SMI on the Radio: 9 Biblical Principles for Investors (audio & transcript)

Mar 15, 2022
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With the market wobbling, it’s a good time to review basic principles!

On Moody Radio’s MoneyWise Live, SMI’s executive editor Mark Biller discussed nine foundational truths that can help you be a wise and faithful steward in your investing — through good times and bad. Mark also took questions from callers.

Audio is posted below. Scroll down for a transcript.

MoneyWise Live with host Rob West airs weekday afternoons.

For more radio appearances by members of the SMI team, visit our Resources page.


Transcript

Rob West:
Hi, I’m Rob West. Knowing and applying God’s financial principles in your investment decisions will make you a better steward of his resources and give you peace of mind. I’ll talk about those principles today with Mark Biller.

Then it’s on to your calls at 800-525-7000. This is MoneyWise Live — biblical wisdom for your financial decisions. (theme music ends)

Well, it’s always a pleasure to have Mark Biller on the program. He’s the executive editor at Sound Mind Investing, where they always apply biblical principles in their investment decisions. Mark, welcome back.

Mark Biller:
Thank you, Rob. Glad to be back with you.

Rob West:
The SMI newsletter had an article this month that focused on nine biblical principles specific to investing. Take us into that article a bit and perhaps frame up the big picture for it.

Mark Biller:
Yeah, absolutely. Rob. So it really all starts with a single big idea and that is that the Bible teaches us to live differently. You know, Romans 12:2 says, "Do not conform to the pattern of this world, but be transformed by the renewing of your mind." And that applies to all the different aspects of our lives, which includes how we invest. So, you know, Scripture isn’t specific, obviously, on whether we should choose a Roth IRA or a Traditional IRA, but it does give us a lot of principles that can — and really should — guide us in how we invest. So we identified nine of them for this article. Some of ’em are really familiar to your listeners. I’m sure others, maybe not quite so much.

And the first one, the first principle is that we need to know what our role is. You know, our culture is constantly telling us that we own our stuff, but the Bible says otherwise. Psalm 24 tells us clearly, "The earth is the LORD’s and everything in it, the world and all who live in it."

And so acknowledging God’s ownership of everything is really the essential starting point of biblical stewardship. And that should be our starting point for our investing as well. We’re stewards, we’re managers of whatever got God chooses to entrust to us temporarily. And that means we need to be investing for God’s purposes and according to his principles.

Rob West:
Yeah, that is the foundation. There’s no doubt about that. Tell us what’s next.

Mark Biller:
The second principle for investing here is that we should pursue multiplication. And that comes out of the Parable of the Talents. Most of us are familiar with that from Matthew 25, where Jesus uses the story of a wealthy man and trusting his possessions to three servants as an illustration, really, of how God entrusts each one of us with some of his resources.

And so the investing points that we lift from that parable are that 1) the amount that we’re given to manage is related to our current abilities. And then 2), the Lord is going to return one day, he’s going to want to see what we’ve done with what he’s entrusted to us. And then 3), if we manage his resource well — in other words, if we’re making something more of what he entrusts to us, then he’ll entrust us with more to manage.

Rob West:
All right, we’re working our way through nine biblical prints today that relate to investing. What does God’s Word say about investing and how can we pull principles out that apply to how we handle his money that’s working for us in stocks and bonds and other investments?

Joining us today to talk about that is our good friend, Mark Biller, executive editor at Sound Mind Investing. By the way, all of these principles can be found in an article in the current edition of the SMI newsletter called "What Every Christian Needs to Know About Investing." And you’ll find it at soundmindinvesting.org.

Tell us about the number three.

Mark Biller:
Well, the third one, Rob, is that our motives matter — a lot. The Bible doesn’t encourage us to multiply money just for its own sake or so that we can live a life of comfort. In fact, there’s some pretty stern warnings about that. But on the other hand, the reason that we should be investing and trying to multiply, as we just talked about, is that in God’s economy, that multiplication is all about impact.

So Scripture teaches us that our lives are supposed to be focused on loving God, loving people, and bringing glory to God. And so, financially, some of the ways that we can fulfill those purposes are by giving generously towards kingdom-building causes and providing for our families.

And, you know, while we’re in the paid workforce, it’s usually pretty easy for us to do that because we have money coming in through our wages, our income. But someday, most of us are gonna transition to some form of retirement, some something away from full-time paid work. And so if we’re investing wisely now, that can give us the means to be able to continue giving, continue supporting our own family, even after those salary days are behind us and we’re moving into later life.

