Ep. 049 - Biblically Responsible Investing: Making Faithful Choices | Eventide Part 2

Episode Transcript

Austin
Spencer, as we think about biblically responsible investing, we need to embrace It's complex. And when we think about this, we need to think about are our objections, legitimate or they smokescreens for some sort of a fear that I just don't want to dive into. So today, we want to talk through some of the frequently asked questions about biblically responsible investing, as well as just share our stories of how we've come to the places that we've come to.

Austin
So it's what we share with our listeners a little bit more about just your journey towards biblically responsible investing and what that looks that look like over the last couple of years.

Spencer
Well, this is something, again, we think that it's important to have a conversation with clients about. There are different paths that I think people can be faithful in moving down. it's looked different for me over the years, and we're all on the journey here. So what we want to say upfront is let's not let the perfect be the enemy of the good.

Spencer
And also let's not settle for good enough. Yeah. You know, here, let's really be thoughtful and let's act as stewards, which is an uncomfortable position because it's never ours. We're constantly going before the Lord and trying to listen to his wisdom on this. But thinking back, you know, I grew up with a father who was in the business and so was interested in investments over time, but it wasn't really as much on my mind of where am I investing you know, funds.

Spencer
when I joined him in 2010, certainly I started to think more in depth about this and recognize that there's certain firms that are doing things that I don't really, I, that I don't get behind that I'm not excited about. Certainly a tobacco firm that they're trying to sell products that are going to create addiction. And particularly in the developing world, that's just that's not exciting, you know, to get behind.

Spencer
at the same time, this the landscape is constantly changing in the investment world. And so looking back in 2010, there weren't as many options that were out there in the investment landscape. The ones that I looked at, the expenses were quite a bit higher, and I didn't feel like there was a consistency in terms of the way that they were approaching things that really, resonated, you know, with me at the time.

Spencer
Now, I also hadn't grappled as deeply about the biblical wisdom and the biblical admonition that we need to stay away from ill gotten gain. And I really hadn't thought through how that relates to, say, gambling, how that relates, you know, as deeply to tobacco or those areas that, that take human life, like weapons or, or abortion or other places there.

Spencer
So, so some of it was I just hadn't grappled a bit with it at the same level that I feel like we've, we've worked through over the last couple of years, but some of it there legitimately weren't as many options, you know, out there to faithfully implement. Fast forward about five years. We had a missionary client who came to us and said, you know, I'm getting, I have these funds.

Spencer
I want to make sure that they're invested. But above all, I want to make sure that I'm not investing in companies that are harming the very people that I served in Africa. And she had she had had significant time in a lot of different African countries. But the one that she was most concerned about was North Sudan, because at the time, and this has been on and off for, you know, over a decade.

Spencer
but you have companies coming in and paying the regime high values, bribes and other payments there. And then the government, the regime in power will take those funds and use it to perpetrate genocide on a subset of its people. So she said, I want nothing to do with any of these companies. Well, I hadn't actually even heard of companies that were funding this genocide.

Spencer
It was not on my radar screen. I had heard of Darfur. I knew of some of the atrocities that were happening there, but I didn't know the funding mechanism. So you come to realize that there were four companies at the time that were publicly traded global companies Petro China, Sinopec, ONGC and Petronas that were paying the North Sudanese government.

Spencer
and so what we did from that point across, our investors, investments, tried as much as we could to set a screen in place where we're not investing in companies that are contributing to genocide. And that's not just in North Sudan. There are other hot spots around the world. But as you might imagine, there's not that many publicly traded companies that are actually engaging in business with North Korea.

Spencer
So it's it's a small subset of companies. But we wanted to say, hey, these companies, if they are engaged in bribing countries that are then, perpetrating genocide, that's, that's that's, among the worst of things we can all get behind. Let's not contribute to anything that's going to be supporting genocide there. So that is that was an initial step as we engaged in that step, though.

Spencer
And as I looked at my own portfolio and and aligned it there as well, I started to reach out to a number of the different denominational or Christian, you know, based investment companies and look at their portfolios. And what was deeply disconcerting to me is seeing that many of them had Petro China, many of them had Sinopec, many of them had these companies that were doing this.

