Published on 10/11/22
HOW SHOULD CHRISTIANS INVEST?!?!
The title question of this post is one that C3 is wholly concerned with. It is essentially why Christ Centered Capital was started. Some may say that it is a difficult question to answer but C3 strongly believes it is an easy question to answer if some basic Christian morality is understood.
When a Christian invests money into something, there are five main points/ideas to keep in mind.
- The Christian should not reap where they do not sow. (Galatians 6:7, 2 Corinthians 9:6, Matthew 25:25, )
- The Christian should not participate in Speculation. (Jeremiah 17:11, CCC 2409, Catholic Encyclopedia on Speculation)
- The Christian should not participate in Usury. (Exodus 22:24, Leviticus 25:35-37, Deuteronomy 23:20-21, Luke 6:34, Session X of Fifth Lateran Council, Vix Pervenit by Pope Benedict XIV)
- The Ends can never justify the Means. (CCC 1759, 1761, Romans 3:8)
- What is the intent of the investment.
- Does the Investment support the Common Good?
Okay, I know what you are thinking. This is way too much and way too hard! Do we really have to think about all this before we make an investment? Of course, we do! We are Christians. The narrow hard path is how we get to Heaven. But this path does offer something no other path does, namely Joy and Content.
I think when given serious thought, the above six points are pretty straightforward and do not require a Ph.D. in Christian Philosophy to discern. So, with these points in mind let’s take a very brief look at some typical investment options that we have at our disposal in today’s economy.
C3 has of course written pretty extensively on this subject in the past. If you have not read our recent post on why the Stock Market is immoral, we suggest you check it out HERE. The reasons C3 and many authority figures from the Church think that the stock market is immoral is that it fits with the definition of speculation and is widely considered reaping where one has not sown. The Stock Market is also something that is arguably bad for the Common Good.
The Stock Market is not tied to the production of any real goods and is essentially the practice of buying low, adding no value/doing no work, and selling high for a profit. This is obviously reaping where one has not sown. Buying a Stock and hoping it goes up is being a willing participant in the broader manipulation of a market that consists of no material goods and does not actually produce anything except an incentive to become more engrained with the market.
The Stock Market has been marketed as a means to secure one’s future, but not the future we should be primarily concerned with as Christians. We are convinced that we should be fearful of how we will provide for ourselves in our old age by market influencers and coerced into investing into the market in one way or another. However, the stock market has played a role in the decay of the nuclear family through financial dependence on institutions rather than family, forcing the average person to be overly concerned with material goods and the ever-looming tomorrow, and promoting the life of the trader who buys low and sells high without producing anything of necessity as the ideal we should all pursue. All of these things run counter to the ideal Christian life and have led to the bleeding of the Church.
The Stock Market has not been directly condemned by the church, but if a Christian wants to participate in the stock market, then the above-listed questions should be asked and answered honestly in accordance with a well-formed Christian conscience. Just because the Church does something or has not explicitly condemned something in our ever-evolving world does not make that thing morally just.
Investing into digital currency is something that requires a hard look at the intent of the investor in order to discern the morality of the investment. If we are buying crypto like BTC with the sole purpose of selling it at a higher price at a later date then we do nothing different than what we do when we buy a stock. However, if we think that digital currencies that are decentralized are and should be the future of exchange and we want to promote this new form of exchange because we view government-issued fiat currencies as corrupt and easily manipulated, then buying crypto in order to promote its use could be completely acceptable regarding the Christian ethic.
However, a deep dive into crypto should be done. Is crypto in itself moral? Crypto has its pitfalls like using too much energy and still having issues with manipulations by whales. It could also eventually be regulated by governments which would result in the same issues being taken with fiat currencies. Perhaps these issues of energy consumption and possible manipulation are the lesser of two evils when compared with corrupt inflation-ridden fiat currencies. That is a topic for another day and the point of this post.
The point of this post is to say that investing in crypto could be morally justified if the point of investing is to better the economic system with a more suitable form of exchange. Yet, investing in crypto that is done solely for selling at a profit at a later date falls into the realm of reaping where you have not sown and is therefore immoral. Intention and the common good are everything.
When someone invests in Gold, Silver, Lumber, or any other raw material the all-encompassing question of why must be asked. Are we investing into Gold because it is thought to be a good hedge against inflation and will protect our capital against corrupt governments? Are we investing in Lumber because we know we can sit on it and sell it later for a profit? In either circumstance did we do any work like cutting the lumber or mining the Gold? Or did we just pay for it and do nothing to it? These are the questions that will give you an answer as to whether the investment into a raw material was moral.
Of course, the argument made for the moral investing of crypto could also be made for metallics and other raw materials. Maybe you think that Gold should once again be the standard of exchange and you buy it because you want to promote it as such. There is nothing immoral about this. Perhaps metallics are even more moral than cryptos because they are more tangible and less abstract. Abstractions that are divorced from physical reality are things that should be handled with caution according to some philosophers and theologians.
If you are the one who cuts down the Lumber and stores it and treats it so it does not lose its utility and you later sell it for a profit then there is no ill done. You are reaping where you have worked.
However, if you buy Gold and just sit on it and wait for an opportune time to sell it for a profit with no real intention of providing for the common good then this is morally questionable at best.
