If Christmas is the most wonderful time of the year, you could call these few weeks after Christmas the most *introspective* time of the year. This is a time when we can resolve to live with greater faith and purpose. And this should include our investing. We’ll talk about that today with Jason Myhre.
Jason Myhre is the executive director of the Eventide Center for Faith & Investing, an educational initiative of Eventide Asset Management, and an underwriter of this program.
- The Bible tells us that “the mercies of the Lord are new *every* morning” (that’s Lamentations 3:22-23). And if they’re new every morning, how much more are the mercies of the Lord new with each new year we’re granted life?
- On today’s program, Myhre shares his own personal reflection and goal-setting exercise for us today. He says January is a great time for some personal assessment and goal-setting.
- ASSESSMENT AND GOAL-SETTING
- If you’ve ever done one of these new year assessments, you’ll know that many of tools out there encourage us to break life down into different categories for reflection – our finances, a category; our faith or spirituality, another category; our work goals; our family life; our health; fitness; recreation; hobbies; etc.
- Breaking things down like this into separate categories can be helpful in isolating parts of our lives for closer assessment and reflection, but it can also create divisions between our faith and parts of our lives, which are not really separate.
- For example, assessing our finances separate from our faith can lead us to miss the way in which financial decisions have very real moral and spiritual dimensions to them. Something I know MoneyWise is all about.
- Faith should really be the lens through which we consider each area of our lives. And it’s important to consider investing in this way.
- If we were to ask you to make a personal assessment of how well you think you're doing with your investing, where does your mind go? Most people’s minds would go to things like, ‘Am I saving *enough* for retirement?’ That’s the question that we’re bombarded with in education on investing today. And we all feel behind and bad about it.
- Now, this is not a bad question to ask. And it can prompt spiritual reflection. Good stewardship after all involves planning, sacrifice, and diligence. And so that kind of question is not totally misguided. But still, there are other deeper, more incisive questions to consider.
- But even when we ask spiritual questions about our investments, sometimes we can still stay at the macro level.
- For example, if We were to ask you to do a spiritual assessment of your investing life, what would that bring to mind? For a lot of people, it would bring to mind questions about our vision for retirement – whether we’ve bought too much into the mirage of the American dream of comfort and indulgence, and leisure.
- VALUES INVESTING
It’s also important to think about how our investments align with our values.
- Ben Nicka, one of the contributing authors at the Eventide Center for Faith & Investing, offers this investing examination:
- First, write down all your investments – your stock investments, bonds, cash, or whatever – and the rough percentage you have allocated to each. Next to each category, add a sentence detailing the rationale for the composition of your investments.
- For purposes of illustration, we’ll share Ben Nicka’s responses (with permission).
- Here is the list with corresponding rationales.
- Cash. 20%. Held at Synchrony Bank, which is convenient and pays high-interest rates. The 20% allocation is high but reflects skepticism about the markets and savings for a down payment.
- Stocks. 40%. Held primarily in low-fee index funds from The Vanguard Group. The rationale here is that index funds have generally shown to outperform most actively managed mutual funds on an after-fees, long-term, risk-adjusted basis. They are recommended for the ‘average investor’ by many investing experts, including Warren Buffet.
- Bonds. 20%. Held in mutual funds again managed by Vanguard. This allocation, perhaps high for Ben’s age, again reflects his skepticism about the markets.
- And finally, a cash balance pension. 20%. Ben is very fortunate to have such a benefit at this employer. He has no knowledge or way to know how this pension is invested.
- What should be clear from Ben’s investment illustration is the logic of his investments is clearly toward risk and return factors.
- But now, make a second list. On the second list, write down all your philanthropic investments, including the rationale, just like before with your investments.
- Again, we will offer Ben’s own list, for illustration.
- Local church. 70% of giving. Ben says his local church plays an irreplaceable role in his family’s and other families’ lives and he is proud of his local church.
- The disadvantaged and unfortunate. 23% of giving. Here he gives to Open Hands Legal Services, which provides free legal representation in New York City, a city he has connections to, and pushes back on those using the law to abuse and exploit the needy. Also in this category is Jericho Ministries and Community Emergency Service, in Minneapolis, another city he’s connected to, which provides goods and services to those in need, materially and spiritually.
- Another category. Giving to practical theology. 7%. This goes to Christian Counseling Education Foundation, which funds intellectual work and counseling in Philadelphia, and supported the work of one of Ben’s favorite thinkers, Dr. David Powlison.
- And finally, a few miscellaneous gifts from bonus and tax returns.
Which go to A House on Beekman, which serves children and families in South Bronx and a Christian formation center at the University of Minnesota called Anselm House.
- Now the introspective question is this. What do you notice when comparing the two lists and corresponding motives?
- It’s clearly a very different thought process for each list.
- For Ben’s philanthropic investments, he has a very detailed understanding of the activities of each organization he supports, and morally approves of, even boasts (in a good way I think) of their work, which he believes contributes to societal flourishing and justice. And if these organizations turned from their core convictions and commitments to serve, Ben conveyed that he would cease his investments.
- Now contrast that to his investments in stocks and bonds, etc. There he has no knowledge of the companies he is supporting, much less their activities. Why not? Because to invest in index funds is a passive approach to investing: he has handed over the ability to direct his investments to specific companies in favor of portfolios that track the broader markets more generally.
- Ben notes that his approach to equity and bond investing is also morally passive in that it entails simple indifference to the moral quality of the work performed by the companies he supports. His investment strategy considers only risk, return, and convenience. Notably, if he leaves his funds so invested until he retires, he will have supported the work of these unknown companies for nearly 50 years(!) without truly knowing or engaging with the inherent good or otherwise of their products and services or how they impact their customers, employees, suppliers, communities, or the environment… reflecting simple indifference to the flourishing and justice (or their opposite) created and sustained by his investment. Again, these are his assessments.
- Ben’s cash position invested in Synchrony Bank, boasts it is “the largest provider of private label credit cards in the United States” and that it also helps consumers finance clothing, jewelry, motorhomes, hobbies, and furniture. His cash holdings are being used for credit card and general consumer finance. Ben’s personal conviction is that most credit card lending is morally reprehensible and along with nearly all consumer finance encourages unnecessary consumption. He was ignorant of the work his money at Synchrony was doing when he opened the account. However, when he did this assessment exercise, Ben noted that given the ease of discovering how his funds were being used, there is an air of moral culpability to his choice here.
- Hopefully this exercise reveals to us the difference between the way we choose our investments and the way we give our money to charitable causes.
- While it’s appropriate and essential to consider risk and return for our investing decisions, the exercise also highlights a common blindspot with investing today. Namely that we often fail to consider the ways in which our investing has very real moral and spiritual dimensions.
- So, this assessment should lead us to ask ourselves, ‘In this new year, how can my investing choices be guided more by my faith?’
- The goal of such an exercise is to get us to consider the ways in which our investing dollars are having an impact in the lives of our neighbors and the world, for better or for worse, through the specific businesses we support through our investments. And to desire to move our investing toward companies whose products and practices honor God and serve our neighbors and creation.
- You can get a copy of this investing worksheet exercise at faithandinvesting.com/faithfi. And you’ll also find many other resources there for bringing your faith to your investing.
On this program, Rob also answers listener questions:
- How do you go about investing in a way that aligns with Christian values?
- How can you receive the Social Security benefits of a deceased spouse?
Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to Questions@MoneyWise.org. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.