What Every Christian Needs to Know About Investing

Feb 24, 2022
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The Bible teaches us to live differently.

“Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is — his good, pleasing and perfect will” (Romans 12:2).

That applies to all aspects of our lives, including how we invest. While Scripture doesn’t weigh in on the differences between Roth IRAs and Traditional IRAs, or offer guidance on choosing between a market order and a limit order, it does provide numerous principles that can (and should) guide Christians in our investing. Here are nine such principles.

  1. Know your role.
    Our culture would have us believe we own our home, our cars, and our investment account. The Bible says otherwise.

    “The earth is the LORD’s, and everything in it, the world, and all who live in it; for he founded it upon the seas and established it upon the waters” (Psalm 24:1-2).

    Acknowledging God’s ownership of everything is the essential starting point of biblical money management. Likewise, it is the essential starting point of investing. We are stewards, or managers, of whatever God generously and temporarily entrusts to our care. Investing money in light of this truth means doing so for God’s purposes and according to His principles.

  2. Pursue multiplication.
    In the Parable of the Talents (Matthew 25:14-30), Jesus uses the story of a wealthy man entrusting his possessions to three servants to depict God entrusting each of us with some of His resources. Here are three important points gleaned from this parable:

    • The amount we’re given to manage is based on our current abilities (v. 15);

    • The Lord will one day return and He’ll want to see what we have done with what He entrusted to us (v. 19);

    • If we manage His resources well — in other words, if we make something more of what He entrusts to us — He’ll entrust us with more to manage (v. 20-23).

  3. Motives matter.
    The Bible doesn’t encourage multiplying money for the sake of multiplying money or so that we can live a life of comfort (see Luke 12:13-21). In God’s economy, multiplication is all about impact.

    Scripture teaches that our lives are to be about loving God (Matthew 22:36-38), loving people (Matthew 22:39), and making a God-glorifying difference (Ephesians 2:10).

    Financially, some important ways we can fulfill those purposes are by giving generously toward Kingdom-building causes (Proverbs 3:9) and providing for our families (1 Timothy 5:8). While we’re in the paid workforce, our salary enables us to do both. However, one day most of us will retire from full-time paid work. Investing wisely now can give us the means to continue giving even after our salary days are over — whether that means giving appreciated assets or leaving some of our estate to our church or other ministries. Investing also enables us to build a nest egg to help provide for our family in later life.

  4. Expect difficult times.
    A verse in the Old Testament book of Job says “man is born to trouble as surely as sparks fly upward” (Job 5:7). When trouble comes, it shouldn’t surprise us! We’ve been forewarned. Trouble is certainly common in the investing world.

    While the stock market’s long-term trajectory has been upward, it has not moved up on a straight line. According to investing blogger Ben Carlson, on average since 1950, the market has experienced a “correction” (a decline of 10% or more from its most recent high) every two years, a “bear market” (a decline of 20% or more) every seven years, and a “crash” (a decline of 30% or more) every 12 years.

    Knowing some stock market history can help us take the market’s ups and downs in stride.

  5. Guard your heart.
    Our God-given emotions enable us to enjoy the richness of life. They can also get us in trouble. That’s why the Bible instructs us to “guard” our heart (Proverbs 4:23).

    Two emotions that can be especially challenging for investors are fear and greed. Of the many risks investors face, perhaps the greatest is the risk of getting in one’s own way by letting such emotions dictate investing decisions. When the market is growing, greed can tempt us to invest more aggressively than we should. When the market is falling, fear can tempt us to run for cover. That’s why, in addition to knowing some market history, the next three principles are so important.

  6. Think long-term.
    The Bible teaches us to build wealth slowly.

    “Steady plodding brings prosperity; hasty speculation brings poverty” (Proverbs 21:5 TLB).

    A biblical approach to investing takes a long-term view of the stock market. History demonstrates that time favors the patient investor. On any given day, the market has a slightly better than 50% chance of rising. As the time horizon expands, the higher that percentage becomes. For example, there has never been a 20-year period when the market has declined.

  7. Diversify.
    Scripture teaches us not to put all of our eggs in one basket.

    “But divide your investments among many places, for you do not know what risks might lie ahead” (Ecclesiastes 11:2).

    If you invest your entire portfolio in a single stock and that stock has a bad year, that’s a problem. But if you invest in 10 to 20 stocks and one of them has a bad year, the performance of the others may balance that out. That’s the idea behind diversification.

    Investing in mutual funds, as opposed to individual stocks, is a simple way to diversify your investments. A mutual fund is a pool of money from many investors that is invested in many stocks (or other types of investment).

    A crucial next step is deciding how to diversify by determining your optimal asset allocation. That will tell you, based on your age and investing temperament, how to best balance the competing goals of growth and safety with an appropriate mix of stock funds and bond funds.

  8. Use wise counselors.
    The Bible encourages us to seek the input of trusted advisers.

    “Plans succeed through good counsel” (Proverbs 20:18). By the same token, “Plans fail for lack of counsel” (Proverbs 15:22).

    Investing can be challenging to do entirely on one’s own. Fortunately, good counsel is readily at hand, whether via an investment newsletter or a financial advisor.

  9. Trust in God.
    The Bible says, “Some trust in chariots and some in horses, but we trust in the name of the LORD our God” (Psalm 20:7). Perhaps nothing sets the Christian investor apart from others more than this: in good times and bad, our trust is in the Lord.

    In the aftermath of the pandemic-fueled market crash of early 2020, it was encouraging to survey SMI’s members and see so many crediting their faith, prayer, and meditating on the truth of God’s Word for helping them get through that troubling time. Over 500 members sent us more than 70 verses of Scripture that they turned to for comfort and reassurance.

Principles into practice

Imagine the good that would come about if all Christ-followers used these nine principles to guide their investing. Imagine how much more portfolios — and more importantly, impact — could be multiplied. Imagine how much more money could flow toward Kingdom purposes and how much better families would be provided for.

Imagine how much more peace of mind would be experienced by Christian investors — so much so that others might notice, ask questions, and be introduced not just to good investment counsel but to the Good News. Imagine how much more God would be glorified.

Written by

Matt Bell

Matt Bell

Matt Bell is Sound Mind Investing's Managing Editor. He is the author of five biblical money management books and the teacher or co-teacher on three video-based small group resources. His latest book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management, was published by Focus on the Family in 2023. Matt has spoken at churches, universities, and conferences throughout the country and has been quoted in USA TODAY, U.S. News & World Report, and many other media outlets.

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