Investing in land, homes, or buildings is one of the most moral ways to invest if you don’t become a slum lord and work the property so that it can provide something of good to society. Land/property that you buy and do nothing to with the sole purpose of selling for a profit is morally questionable (Starting to see a trend we hope). However, if you buy a house with the intent of fixing it up but never get around to it because of life getting in the way, and you one day decide to sell it as is and you earn a profit on the sale because the market value went up then this is not immoral because the intent was good and the market conditions dictated the selling price. You should have worked the house and added value to it, but as we keep saying, the intention is everything.
What about REITs? Investing in real estate is only moral if you can actually work the property and add value to it. Adding value to something is the lynchpin of all this talk about moral investing. If you can make the case that you added value to something then the investment made is probably a moral one. However, with a REIT you are just putting in money to something, doing no value-adding work, and expecting a return. This is reaping where you have not sown and should not be done by the Christian.
Let’s wrap things up
A way to summarize this post and others that C3 has made is that putting money out, doing nothing, and getting more money back is immoral. If you want to be a moral Christian investor then you should always add value to something if you expect a return. But why exactly is it wrong to get money without doing any REAL work? There is a long philosophical/society-driven answer and there is the short because the bible more or less says so answer. You can go to your bible app or search online for verses on reaping and sowing and working and you will get your answer. But if you want the longer more philosophical answer, we will do our best to sum it up in the next paragraph.
When someone is paid for doing no real work (i.e. adding value to something like fixing up a house, repairing a car, creating a website, administering a massage, cutting hair, etc…) that person is incentivized to continue to do no real work because of the greedy and slothful human nature that exists in all of us. If a society is incentivized to do no real work, or if doing no real work is propped up as the goal of this life then what type of fruits do you think that society will produce? Will fine art, good music, culinary masterpieces, amazing scientific discoveries, mind-blowing philosophical ideas, and amazing feats of physical greatness be the result? Or will dependence on greedy and corrupt financial institutions, a materialistic society, increasing rates of depression, anxiety, and suicide, a decaying nuclear family, and a bleeding church be the result? The concept of doing no real work and earning profits is relatively new to the world and has changed the game on how people can live and survive. Some good has come from this economic revolution like bringing people out of poverty and feeding the poor but these good ends cannot justify the means and they are not the only ends we must be concerned with. The ends of separating families and killing children because they we would get in the way of us making a good living is undoubtedly a result of this economic revolution. Matthew 19:24 says “Amen, I say to you, it will be hard for one who is rich to enter the kingdom of heaven. Again, I say to you, it is easier for a camel to pass through the eye of a needle than for one who is rich to enter the kingdom of God.” Our Lord speaks these words for good reason. Becoming Rich (as we all are in this first world of abundance in which we live) is too often a barrier to obtaining Spiritual Goods. Think about what a greater barrier becoming rich off doing nothing will be if simply being rich is so great a barrier.
We as the Body of Christ may not have an easy road when it comes to investing when compared to the secular population of the world but if our sights are set on Heaven and not just being able to vacation in our 70s then it is a challenge we should gladly accept.
You mentioned selling a piece of property that you had intended to improve, but weren’t able to, at market price. Why market price? Shouldn’t you max out your sale price by indexing it to broader inflation?
For example: I buy a piece of undeveloped land 30 minutes outside of town for $100,000 intending to make it tillable and sell for a profit. Due to unforeseen circumstances, I am unable to develop the land for 10 years and finally decide I do not actually want to own the land. Let’s say that broad inflation was 3% during all 10 of those years, but suburban sprawl toward my property caused the land to increase at 6% per year.
Market price at time of sale would be $179,000, but it seems that this would entail reaping where I had not sown since no work was done to the property.
Using 3% price growth per year I could sell the property for about $134,000 (or maybe a couple thousand more to account for property tax).
Am I thinking about this properly or missing something?
Side note: How would you recommend calculating inflation? I’ve done some research recently on CPI and it seems like it is designed to produce a lower inflation number than truly exists. Do you have any more accurate resources for this?
This is a fair point but remember that you have been paying property taxes on this hypothetical property as well as being responsible for it if some issue may have arisen like an environmental issue or people trespassing and getting hurt in some way. So even though you have NOT done work to the land that you intended to do you were still paying for the land and we’re responsible for it. This is worthy of some compensation and market value seems to be as good of a metric as any other, otherwise we may run the risk of being too scrupulous and obsessive. However, if you intend to sell the land at an even fairer price because of your convictions, then from a moral perspective this could not be frowned upon.
When you buy something like a stock you are taking on risk but there is no chance at doing work and the risk you take on is different from that of a potential law suit and mandatory property tax payments. A good moral comparison of this situation would be to the conjugal act of an infertile couple that is lawfully married. The couple may still engage in the conjugal act because an assumed intent and openness to procreation can still exist since they are using the act for its god given purpose. A more articulate mind could make this analogy more eloquently but I trust you get the idea.
The rate of inflation is a tricky one and we do not have a great answer on this. More research will be done.
Are you talking mainly about what you decide to do as your career? What about retirement? I worked hard, saved and invested in retirement funds my working years so I would not have to worry about retirement.