Spencer
and there were even screeners that were out there that were, publicly available that would look at a company like Petro China and it would purport that it was a biblical screen or biblically responsible investment screen, but it wouldn't list that Petro China was paying huge sums of money to the Northern Sudanese government that wouldn't screen them out, so to speak.

Spencer
So I reached out to a number of different companies and made them aware of, you know, this this issue. It wasn't, you know, something that I had just discovered. There's a whole Investors Against Genocide, movement that's out there, but it had not really come into, those denominational circles. So I was pretty skeptical of, you know, anything beyond some of the most basic of screens that are out that were out there, but really over the last couple of years, really digging into the scriptures and saying, okay, help me understand, what does the Bible really say about the ways that we invest and being open in a, in a, in a more significant way to

Spencer
making a movement there. And I think some of this comes from this idea that if we really view God as our provider, if we really believe that he is the one that is going to sustain us, that it is it is, our work to be faithful, but it's not our work to say provide for everything that we need.

Spencer
I think the opening up of my hands and my heart in that space allowed me to say, okay, well, let me see if if there's a better way here, there's a more faithful way based on the biblical wisdom. And going through a couple of classes here over the last couple of years have continued to push me to think more about what is ill gotten gains and to kind of arrive at this, this thought process, that ill gotten gain.

Spencer
Fundamentally, if if a company's product and service, if it is if its whole goal is to increase addictive behavior, you know, in its customers and its clients, it's really hard to get excited about that company to to say, man, I want them to grow. I want them to pay higher dividends to me. You know, if I'm invested in a company that is, you know, a casino, do I do I want more people to be ensnared by that casino just so they can pay out a dividend?

Spencer
Maybe that's a little bit higher or have a a rate of growth that's higher from a stock valuation standpoint, it became, you know, more and more dissonance there as I looked at things as well. You know, you look at different companies and you say if I if I could I'd like to have companies that on the balance they do a better job in their practices of honoring their customers, employees, suppliers.

Spencer
They don't have these adversarial relationships. that are as significant now. Every company is going to compete. Every company is going to have, you know, to, to walk through and decide, okay, here's where we price things here, here's where we say, no, all these kinds of different considerations. But there's some companies that really delight customers that, seem to be one step ahead in terms of service, these different things.

Spencer
And then there's some companies, that every time you interact with them, it's just adversarial in nature. And so there's part of me also that's starting to say, okay, could I shift my investment to invest, much more significantly in these companies that they just seem to buy their values, do things in a way that is, is, right.

Spencer
Yeah. so, you know, looking at that and then, and then seeing that the landscape has continue to develop and there's a lot more options that are out there. Now, I will say that there's still no option that I've found that perfectly replicates what I would like invested, because even even those companies that I can get behind, by and large, there is one screen, with one of the investment companies that that I have my personal funds in that they're not going to invest in nuclear power.

Spencer
And I think nuclear power is a good thing. on the balance, overall, both because those power plants can be put in certain areas, the small modular reactors, and because of the carbon footprint of those and because they can be manufactured, you know, ideally in, in, kind of in a mass way in the States, there's just all kinds of good things.

Spencer
You know, I think that that I would like to see that option continue to be explored. But it's a screen. Yeah. And so I'm not going to see that now, you know, all of these other companies that are being screened out in these practices that are being embraced through active management. I can get behind all of those things.

Spencer
But, but it's not perfect. Yeah. And I think that's where, again, we have to come back to the idea that, let's not let the perfect be the enemy of the good. We're all on a journey here. We're trying to move towards a posture of faithfulness. We're trying to listen, to receive and to hear what the Lord says.

Spencer
And that doesn't take away from the fact that, okay, he's also dealing with us. How much should we actually keep? Because I could make the argument that, you know, if we just build a bigger barn, but we build it with companies that maybe you're doing some good, that it can still harm our soul. so there's lots of different things.

Spencer
This isn't the only thing that we're thinking about as we consider investment, as we consider a financial plan, but it's one of the pieces, right? So, how about for yourself, you know, where do you find yourself in terms of this journey?

Austin
Yeah. So in terms of my journey, you know, I started with a nonprofit in about 2010, right after college, and they had a 403b and we were required to put money into it, thankfully. And so I just put money in. And I think at that time I, I don't remember selecting the fund. There was so much the, so much going on at our staff training.

