As a financial planner with a career that has spanned more than 30 years, there is a process I use with clients to navigate the waters of uncertainty.
I support Faith-Based Investing as a conscious decision to invest (to take action) based on obedience to God’s teachings. It is a decision to buy or lend one’s money to make a profitable return in companies that align with one’s closely held principles and beliefs. The process I follow to demonstrate good stewardship of the resources God has entrusted to a follower is to let Why, What, When, and Where guide your path.
1. Why – Why are you investing the resources? Has the purpose been defined? Some goals for investing may be short-term like purchasing a car or saving for a downpayment on a home. Mid-term investing may be for education planning or big wedding days. Longer-term investing may be for retirement, providing for long-term care needs, or generational inheritance. Investing should always be done with a purpose – the why – in mind.
2. What – All investing comes with the risk of principal loss. Understanding the correct balance of risk exposure is essential to a successful investment strategy. What is the least amount of risk needed to achieve the preset investment goal(s)? Risk is important to understand to avoid making potentially costly emotional decisions during market contractions.
3. When – The best time to start investing is as early as possible. Investing benefits from compound interest, meaning the sooner you begin, the more your money can grow over time. However, before investing, ensure you have a stable financial foundation. This includes having an emergency fund (3–6 months of expenses), paying off high-interest debt (like credit cards), and having a steady income.
Once your finances are stable, you can start investing, even with small amounts. Many people begin in their 20s or 30s, but it’s never too late. If you’re younger, you can take more risks with stocks since you have time to recover from market downturns. The key is to invest consistently with your goal(s) in mind.
4. Where – Through a Pro-family, Pro-life, and Pro-Community approach, Faith-based investing helps investors align their financial stewardship with Godly principles and find a sense of peace in the companies included in their investment strategy. Knowing the companies is where stewardship begins and ends. I often ask clients two questions. First, “Would you want to know if there was a company in your investment strategy that didn’t align with your closely held beliefs and principles?” Second, “If you found out there was a company in your investment mix that didn’t meet your standards, would you have the courage to make a change?”
For many of our clients and followers, the foundational principle of investing is that God owns everything. When we align ourselves with that truth and answer the Why, What, When, and Where questions for ourselves, investing from a faith-based viewpoint becomes part of our daily walk with Him.
– Michael Wallin, Managing Partner of Optivise Advisory Services. For more information, please see www.optiviseria.com/investor/.