Rob West:
Yeah, very good. Really helpful. Well, we’ll continue working our way through these principles, but all of our lines are full. So let’s take a few questions at this point.

We’ll begin today in Fort Lauderdale, WKES. Hi Albert, how can we help you?

Caller:
Yes, good afternoon. I was listening to one of your prerecorded programs —I think it was on Wednesday — and you spoke about government treasury bonds and that if you lock it in for five years, you can get a yield of up to 7%. Is that correct?

Mark Biller:
Yeah. I think we need to make a real clear distinction because there, there are a couple of different types of government bonds. So there are regular Treasury bonds that we often hear about. There are TIPS, which are these inflation-protected bonds, that are fairly similar to regular Treasuries. They have an inflation adjustment in them, but the rates of return are not going to be all that different — at this point — than regular Treasury bonds. And then the one that’s kind of the outlier right now, Albert, those are the I Bonds. And if you’re, if you’re thinking about a return, that’s up in like the 7% range, it’s probably those I Bonds that you’re thinking of.

And those are a unique beast. Those have to be bought directly from the U.S. Treasury on the Treasury Direct website. You have to set up an account directly to do that, but those are a really great deal for investors right now. You’re not gonna find any other government bonds with the safety of government bonds that are yielding anywhere close to what those I Bonds are returning.

So if you’d like more information on those, we actually wrote an article on I Bonds a couple of months ago on our website. So if you go to soundmindinvesting.org and just type I Bonds into the search box. You can find an article that explains all about those — how to purchase those, how they’re a little bit different from other types of bonds. And again, the main downside there is you can’t buy them in your regular brokerage account. If you have a Schwab or Fidelity account, you won’t be able to buy I Bonds there, whereas you can buy the other types of bonds through regular bond funds and that sort of thing.

So I hope that helps you Albert, but I Bonds are a great deal right now, for sure, because of the inflation adjustment that’s built into them.

Rob West:
Mark, just a quick follow-up on the I Bond — and I would completely agree that these are worth taking a look at. A lot of folks wanna know how long they have to keep ’em. Of course, you’ve gotta keep ’em a minimum of a year, anything less than five years though, you’ll give up just a little bit of interest. So as long as you can commit at least that 12 months. But then talk about the adjustment this, because, given that these adjust in April and November every year what do you expect moving forward, given that this is pegged to CPI [the consumer price index]?

Mark Biller:
Well, that’s a great question. I think that in the short term, those adjustments should be mild because of course, just this week we printed the highest CPI print yet that we’ve had. So even if those numbers do start to come down — and I do think they probably will, just because the rate of increase in inflation has been so quick over the last year — that that headline number, that 7.9% year-over-year that we just saw this week, even if that starts to come down, that adjustment, isn’t gonna come down real fast. So I would expect that these I Bonds are still gonna have really attractive rates for, you know — it’s hard to say for sure, Rob, of course, but certainly, through the rest of this year, I would expect those to look really attractive. And, probably, it could well be for the next few years that they’re substantially above other government bonds.

Rob West:
Yeah, very good. Given that the last adjustment was in November, Mark, and we’ve seen CPI tick up every month following, do you expect the next adjustment that would take effect in May to actually be higher than the 7.1% or so that we’re seeing now?

Mark Biller:
Yeah, it certainly could be. And even if it’s just right around this same level, there’s such a huge gap — don’t ever remember a gap this wide between regular bonds and what you can get through these I Bonds — so even if it just holds steady, that’s great news for anybody in I Bonds.

Rob West:
Mark, before we get into the next principle, let’s go back to the phones. Rosie’s been waiting patiently in Chicago, Rosie, how can we help you?

Caller:
Hi. Thank you for taking my call. I have a good 401(k). Ever since I started working in 1984, I had a good friend who did that for me. She did all my paperwork and all that, and 30-something years later, I still have that 401(k) growing and growing and growing. I borrow [from] it every now and then, but lately, it’s just sitting there.

And as you know, the world news— not that I’m panicking — but I’m seeing it go down. Is that a concern that I should withdraw now, take action? My thought is to take it all and put it on a down payment for a home. But I don’t wanna do something out of emotion or worry. As I see it go down, "Oh God, will I have enough for a down payment or am I gonna lose it, or one day wake up and it’s gonna be gone?"

Rob West:
Sure. Well, Rosie, I appreciate the question and I suspect you reflect the sentiments of many in our listening audience today. So I’m glad you asked the question before mark weighs in. Let me ask you just a couple of questions. What is your age, if you don’t mind me asking?