Austin
I was my wife and I were engaged at the time, so we were also planning our wedding. The staff training was a long period for this organization, and so I just it was a blip on the radar. So I decided whatever, I guess my risk tolerance was high, where I just said, give me a target date fund. Didn't think about it.

Austin
I legitimately did not think about it again until I started working here. and a lot of that, I think was good because I didn't have a whole lot of extra mental capacity. there were so many other things in my life that were going on. We had to raise our own support and raise our own salary. And so oftentimes when I was thinking about my finances, it was, okay, is God going to provide a paycheck this month?

Austin
Not where is my retirement investment going? And so for for most of my investing career, it was I think there's money going to my retirement. But that's about all I thought about. But then when I started with the firm, I these ideas of okay, what is the market? What is investing? That's where we're really kind of started and sparked.

Austin
And so the first couple of years with the firm, it was just understanding what actually investing is. I came from a totally separate background in data analytics. And so it was learning about what does it mean to be an advisor. And so but really what started the the change for me was when we start, when we went through our 9:23 fellowship and really starting to ask some of those broader questions of, what does it truly mean to be a steward of God's resources and really asking the questions that we bring up oftentimes in this podcast of God is my provider.

Austin
Do I trust him? How much is enough? And then how much do I keep? And and when we started asking those questions, it really changed that entirety of the framework of my investing philosophy to say, okay, with these decisions as God, as a steward, he does care about where all of my decisions about stewardship are, my decisions about how am I stewarding my family, my decisions about how am I stewarding my time?

Austin
when we looked at the Wesley interview or the Wesley, episode, how am I stewarding my memory? What am I filling my mind with? Is it things that are honoring to the Lord, or just things that that ping pong in and out and really have no, no merit long term. And so as I started thinking about this, it was really, again, coming back to that idea of what is ill gotten gain.

Austin
And when we look at the scriptures and see how strongly Jesus talks about it, or how strongly scriptures talk about it, and how the Pharisees wouldn't take ill gotten gained back into the temple because they knew how God felt about it. It really started sparking me to say, well, what is in my portfolio? And started asking those questions like you did.

Austin
And I'm just really thankful that we've had this time and space together to work through this, because honestly, I wouldn't have thought about it probably until the day that I died again. As a as I thought about this, it's it was always future Austin's money. All of our investments right now are in after are they're in qualified accounts that are set aside for retirement.

Austin
And so it was not things that I actively thought about. And so really it was a movement in faithfulness towards the Lord of saying not only is future money yours, but current money is yours. All of it is yours. And how do I be a faithful steward of these things? And and legitimately for a while there, I also held this idea of biblical responsible investing at arm's length because I thought, well, I'm not really earning too much from casinos or tobacco.

Austin
And so if I'm only holding a really small portion of that, how bad is it really? But again, coming back to that idea of no God, God owns it all. He cares about it all. And I can't let perfect be the enemy of the good. But I also can't let those those smokescreens those well, God doesn't really worry about that.

Austin
It's it's going to be more about how I use it. No, he does care about the gains. I am a steward of all of the resources that God has given me, not just Future Austin's resources like it is. It is current, past, future, present. And yet I come back to Lamentations three. For this I call to mind, and therefore I have hope.

Austin
The steadfast love of the Lord never ceases. His mercy never comes to an end. They are new every morning. Great is his faithfulness. And so, as I think about that, as I wrestle with that, I have to remind myself that my posture towards biblically responsible investing and just kind of washing over and saying, well, I can't control that.

Austin
I can't control what these companies do. So I'm just going to invest in the market broadly and let that let God take care of what I do in the future as I actually utilize these resources. That's what matters. But now, as I'm wrestling with this, I am reminded I'm on a trajectory with the Lord. I'm on a path with the Lord, but his mercies are new every morning, and I don't have to look back in shame of maybe what I didn't do in the past, but I can look forward and say, no, God is walking us into a beautiful new place, both for me and my family, but as well as just how I see

Austin
stewardship and again, coming back to how much do I keep? If it's all the Lord's, how do I participate with him in every moment? So, Spencer, as we look at some of these frequently asked questions, we kind of touch on them a little bit in both our stories. But you want to launch us in. Doesn't God just care about how I use his resources and not how I grew his resources?

