Running head: INVESTMENTS AND THE CHRISTIAN
“Investments and the Christian Business Person”
Liberty University
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Abstract
This essay will examine various types of investing and Biblical application.
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INTRODUCTION
Investing is the life-blood of business. It can sustain a business, allow growth, and
improve a company’s public image. Unfortunately, failed investments can ruin a business. In
this essay, we will examine various types of investments including short- and long-term
investments, non-monetary investments, and personal investments. We will also examine failed
investments. Most importantly, we will explore what Scripture has to say for the Christian
business person in terms of investing.
Short- and long-term investments
Investments can be classified as either long-term or short-term. “Long- term investments
are those assets that are held for more than a year or operating cycle (Wild, pg. 151).” Long-
term investments have the potential to generate significant amounts of capital over a long period
of time. One benefit to long-term investments is that “the longer an investor intends to hold an
asset, the more attractive a risky asset will appear, because the investment is not evaluated
frequently (Benartiz and Thaler, 1995).”
“Short-term investments,” on the other hand, “are those investments that are made for
less than a year. They can produce generous gains within an ideal time frame (Wild, et al,
2012).” Nevertheless, they have a potential to be of higher risk than long-term investments.
Lessons learned from The Parable of the Talents can be applied to both long- and short-
term investing. In this parable, found in Matthew 25, two of the men wisely invested the money
they had been entrusted with and their investments earned gains. However, rather than
investing,
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the third man buried his money, and at the end of the period had exactly what he started with.
He was too afraid to take a risk. Obviously, the ultimate goal of investing is to increase capital.
Investing always contains some degree of risk, but it is wiser to take a risk than not grow at all.
Non-monetary investments
Non-monetary investments are investments in which no monetary value is put forth.
Examples of non-monetary investments include volunteer work and charitable donations.
Businesses that give to charity and donate man hours to volunteer work appear more favorably to
the public.
In 2012, a study was conducted in Switzerland to determine whether individuals would
be more likely to “invest in public good” by picking up “experimentally placed garbage” at a bus
stop if they were being watched versus not being watched (Francey and Bergmuller, 2012). The
researchers first placed images of flowers at the bus stop and noted the number of individuals
who threw away the garbage. Then, they changed the images to eyes. The researchers found that
when surrounded by images of eyes (feeling like they were being watched) more individuals
picked up garbage (Francey, 2012). Businesses that give to charity and donate man hours to
volunteer work appear more favorably to the public, so companies strategically plan public
relations, special events and media coverage to improve their businesses’ public image.
As Christians in the business world, we should have a far greater reason for doing public good
works. The Gospel of Luke presents the beatitudes—the way we as Christians should treat
others. Luke 6:38 tells us, "Give, and it will be given to you. They will pour into your lap a good
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measure—pressed down, shaken together, and running over. For by your standard of measure it
will be measured to you in return (NASB).” However, Scripture also warns us,
“Beware of practicing your righteousness before men to be noticed by them;
otherwise you have no reward with your Father who is in heaven. So when you
give to the poor, do not sound a trumpet before you, as the hypocrites do in the
synagogues and in the streets, so that they may be honored by men. Truly I say to
you, they have their reward in full. But when you give to the poor, do not let your
left hand know what your right hand is doing, so that your giving will be in
secret; and your Father who sees what is done in secret will reward you,
(Matthew 6:1-4, NASB).”
Personal investments
Personal investments are an important part to anyone’s personal financial growth. An
individual can go about many ways to invest his money to essentially work for him. Methods of
personal investing include stocks, mutual funds, bonds, and even real estate.
Understanding the reason why investing is a smart way to use your money is essential to
begin the process. While every working individual earns money at his job, that money stops
working for him at the end of the day. It is what it is. However, that money could continue to
work after hours through investments.
Can you lose money by investing? Absolutely! Proverbs 21:5 states, “The plans of the
diligent lead to profit as surely as haste leads to poverty”. When investing your hard earned
money, always make sure you have a plan. Goals are how investing begins. Look to where you
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want your personal investment portfolio to be, and then research how to get it there. Never see
something that you believe shows promise and put all of your money in that one basket. Haste in
investing can hurt more than help. Proverbs 27:23 “Be diligent to know the state of your flocks,
and attend to your herds.” After actively investing, always make sure to watch the trends of your
investments. Understanding trends and money flows is essential to positive investing. When
trends are understood and the knowledge of knowing a red flag in the market is being presented,
you will have a better chance of being successful in the long term.
Failed investments
Now that we have examined various types of investing, let us consider failed investments
and what Scripture has to say on the topic. The parable of the talents presents this question: what
will you do to increase the things God has placed in your hand? Investing always requires a
degree of risk, and sometimes loss accompanies risks. How then can we be sure we are making
the wisest decisions with investments?
Financial professors Zacharakis and Shepherd suggest an interesting paradox among
investors, particularly venture capitalists: overconfidence. In their article, The Nature of
Information and Overconfidence on Venture Capitalists’ Decision Making, they suggest that
overconfidence can lead to investment failures, but they also state,
“Optimistic overconfidence is useful for entrepreneurship; otherwise they might
not start the business. If entrepreneurs fully evaluated all available information,
they might miss the ‘window of opportunity’ or freeze from ‘paralysis by
analysis,’ (Zacharakis & Shepherd, 2001).”
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Like anything in life, there will be moments of success and moments of failure. The problem
with failure comes when we no longer learns from them. Proverbs 26:11 paints quite the picture
of repeating failure. “Like a dog returns to its vomit is a fool who repeats his folly (NASB).”
Officers and managers in business must possess the fine-tuned skill of learning from mistakes
and counting every failure as a lesson.
CONCLUSION:
As the expression goes, “A ship is always safest at the store, but that is not what it’s made
for.” So, how does all of this apply to Christian business professionals? Careful consideration of
all available data is necessary for wise investing. It is important for Christian business people
and investors to prayerfully consider these options and be wise with the resources God has given
them. They must learn from failures and humbly accept successes.
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WORKS CITED:
The Nature of Information and Overconfidence on Venture Capitalists’ Decision Making,
http://www.dailyfinance.com/2014/05/08/biggest-investment-failures-ever/
Thaler, B. a. (1955). Myopic loss aversion anf the equity premium puzzle. The Quarterly
Journal of Economics , 75-92.
Wild, S. C. (2013). Fundamental Accounting Principles. McGraw-Hill Education.
Luke. The Holy Bible. New York: Arno, 1968. Print.
"Non-Monetary Assets." Investopia. N.p., n.d. Web. 23 Sept. 2015.