Caller:
57.

Rob West:
Okay. And as you look out over the rest of your working life, God may re-direct you at any point, just based on, though, everything you know today, how long would you plan or expect to continue to work?

Caller:
Well, retirement age, that’s my plan — unless the Lord takes me.

Rob West:
Sure. So you’d be looking towards 65, I guess, another eight years or so.

Caller:
Yeah.

Rob West:
Okay. Very good. And you’re actively contributing to this 401(k). You’re still doing salary deferrals going into it?

Caller:
No, it’s just there sitting because it was from a previous job from many years ago. And it’s just been sitting there. And then with my current job, I also have a 401(k).

Rob West:
I see. Okay. Very good. And what would be the total between the two roughly?

Caller:
As of right now, a good $90,000.

Rob West:
Okay. Mark. Your thoughts?

Mark Biller:
Yeah. Well, Rosie, it’s a great question. I’m sure a lot of people are having similar thoughts and similar questions. That actually ties right into the article and the fourth principle in that article — which is that we should expect some difficult times along the way. You know, Job 5:7 warns us in advance that "Man is born to trouble as surely as sparks fly upwards."

So it really shouldn’t surprise us when these periods come. We know from market history that about every other year, the stock market has a 10% decline or so. And once every seven or so years, on average, we get a full-blown bear market, which is a decline of 20% or more. We’re not there quite yet with this decline, but we could certainly get there. And we’d be right on pace because we haven’t had a full bear market since 2008–2009.

So what we’re experiencing so far is not anything out of the ordinary really as far as market behavior, but that doesn’t mean that we want to just bury our heads in the sand and assume everything’s gonna be fine. And really where this is the trickiest is with folks that are getting close to retirement age or are in retirement age who may not have as long to make up any losses from a bear market. You know, if you’re a younger person listening to this and you’ve got 10-to-20 years before, you’re gonna need to take money out of a retirement account, it’s a lot easier to just kinda let this ride and assume that the market is gonna do what it always does, which is bounce back eventually and move on to higher highs. When you start getting into that 5-to-10 year range away from retirement, it definitely does start to take on a little bit different tone. So, Rosie, let me ask you this. Do you know how the money is invested within the 401(k) between stocks and bonds, how that’s split up?

Caller:
Not really. I really don’t even look at it. I just know that it’s there. A friend many years ago, 30 years ago, just took interest in when I got hired working with her. She’s like, this is what’re gonna do. And she actually did all the paperwork. Thank God for friends like that.

Mark Biller:
Right, that’s for sure. Well, Rosie, the first step before I would consider actually, you know, pulling money out of the plan would be to look at how that money is invested because your first way to risk-manage is gonna be to turn that dial between stocks and bonds and move away from stocks and towards more bonds. That’ll make it more conservative and you’ll have less extreme up and downs.

Rob West:
Yeah. You also could look at what’s called a "target date" fund where it automatically rebalances as you get closer and closer to retirement. You’ll peg the target date for your year of retirement — your expected year of retirement. And it’ll automatically allocate it in a way that’s Mark is describing where it gets more conservative as you get closer. But beyond that, I certainly wouldn’t be looking to pull it out or go to cash.

Rosie, We appreciate your call. We’ll be right back on MoneyWise Live. Stay with us.


Rob West:
Delighted to have you along with us today on MoneyWise Live. I’m Rob West. Joining me in this segment today, Mark Biller, executive editor of Sound Mind Investing. We’re talking about biblical principles of investing.

Hey, have you downloaded the MoneyWise App? If not, we’d love for you to check it out today. You’ll find it in your app store to search for "MoneyWise Biblical Finance." When you become a Pro subscriber, you can connect to all of your institutions, download your transactions, automatically categorize them using our digital envelope system so you can stay on top of your spending throughout the month. You’ll also be able to connect with our MoneyWise Coaches. Whenever you need help from a coach, they’ll be right there. You can schedule a meeting right within the app.

It’s a great resource and you can check it all out when you download the app today in your app store. Again, search for "MoneyWise Biblical Finance."

Mark, we were talking before the break about biblical principles that relate to investing. Take us into the next principle.

Mark Biller:
Yeah, we need to guard our heart. And what we’re talking about when we say we need to guard our heart is, really as an investor, the two primary emotions we have to guard against are fear and greed. So when the market’s racing higher, like it was much of last year, then greed can tempt us to be a little more aggressive than we should be with our investing. And then on the flip side, when the market’s falling, then fear tempts us to abandon our long-term plan and run for cover at the worst possible time.

