The primary goal of investing is to earn a profit and build wealth.
This sentiment is, however, slowly changing, with a section of investors looking for much more than profitable returns.
These investors (both teens and adults) have realized the benefits of investing in things that matter. They now want to put their money into companies or products that offer good returns and, at the same time, line up with their religious beliefs. This way, even as they rake in profits, they do it with a clean conscience.
In this article, we take an in-depth look at an investment philosophy that’s quickly gaining traction and explore ways you can make it work for you.
What Exactly Is Faith-Based Financial Planning?
Contrary to popular misconception, faith-based investing has nothing to do with buying and selling stocks of religious organizations. As you’re probably aware, churches are non-profits which means they do NOT issue public shares.
Just like other investment philosophies, faith-based investing aim’s at maximizing investors’ returns. The difference is that investors don’t just choose any investment but those that align with Biblically aligned principles. Their goal is to make a difference with their investments.
This type of Socially Responsible Investing includes things like caring for wildlife, society, and the environment. Your faith, beliefs, and values determine where you invest your money.
What Companies Can I Invest In?
Every major religious denomination specifies how to invest money in support of favored causes and against causes that contradict their views and values.
As a faith-based investor, your investing principles should revolve around Biblical principles and the yearning to honor God with your financial returns.
You can invest in funds or companies that support various positive issues, such as:
- Human rights
- Environmental conservation
- Fair employment practices
- Diversity and inclusion
In 2022, there are many funds, companies, funds, and investment firms where such values form part of their investing philosophy. They include Catholic Investment Services, GuideStone Funds, and Global X S&P 500 Catholic Values ETF.
What Companies Can I Not Invest In?
As a faith-based investor, you should stay clear of investments that support things like:
- Adult entertainment
- Weapons
- Drugs and alcohol
- Gambling
- Abortion
- Embryonic stem-cells research
- Predatory lending (payday loans and shylocking)
- Human rights violation
Is Faith Based Financial Planning Worth It?
Absolutely!
If you research the right investing platforms, you can secure your future and feel proud of how your money is being invested.
However, it’s worth mentioning that faith-based financial planning for teens faces similar risks as other investment philosophies. Even though your investment is in line with your religious beliefs, it does not necessarily guarantee you a profitable return.
Faith-based investments are also affected by external issues like:
- Market sentiments
- Interest rates
- Economic conditions
- Geopolitical problems
- Changes in government policy
So, do due diligence to make an informed decision. Avoid rushing investment decisions just because a particular investment aligns with your religious beliefs. Your ignorance can cost you big time.
Perform extensive research and opt for a company that charges reasonable fees, shows growth potential and proves strong financial standing.
Limitations of Faith-Based Financial Planning
This type of investing is associated with a few limitations:
- Historically, faith-based investments haven’t performed well compared to traditional, secular portfolios
- You will have to part with high fees and expense ratios
- As an investor, your diversifying options are somewhat limited
As faith-based investing becomes increasingly popular each day, some of these downsides will slowly disappear.
Conclusion
Faith-based financial planning does more than just multiply your money – it allows you to make selections through the lens of your religious values.
In case you still experience difficulty finding a suitable investment based on your religious values, seek the services of a financial advisor who observes faith-based financial planning.
With their help, you can easily identify stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other investment vehicles that align with your personal faith.
Happy investing!