Spencer
Well, and that's where I think the first episode that we just talked through, ill gotten gain, how it is defined in both Proverbs and then Deuteronomy 23. And then we look at the story with Judas, you know, bringing the money back to the chief priests. In each one of those, we see, God actually does care. And whether it's set up in his law, or even as we see, the way that Jesus would approach things, he he said he did not want, a person to come and give their money to the temple if they had the obligation of taking care of their parents.

Spencer
He didn't want to declare, those funds off limits just because they were going to give him to the temple. And they would then therefore not have to take care of their parents. He's looking at how we serve as steward across the entirety of our lives. So I think that it's it's not the best path to say, okay, we're just going to look at using the resources rather than how we actually grew the resources in the path.

Spencer
And one of the ways that we could, you know, do this, this would be a kind of a, a ridiculous example. But if we knew that we had a friend who was being harmed, like a good friend who is being harmed by a company that we were invested in and that we were actually profiting from that company. Yeah.

Spencer
Well, we would know that's that's not true, that that's not good. Yeah. now, we may not know some of the people that are being harmed by, you know, seven year olds receiving, you know, cigarets, being passed out or the people that are lured into casinos and the money, taken from them again by their own choices, but still preying on their frailties.

Spencer
You know, if that was John down the road that we had a good relationship with, we would know that's bad.

Austin
Yeah.

Spencer
but just because there's this layering in financial transactions in the market and, companies and such, and we've got this interconnected global economy, I don't think that that makes us any less culpable. Yeah. Not necessarily. Yeah.

Austin
Well, so what about this idea of you kind of touched on it when you were sharing your story, but is it even possible to invest faithfully and will it really make a difference?

Spencer
Well, and I think this is where we separate those two questions. It's possible to invest, I think, more faithfully. It's possible to be more of a steward. It's not possible to be a perfect steward. Yeah. So there is gray in every company. There's no perfect company. There's no, you know, even the companies that maybe they do something that we know as a, good or, or product, or service their, maybe they, their whole mission is to cure childhood cancer in one arena, or we can all get behind and say, well, that's great.

Spencer
You know, we're so excited about that. But they're still made up of these companies are made up of people. Yeah. And people are all fallen. Yeah. So we have to recognize it's never going to be possible to perfectly deploy capital in a way that every decision that's made is going to align with what God would have.

Austin
Right.

Spencer
it's possible, though, to invest in a way that is more faithful than other ways. And that's where we see, okay, if I could just avoid some ill gotten game, if I could just take, you know, investments out of my portfolio that would be related to, owning casinos, you know, owning tobacco companies. you know, owning companies that, are pushing forward just a dehumanization of women through, you know, pornography.

Spencer
you know, if I can get away from those things, that's a step in the right direction. It feels like, Is it solving everything? You know, if I have an investment in a company that's a fast food company, and they don't do everything perfectly. Okay? Yeah, maybe they're, causing people to eat more hamburgers then, you know, would be, useful for their diet.

Spencer
but that's a far cry from, you know, a lot of kind of the horrors of, you know, that that we would talk about with respect to, seeing someone, absolutely addicted to, gambling, to pornography, to, you know, tobacco.

Austin
Yeah, absolutely. So I'll touch on this next one here of how do I even find out the companies that I have in a mutual fund or an ETF. So I went down a little bit of a rabbit hole. And I will say it's it's challenging. It's actually really hard, especially if you've got some of these target date funds.

Austin
So in my 403b funds were invested in a Vanguard target date fund, the 2050 fund. Thankfully, Vanguard's 2050 fund is comprised of four of Vanguard's funds, the total stock market, the total international stock market, the total bond market, and the total international bond market. But to find out all of that, I had to look at my last statement from my 403b provider from my former employer, look at the selection that I had, then go to Vanguard's website and figure out what's in that fund or the correlated fund.

Austin
And then to find out the companies, you then have to go to the prospectus for that fund and look through Vanguard's total stock market and total international stock market. Invest in every single publicly traded company possible. And so there are thousands upon thousands of listings. And so I would have had to go line by line through every single one of them.

