What Does it Mean to “Be a Good Steward?”
By: Brian Seay, CFA
What does it mean to be a “good steward?”
I named the firm “The Capital Stewards” for a reason. I’ve discussed stewardship in other articles and podcast episodes, but this is a concept that we all wrestle with so I wanted to lay out a framework that I hope will be helpful as you think about stewarding the resources that you have been entrusted with. The summer is rapidly coming to an end, and I think as routines kick back in, now is a good time to evaluate how you are thinking about your resources. Whether you believe the Bible or not, I think this episode will be helpful in understanding how to think wisely about your money. So if you are interested in making wise decisions about your own money, or if you are responsible for the resources of an organization, I hope you find this helpful in answering the age old question: How do I be a good steward?.”
Transcript:
I used the word “entrusted” above intentionally. Sometimes as people we think of Money as “Good” or “Bad” and our background and beliefs drive most of our personal psychology and feelings about money. How you grew up, your religion, what kind of family you are from, whether you have, in your mind, been “successful” monetarily. All of that drives how we think about money.
So before we can even begin to unpack what it means to be a good steward practically, we need the right perspective on what money and resources are – and more importantly to whom our money and our stuff belongs.
That takes us back to the beginning. That part of Genesis where God created everything. Literally the first chapter of the most read book in the history of the world starts with God creating the earth and then giving man control of all the creation. I made it, here you go, be fruitful and multiply, you will have to work the land, but you’re in charge. We didn’t earn it. All the creatures weren’t created evenly and then Humans came to lord over them after many years of struggle and “survival of the fittest.” Man was given control from day 1 and God’s plan was for us to work the earth alongside him. So having control and dominion over our environment isn’t bad – quite the opposite. It’s the way God intended.
In Genesis 2, one of the lands in creation is described as having “good gold.” This is before the subsequent fall of the man and sin. So Gold, which is the oldest form of money, can’t be bad or immoral. God made it!
But then there is that Bible verse about Money being the root of all evil right? The direct quote from 1st Timothy 6 is that the “love” of money is the root of all sorts of evil. Its is through this craving that some have wandered away from the faith.” The money isn’t good or bad. Loving money more than God is a sin, and that is a problem. In Ecclesiastes 5, verse 10 says whoever loves money never has enough. Whoever loves wealth is never satisfied with their income. When our view of money gets distorted, when our focus on money becomes outsized in our life, we are putting something ahead of God, that’s sinful, and frankly, when we focus too much on money, we aren’t very happy. Jesus says in Matthew that we cannot serve two masters, God and money. This is important, it’s God that is to desired. When we walk in faith, and love, and focus on God, we are living in his plan. That should make us both happy and satisfied.
To be a good steward of your resources, my view is that you have to have something more important in your life than yourself and money. My reading of the bible suggests that loving God and loving others is the primary goal in life. So our money should be a resource to help us love God and love others. If our priorities are out of order, not only are we living in sin, but we are likely not all that happy either. I have met plenty of people who have lots of money and are not happy.
So, money isn’t bad, and it should be in the proper place in our lives. So what should we do with it?
Fast forward to the New Testament, in Matthew 25, Jesus is teaching by telling a story. He describes a master who gives the servants “talents” of money to take care of while he is away. A talent is describing either about 63 pounds of gold or about 6,000 days’ worth of wages. Either way, we are talking about a lot of money. He gives the money in proportion to their gifts, the first gets something like $2,000,000 and he “trades or invests wisely” and doubles the money to $4,000,000 million while the master is away. The second gets $800,000, also invests wisely and doubles the money to $1,600,000 while the master is away. The third gets $400,000. He buries it and simply returns the $400,000 when the master returns. The master congratulates the first two servants and scolds the third. There is a lot in the story to unpack. You may have heard things like “to whom much is given, much is expected.” There is also the implication that the servants have skills, but the real blessing comes from the Master. But for our purposes, the main point is simply that Jesus expects that listeners to the story are wise with the resources they have been given. He suggests that they should be using their skills to wisely invest and grow those resources.
In Proverbs, the book of wisdom, we learn to work hard, save for the future, build wealth over time, and to be generous.
So Money is not good or bad. It’s a tool. Money existed as part of God’s original creation and in many scriptures the teaching is clear that we should use it wisely. So now that we have a biblical foundation to stand on, what does that mean about what we do practically with our money?
1) First we need to check ourselves and make sure our priorities are in the right order. Do we love God and love others? Is that the most important thing. If it is, it makes stewardship easy and removes a lot of the tension.
