We make transactional decisions based on our values every single day. Think about it. You spend time with your loved ones because they are valuable to you. You might pay for private school or college because you value the education. You even buy certain food because it gives you the value of nutrition and enjoyment. Why shouldn’t we extend a values-centered approach to our investments, too?
All too often, people invest with the singular goal of profitability. But thanks to a practice called Biblically Responsible Investing (BRI), you don’t have to sacrifice your values for financial returns. BRI is for people with a Judeo-Christian worldview who desire to align their investments with their beliefs.
This blog post will provide answers to five of the most commonly asked questions about Biblically Responsible Investing. Let’s start simple–what is it?
1. What is Biblically Responsible Investing?
Biblically Responsible Investing (BRI) is a subset of Values-based Investing (VBI) that considers the overall impact of a company or investment fund–not just its profit potential. This doesn’t mean that biblically responsible investments are less profitable than ‘normal’ investments. In fact, the opposite has been proven in several cases, but we’ll get to that later in this blog post!
As a Certified Kingdom Advisor, we would define Biblically Responsible Investing as “Investing that seeks to please and glorify God as a vital act of worship.” So, how do we invest in a way that pleases God? Biblically Responsible Investing portfolios do two things. First, they screen out companies (or funds) whose products or business practices violate Christian values. For example, they exclude companies that prey on human addictions such as alcohol, gambling, tobacco and pornography. They also screen out investments that support abortion, violate human rights, and contribute to bioethical issues.
Secondly, BRI prioritizes companies whose products and practices promote human flourishing! For example, Tim Macready, the Chief Investment Officer at the Australian pension fund Christian Super, intentionally invests in companies that provide capital to factories that produce goods, to enterprises that deliver health and educational services, and to infrastructure such as roads and networks that enable the efficient transfer of goods and services. He writes, “These enterprises form the backbone of the economy, creating jobs and playing an important role in exercising creation care.” Similarly, a Certified Kingdom Advisor® will help you discover how you can use your investments to support the causes you feel called to.
2. How is Biblically Responsible Investing Different From Socially Responsible Investing?
Socially Responsible Investing (SRI) and BRI are both ways for investors to include their personal beliefs into their financial plan. According to NerdWallet, Socially Responsible Investing is an investing strategy that aims to generate both social change and financial returns for an investor. In that sense, Biblically Responsible Investing are both forms of Values Based Investing. However, BRI portfolios often reflect different values, priorities, and convictions than traditional SRI portfolios. This is because BRI portfolios intentionally aim to adhere to a biblical worldview.
Technically, BRI is the oldest known form of impact investing. In Biblical times, ethical investing was required by Jewish law. The word Tzedek (justice and equality) is often referred to in the Pentateuch (the first 5 books of the Bible), and it is composed of rules to correct the imbalances in creation human’s cause. Then, Methodists started BRI in the United States in the 18th century. They resisted investing in companies that benefitted from the slave trade, smuggling, conspicuous consumption, liquor, tobacco, or gambling.
SRI came onto the scene about two centuries later. During the Vietnam War, protestors demanded that university endowment funds stay away from investing in defense contractors. Then, people used their buying power to avoid investments in South Africa during apartheid. The legislative and institutional change that came about afterwards stoked SRI’s popularity, and it has been on the rise ever since.
SRI portfolios tend to be left-leaning politically and do not screen out certain investments that BRI portfolios would, such as abortion. In addition, a Certified Kingdom Advisor® can help you build a BRI portfolio that directly supports biblically minded businesses and funds.
3. Why is Biblically Responsible Investing Important?
Throughout the gospels, Jesus is adamant about bringing darkness into the light. For example, Luke 12:2 says, “Nothing is covered up that will not be revealed, or hidden that will not be known.” As Christians, we should seek out truth just like Jesus did. There are simple ways to discover if a company upholds the values that are important to you, and Certified Kingdom Advisors® can help you do so.
Once you know the truth, it is your responsibility to act accordingly. When you invest in anything, you obtain a degree of ownership. Take stocks, for example. When you buy stock in a company, you become a partial owner and provide upward support for the stock’s price. When others purchase the same stock, its value goes up as well, and you benefit. So, if you buy stock in a company with unethical practices, you contribute to and benefit from the immoral company’s success.
Ultimately, BRI can help steer you towards an integrated lifestyle where your faith is evident in everything you do. BRI can do more than safeguard your own spiritual well-being, though. Money talks and pressure from investors can lead to change. If enough people demand biblically responsible practices through the power of their purchases, the business world will change to look more like the Kingdom of God. Imagine a marketplace fueled by the common good and human flourishing rather than greed! Of course, that’s the vision that Jesus taught us all along: “On earth as it is in heaven,” (Matthew 6:10.)
4. Can Biblically Responsible Investing Still be Profitable?
Not only can Biblically Responsible Investing be as lucrative as ‘regular’ investing–it can be even more profitable! In 2020, The Christian Investment Forum (CIF) compiled the results from their 15-year research study regarding faith-based funds. The study compared mutual funds managed by CIF with the category averages. They found that the Biblically Responsible portfolios produced an average return of 7.1% whereas the category average for the non-BRI portfolios was 6.3%.
This profitability shouldn’t come as a surprise. The investment professionals who create BRI portfolios go through the same training as their secular colleagues. For example, Certified Kingdom Advisors® go through rigorous training and must have certain approved certifications such as CPA, CFP, JD, or 10 years of experience in their field. There really is a win-win scenario here–you can advance the Kingdom of God and care for your family’s financial future at the same time!
5. How Can I Start Investing Biblically today?
We thought you’d never ask! Our team at Clear Money Path is equipped with biblically-minded professionals who have extensive experience in creating successful BRI portfolios. Schedule a free consultation with one of our Certified Kingdom Advisors® to find a solution that’s best for you. In 15 minutes, we’ll discuss a plan for how you can begin Biblically Responsible Investing, build wealth, and meet your lifestyle goals. We can’t wait to start making a difference together.