Austin
It's tough now when I shifted over, to working with our firm, my first investment here was with a fidelity target date fund. and when I looked at that one after preparing this episode, that fund had 13 US mutual funds underneath it, nine international mutual funds, 12 bond funds, and six short term assets. So if I wanted to find out the actual companies that I held, I would not only have had to look and see, oh, I'm in a fidelity target date fund.

Austin
What happened to go one layer deeper? Okay, what is this first US fund? What is the second? What is the third? And go into the prospectuses. Go into the holdings. It takes diligence and effort. Now thankfully there are some screening websites that you can look at that will help you understand a little bit better. But the reality is the due diligence takes time.

Austin
It takes time to actually look at your statement and see, okay, what are the options? That's that I have within a 401k or 403b thankfully IRA providers typically you have a little bit more latitude with what's out there, but oftentimes you may not have access to the entirety of the investment landscape. And so this is where we say finding out the companies that you own, it's not impossible, but it is going to take some time and effort.

Spencer
Well and there are options there to be able to align funds with providers that they, they say we're either going to screen out some level of, of firms, some specific firms, or we're going to be actively target investing in firms that align with a lot of different ideals. So there are ways that we can simplify this.

Spencer
and they don't have to be tremendously time intensive. But if we're at a place where we don't know what we own right now, they're in a fund of funds like you talked about, then it's a deep, deep, deep hole to go down to, to figure out what's going on. Yeah.

Austin
Okay. So, Spencer, let's walk back to Will. The investments that I make actually make a difference. Can you walk us through that?

Spencer
Well, a lot of it is we are owners, we're stewards. And so regardless of what rate of return we get, the Lord first expects faithfulness. We'll talk about this in a future episode. Really looking at Matthew 25 and the owner and steward, you know, relationship there. But first he expects faithfulness from us. So the first response to that, I think, would would be to say, well, I'm not sure that my owning one company versus another is going to have a big impact on the company that I don't own.

Spencer
I actually don't think that it'll have a huge difference. Now, if we had several million people that, were convicted of, you know, wanting to go in this direction, they, they change their path and it would start to have, you know, an impact there. One person, you know, probably not, many, many people, it can start to have that snowballing effect, that our voices can be heard, that we just really don't want to invest in those companies where there's ill gotten gain.

Spencer
and so I think that that practically, it is a, something that that people can raise. But if we look at the biblical evidence again, what the Bible would suggest is just don't do this. I don't want you to do this. Yeah. and so if we believe that to be true, then, you know, our response, whether, you know, a company will, you know, sell to seven year olds in, you know, Indonesia, cigarets or not?

Spencer
if we stay away from that practice, then they're then we're avoiding still that ill gotten gains. Yeah.

Austin
Well, and I think to your point, one thing we'll come back to again and again and again, do we trust the Lord to be our provider, right? Or are we trusting in these investment firms for our future security? And I think that really needs to be a core piece of the question is, is my faith in the Lord that he will provide my daily bread both today and in the future?

Austin
Or do I feel like I so need to perfectly invest in the market, invest in ways that are going to guarantee me future returns so that my future is stable, so that my whatever desires that I have for future life are stable, is my trust in those companies, are my trust in the Lord.

Spencer
Well, and I think if we even hone in on that question a little bit more, you know, one of the things that sometimes we're asked is, okay, if if this approach, if it performs worse than, say, a general market approach, does, are we mismanaging God's resources? And I think we come back to, you know, the idea that God, if God is our provider, if he is the one that created the universe and he owns it all, then he doesn't need us to get a little bit higher rate of return.

Spencer
What he actually needs us to do is be faithful. Yeah. So, what or what he's calling us to do is to be faithful. Now, again, what we would hope to be able to do is to have a rate of return that is not terribly dissimilar from what we would see in the investment markets, because at the end of the day, we still are investing in companies that are publicly traded.

Spencer
We're just doing so in a way that we're trying to avoid ill gotten gains and kind of encourage those practices that seem to be a bit more redemptive. Yeah. and, you know, and one of the other kind of underlying questions that we would get from clients, that might not even ever be stated would be, you know, if I invest in a way that provides a lesser return, that could it keep me from actually having enough?

