paul, we need to:

“…equip the saints for the work of ministry, for building up the body of Christ, 13 until we all attain to the unity of the faith and of the knowledge of the Son of God, to mature manhood, to the measure of the stature of the fullness of Christ, 14 so that we may no longer be children, tossed to and fro by the waves and carried about by every wind of doctrine, by human cunning, by craftiness in deceitful schemes. 15 Rather, speaking the truth in love, we are to grow up in every way into him who is the head, into Christ,16 from whom the whole body, joined and held together by every joint with which it is equipped, when each part is working properly, makes the body grow so that it builds itself up in love.”(Ephesians 4:12-16)

And it starts with you. It starts with looking in the mirror of God’s perfect word, submitting to the call to “do all to the glory of God” (1 Corinthians 10:31), including managing your investments, and then making the change to become a biblically responsible investor who puts righteousness and biblical morals in higher preference than fees and performance. And it continues by you doing your part to “equip the saints for the work of ministry” and sharing what you have learned about the importance of being obedient to God with your investment decisions with the other Christians in your life. Will you join us?

Beloved Christian, Wall Street is beckoning you to invest in immoral industries with the ephemeral allure of higher profits and lower fees. What is your answer to Wall Street’s “indecent proposal”?



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*Advisory Services are offered through Inspire Investing, LLC, a Registered Investment Adviser with the SEC. All expressions of opinion are subject to change. This article is distributed for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their financial advisor prior to making any investment decision.
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