2) Second. We should be generous.
I believe scripture still asks us to “tithe” today. The word Tithe literally means give the first 10% of our income. In the Old Testament, the Jewish people gave the first part of their earnings in money or other resources to support the temple. In Matthew 25, Jesus rebukes the Pharisees for meticulous tracking their tithes…and of course not giving and penny more…and not also caring about justice and poor. My view is that Jesus is establishing a new perspective on Tithing, just like many of the other Old Testament rules. The point isn’t to follow the rule to the letter and give exactly 10% and not a penny less or more to our local church. The point is to have our priorities in order. To love others and be generous first. Doing that should bring joy, contentment and happiness. Whether you give 10% to your church, or you give some to your church and some to other religious organizations or even directly to other people to support those that are less fortunate, all of that seems to fit Jesus primary objective of generosity and putting God first. In a new testament world, our hearts and intentions are the focus, not the “rules.”
Should we give away more than 10%? I think the answer depends on your situation in life and calling. God does not ask us to give so much that we cannot support our family. But we should give enough that our primary money motivation and perhaps the biggest single slice of what we do with money is focused on others. If someone looked at your habits around giving, would that say that God, the church, and your community were the priority in your life? Or is it simply saving for a rainy day or buying nice things. All of those things aren’t necessarily “non-profits” or 501c3 organizations. You might do something to build your family – to make your family more faithful and focused on God. You might give to another family. Pay for someone’s schooling. There are lots of ways to be generous. I think when we give enough, whatever that number is, it should be easy for us to look at our own finances and see that others are the primary motivation.
3) Once we give, then we should use the rest to invest, grow and enjoy. Yes, it’s ok to enjoy our resources. God gave us the world to enjoy it – and him. In Ecclesiastes 5:19 it says that if God gives wealth, then enjoy it and be happy. Often us financial types get the reputation for telling folks to drive a Honda and never go on vacation. I think we should be wise with our resources and not overspend, but we should enjoy our lives with what we aren’t saving or giving away. God didn’t create Humans for us to suffer until he returns. He intended for like to be enjoyed. Even if you aren’t a believer, modern psychology suggests the same thing. We actually see higher savings success rates for people that give themselves small rewards as opposed to those who draconianly save and never spend.
4) I think its intentional that much – if not all – of the data science we have around investing confirms the ancient wisdom we see in the Bible. We know that successful investing involves staying the course and allowing returns to compound over time. “Quick” strategies tend to ultimately fail, and Morningstar’s research shows that most professional – and retail investors – tend to underperform the benchmarks over time. We know from Ibbotson’s work that asset allocation and simply staying invested in the market are the most significant drivers of long-term return differences among investors. Patience is rewarded over the long term. This is not a biblical case for index investing – but it is the case for buying assets you can own for the long-term as opposed to trying to day-trade your way to investing success. Its also intriguing to me that we started with Proverbs thousands of years ago, and with the advent of modern research and statistics, we have basically simply returned to the God-given ancient wisdom. Over time, the Bible seems to prove itself out.
5) Part of Biblical wisdom is working hard and doing due diligence. So often, people are is taken advantage of. Whether that’s investors in a heard to invest in start-ups with no earnings (see 2019), crypto, or gifts to organizations that ultimately fail to steward assets well in your community. Due diligence is so important. You should never be investing or giving money without verifying the work that the recipients of your investment are doing. You should never be investing with firms that follow the heard and don’t complete their own diligence…and yes…this has happened at big, brand named shops on Wall Street over the last 5 years. Doing the work is important so that we don’t lose the resources we have been entrusted with. There are no short-cuts.
In summary, stewardship is about having something more important in your life than yourself and money. My reading of the bible suggests that loving God and loving others is the primary goal in life. So, our money should be a resource to help us love God and love others. If our priorities are out of order, not only are we living in sin, but we are likely not all that happy either. I have met plenty of people who have lots of money and are not happy. Once we get our priorities right, I think ancient Biblical wisdom should inform how we manage our resources. Its clear that generosity, both formally and informally, is not just a biblical mandate, but also key for our own satisfaction and happiness. Lastly, building and managing wealth is a long-term activity that requires hard work, commitment to excellence and wisdom. The Matthew 25 parable suggests the importance of all three qualities, hard work, excellence and wisdom. There are no short-cuts to good stewardship, but the journey is powerful. It can change the our communities, the world and perhaps most surprisingly – make us supremely happy knowing that we are living wisely.