Spencer
And I think this is, again, one of those thorny things where we say, you know, if I put on my, investment advisor financial planner hat and say, okay, well, we don't know. but the rate of return, it could theoretically be less on these investments that you make, because we're screening out some of these investments. Could be less then, you know, if we trace that through your financial plan, then, yes, you could have less at the end of your life.

Spencer
And if you were already pretty close to not having enough, then. But theoretically, we could say yes, maybe. Maybe there's not, the resources there. all of that is hypothetical, you know, in nature. But again, it comes back to us trying to, trying to optimize things, for the highest rate of return, that being like, the entire goal, the only goal, you know, so to speak, when we look at, you know, what the biblical wisdom would be?

Spencer
it'd be. Yeah. God expects a rate of return. There's an expected level of profitability, but that's not the only consideration that we're looking at there. Yeah.

Austin
Well, as I think about the entirety of human history, this idea to invest in thousands of companies is a relatively new phenomenon. Right. And throughout human history, God has always provided for his people. He always looks out for his people in it. Oftentimes, it doesn't look like the ways that I perceive or think that it should work out.

Austin
but I have to return is my faith in Jesus. where is my faith in my ability to generate a rate of return? It needs to be in Jesus, and I have to continue to come back to that question. Well, is having enough really the end goal was faithfulness in Jesus? and really in a lot of ways, and a lot of times I look back at myself and I think, what am I providing for?

Austin
is it providing security so that I don't need to trust in the Lord? How much are my investments really shielding me from actually putting my faith in Jesus? Right. And I think those are the harder questions to really come back to you. These frequently asked ones, they are important to come to. But I think the heart level things of where is my trust?

Austin
Am I really asking that question of how much is enough for me? How much is enough for the next generation? How much am I keeping for myself? That is maybe above what I need to keep. Those are really the heart level pieces that we we want to drive home towards. Let's say yes, these are these are good questions to ask.

Austin
But where is my heart? Am I? Am I soft towards the Lord in trusting his provision, or am I? Am I just trying to keep it at arm's base so that I know that I will be secure?

Spencer
Right? And part of it is, once we even start to have that conversation, we can start to say, okay, well, I've been over here. Let's just be honest. I've been over here kind of with the world story of investment, of I want to be really well diversified, and I want to try to maximize gain, you know, relative to risk and those kinds of different things, you know, what is it?

Spencer
What might the Lord be inviting me to, in terms of, of maybe changing the approach or altering the approach that I've been taking? And this is something, you know, as we talk with clients, we're never going to beat a client over the head and say, you've got to go this, you know, particular approach, we, we do our best to lay out the different frameworks.

Spencer
if there is a client that clearly does not line up with this in terms of core values, then again, we're not going to push them off the ledge and say, hey, you still got to go this direction. because we do recognize that if we screen certain firms that the rate of return is going to differ from the market's return.

Spencer
Now, that could be better. That could be worse. it could be close to the same, but because you're not investing in all the same funds or all the same, companies, then it one would logically expect those rates of return to be different. so we just have to we, you know, we have to be willing to embrace that as part of the approach that we're going to take if we choose to implement it.

Spencer
Yeah.

Austin
Well, thanks for walking us through that last little piece there, Spencer. The reality is, investing in a biblically responsible way can be really complex and it can be really challenging. Clients. We would love to have a conversation with you. If you've got questions, feel free to leave them in the comments below and we look forward to seeing you again next time.

Spencer
We want to thank our friends at the Eventide Center for Faith and investing, Jason Meyer and his team did a fantastic job helping us to grapple with the biblical wisdom on investing. Many of the quotes and thought leaders that we cite come from their original research.

Austin
If you found this episode valuable, share it with a friend and subscribe on your favorite podcast platform so that you don't miss the next episode.

Summary & Disclosure
This content was provided by Second Half Stewardship. We are in Knoxville, Tennessee and you can visit our website at www.SecondHalfStewardship.com. The information in this recording is intended for general, educational and informational purposes only, and should not be construed as investment advisory, financial planning, legal, tax or other professional advice based on your specific situation. Please consult your professional advisor before taking any action based on its contents.