That leads us into our sixth principle, which is that we need to think long term. So the Bible’s very clear about our goal should be to build wealth slowly. And we take that from the familiar verse, Proverbs 21:5 that says "Steady plodding brings prosperity. Hasty speculation brings poverty." So a biblical approach to investing is gonna take a long-term view and is gonna let time work for us because history really does favor the patient investor.

Rob West:
That’s great advice. The next one is one we teach often and that is really the importance of diversification, which comes from Ecclesiastes 11:2. Mark, why is that so important to apply that biblical truth?

Mark Biller:
Yeah. You know, it’s, it really boils down to the old adage of "not putting all your eggs in one basket." If you invest a big chunk of your portfolio in a single stock and that one company has a bad year, it can really be a big problem. If you’re invested across many stocks, then if a few of them have problems, they’re gonna be outweighed by the many others that don’t. And that’s really why we’re such big fans of mutual funds and exchange-traded funds ETFs because they’re such easy ways to get that broad diversification.

Rob West:
Very good. Let’s see if we can quickly tackle a couple of additional caller questions. Let’s head to Tuscaloosa, Alabama. Star, thank you for calling. What’s your question?

Caller:
Yes. Thank you so much for your program. I really enjoy it.

I am 72. I have an account with some mutual and I guess that principle was meant for me, because I’m very nervous right now — with all the talk about bitcoin, and all the talk about ESG, and the bear market. And I’m just wondering about should we leave the mutual funds where they are right now at age 72? Or do you recommend, as you previously mentioned, the I Bonds or something else.

Rob West:
Mark, your thoughts? A lot there.

Mark Biller:
Yeah, there is a lot there. Star, I think the biggest thing to understand here is that mutual funds can be invested in a lot of different things. And so as you’re hearing about some of these topics like bitcoin or like ESG, which is kind of an "environmental, social, governance" kind way of investing, unless the specific mutual fund that you own is targeting bitcoin, then you don’t have to worry about bitcoin or unless your specific mutual fund is investing in an ESG manner — it’s a specific ESG fund — then you don’t really need to worry about that either.

So the first thing, Star, you really want to focus on is looking at the specific fund that you own or funds that you own and seeing what is in those funds. Are those stock funds? Are those bond funds? And that’s gonna really help you determine, "Do I need to make any changes?" Because if you own a good bond fund right now, then I wouldn’t tell you that you really need to think about selling that at all. Whereas if most of your money, for example, is in a high-tech growth stock fund, then I would say, "Yeah, at 72 years old, we at least need to diversify away from that and get some of our money into some other things like bonds or like value stocks, which are gonna be less risky." So, the first step, Star, is going to be to really home in on what do you own — what exactly is in the mutual fund, what type of mutual fund is it that you own. Rob, any thoughts there?

Rob West:
Well, I think that’s right on. And, Star, the only thing I would say is the next principle from the article at SMI is seek wise counsel. And perhaps if you’re uncertain about evaluating your investments in light of what Mark just said, connecting with the folks at SMI or finding a Certified Kingdom Advisor there in Alabama to work with could go a long way to evaluate what you have in light of your overall plan. You can go to soundmindinvesting.org to learn more, or go to moneywise.org and click "Find a CKA." And we appreciate your call.

Mark, your ninth and last biblical principle is a great way to finish today. What is it?

Mark Biller:
Yeah, it really is Rob. And that last principle is to trust in God. You know, Psalm 20 verse 7 says, "Some trust in chariots, some in horses, but we trust in the name of the LORD, our God." And that’s really the main thing that should set a Christian investor apart. Good times, bad times, whatever times, our trust is in the Lord.

Rob West:
We always appreciate your time, Mark, stopping by being generous to answer questions — but also to take us back to God’s word, to remind us of these important principles. So thanks for being here today.

Mark Biller:
Oh, it’s my pleasure. Thank you,

Rob West:
Mark. Biller has been our guest today. You can find out more in the SMI article, "What Every Christian Needs to Know About Investing." You’ll find it at soundmindinvesting.org. When we come back more of your questions: 800-525-7000. This is MoneyWise Live — biblical wisdom for your financial decisions. Stay with us.

Written by

Joseph Slife

Joseph Slife

Joseph Slife has been a news writer for the Associated Press, a college instructor, and a radio host. He and his wife Joye have three grown sons.

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