Q:
I’m sure this has been asked of you before, but I wanted to know what Biblical rationale can I use to invest in the stock market? I was just thinking this morning about my 403(b) plan and how it is very aggressive with stock. Stocks are risky and that means taking a gamble. How is investing in the stock market any different from going to Vegas and gambling?
A:
I think that stock market investing done the wrong way could be the same as gambling. As managers of what God has given us, He has charged us with the responsibility to be prudent when it comes to what He has given us and what He still owns.
Let’s start off by looking at the definitions of gambling and risk and then see how they are two different things.
Gambling, according to Wikipedia, is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.
Risk can be defined as the probability that an action or event will negatively or positively affect a person’s financial goal. When you take risk, there is either a high or a low probability that you will make or lose money.
When you gamble with God’s money, you are taking high risk because in most cases you put yourself in a situation where the probability is high that you will lose it all. More importantly, we have to look at why we gamble in the first place. We gamble because of greed. We want to get as much as possible for doing as little or nothing in a short amount of time. The Bible doesn’t specifically address gambling. However, Christ warns us about the chief reason we gamble which is greed. “Beware and be on your guard against every form of greed” Luke 12:15.
So, you have to look at why you are investing. If your motivation is to make as much money as quickly as possible and you are willing to use God’s money to do so, you have to stop and check your motivation. Is this about greed (earning something for nothing in a short-time period with the potential to lose it all) or is this about taking care of future financial goals for you and your family (1 Timothy 5:8).
It is all about how you approach risk when it comes to investing. Remember, we take risk because we want to make our money work harder for us. At the same time, we have to be prudent about taking risk. If we had all of the money in the world, you would not need to take risk. You could have the luxury of putting your money in riskless investments. If you are going to take risk, you can gamble or approach it like a prudent steward and understand, learn to invest and manage for risk.
Tags: Bob Brooks, Deceptive Money, gambling, God, Investing, Prudent Money, risk, stock, Stock Market
August 27th, 2009 at 9:54 am
Excellent point and very well put! Many would benefit by reading this.
August 28th, 2009 at 10:57 am
Okay hypothetically speaking, I took my money, did my homework, invested in what appeared to be a sound investment, and lost it. I pay tithes cheerfully, I gave and continue to give alms, why would God allow me to lose or any Christian for that matter? We lose, we gain, we lose we gain, some lose all, some gain much. That’s the risk we take with investing and no matter your intent, at the end of the day our intent is to gain money by hoping that the company you’ve invested in is productive sounds like luck to me just on a long term scale. But what if that company is involved in some illegal activity that we can’t see on the surface and they eventually get caught and the stock tanks? I see the scriptures pointed out above but I can’t see them being clear as to whether investing money in a hope that is risky is wise. I think our investments should go toward sound Christian organizations/companies etc. I think Christians should involve ourselves with a barter system so we won’t have to invest in the potential “ponzy” scams of the World. Although God has His hand on our lives, I think He may draw the line at investing in stock. I’m not absolute in that idea, I’m just thinking of how the chance to lose money is always present and if the chance is always present (no matter how much homework we do about the investment) then would God really consider that wise? I’m really looking for solid answers. What keeps me at odds is this past economical crisis we’ve entered, I lost a lot, but when the market leveled off, I gained it back and a little more. How can I be confident that investing in the market is wise, especially if the risks do not decline. What would I have been able to do and I was close to retirement and took a loss like that, would I have been able to say, that was a wise investment? Forgive my rambling, I tend to type what I think without organization. But I think I’ve expressed the jist of my delimma.
August 31st, 2009 at 9:43 pm
Sekou – very well thought out – Let me unpack this and keep it on a broader scale. First of all, we keep God involved in all of our investments. We don’t make an investment without God’s peace. Second, investing is going to be the best way that you ultimately take care of the future of your family. Third, and here is the missing piece I think that effects all investors, you have to learn how to invest in a bear market. There are principles to learn so that you can indentify risk and know when to get out of an investment just like you invested in an investment. In other words, you need to learn how to protect God’s money just like you studied to invest God’s money. Believe it or not you can make money in a bear market. You just need to learn the principles behind doing so. Unfortunatley, the financial services industry doesn’t want you to attempt to manage your money. They would rather you just buy and hold. THere was a part II to my response to you. I just didn’t get around to writing it yet. Keep watching the blog – There is a lot to learn about investing to do it the right way. I have been investing and managing since 1992 and still learn everyday. You never figure it out. You just keep learning. It takes hard work and discipline. However, anything that God asks of us takes hard work and discipline. It is funny. I was just telling someone that I really wanted to write a book on this very subject. I hope that it is my next book project. I have a philosophy that I go by. When we get frustrated with anything in our lives, it just means there is more that God wants us to learn. Why would God allow you to lose or any Christian for that matter? That is just life. God allows life to happen and doesn’t allow anything to happen that He thinks that we cannot handle.
August 31st, 2009 at 10:12 pm
Joe – always appreciate the kind words
September 1st, 2009 at 8:39 am
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