I am frequently asked about what level of responsibility we Catholics have to take moral criteria into account with our investment dollars. How should we view investing in a large conglomerate that on the one hand produces a number of good products, but on the other hand makes an annual donation to Planned Parenthood? Or a large drug manufacturer that does a great deal of good, but also manufactures an abortifacient birth control pill?
Difficult Lines to Draw
Pope John Paul II wrote, “Even the decision to invest in one place rather than another, is always a moral and cultural choice.” We certainly want to “do what is good and avoid what is evil” in our investment decisions, but because the economy is so complex, it can be difficult to draw black and white lines.
Concerned Catholics typically need to answer whether their investing in a company creates a level of cooperation that is problematic. In the vast majority of cases, the cooperation ends up being of a very limited nature. The company is typically involved in a number of positive areas, but may have a product line or make certain donations that are deemed immoral. Because the concerned Catholic doesn’t share the goal of the company when it comes to those areas, there is no formal cooperation. The actual investment does involve a certain level of material cooperation, but this needs to be looked at in light of the magnitude of the investment. In the typical scenario, the investment represents a very small fraction of the company’s funding, and the investor has a very limited ability to influence its decisions. Because of this, any cooperation tends to be remote in nature, and accordingly, investing in such companies is not disallowed.
At the same time, it would be a good thing to be able to invest solely in companies that promote the good, and that is becoming easier today. There are several mutual funds that are available that screen their investments to exclude companies that have problematic activities. While not obligated to use them, to the extent that these funds are able to offer the same benefits to the Catholic investor that secular funds do, they are certainly worth considering as part of your investment portfolio.
More information is available about this topic here and here.
Avoid Get-Rich-Quick Schemes
One of the sad aspects of investment scams is that frequently those who can least afford to lose the money find themselves victims of a fraud. I just received a letter from one family who fell into this trap. Their financial situation had been tight for some time, with growing credit card bills, when the wife heard about an opportunity for a home-based business that would allow her to stay home with their children while generating sufficient income to pay down their debts. In order to get started in the business, a $12,000 fee was required, plus equipment and training to the tune of another $4,000. Since the couple had no savings, these charges also went on credit cards.
You can guess what happened. After taking money from who knows how many people, the operators are nowhere to be found. Now this family, who already had credit card problems, is in the position of having added thousands of dollars more to their debt.
How can you avoid making a costly mistake such as this one? The following principles in the Bible will help you avoid investment scams. First, don’t fall into the trap of seeking quick riches. In Proverbs 13:11, we read “Wealth hastily gotten will dwindle, but he who gathers little by little will increase it.” Take time to adequately research any investment before you hand over funds. Proverbs 21:5 says, “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want.” In other words, if it sounds too good to be true, it probably is.
Of equal importance to solid research is seeking good counsel, especially from your spouse. And don’t borrow money to invest unless there is a guaranteed method of repayment. If you’ll be relying on the value of the investment to pay back the debt, remember Proverbs 27:1, which warns, “Do not boast about tomorrow, for you do not know what a day may bring forth.”
A Word about Gambling
Using the excuse that they simply want to “live life to its fullest,” people often experiment with behaviors that, in reality, have nothing to do with living a full life, but rather, a life of bondage. These behaviors include drug and alcohol abuse, sexual activity outside of the marriage covenant, and one that I would add to the list: compulsive gambling.
Let me share a true story with you about a married couple, Ed and Sue. A number of years ago, Ed lived in a state where gambling was legal, and he was itching to play the slot machines when he turned 21. It started innocently enough, but as time passed, he felt the need to keep going back to the casino. After several years of marriage and parenthood, he found it added an excitement to his life that he otherwise believed was missing.
He didn’t realize that he had become addicted to gambling. Ed found himself lying to his wife and co-workers about how he was spending his time. Since he was handling the family finances, he also had to lie to his wife about where their money was going. He made a good income, yet even that wasn’t enough to feed his habit. So in order to keep gambling, he accepted one credit card after another, relying on advances from new accounts to meet his minimum payments on the older ones. In the end, Ed had amassed $140,000 in debt on 28 credit cards!
But it didn’t stop there. As a trusted financial officer, he embezzled another $360,000 from his employer. It all came crashing down when Ed finally realized how far in over his head he was. In desperation, he even became suicidal. Thanks be to God, he sought help at a Catholic hospital, and ever so slowly, he and Sue have rebuilt their life together. But on the way, they have had to declare bankruptcy, and Ed spent some time in prison after being convicted of embezzlement.
You may say this will never happen to you, but I guarantee, Ed and Sue never thought it would happen to them, either. It’s true — the Church doesn’t consider games of chance in themselves to be contrary to justice. Yet the Catechism says, “They become morally unacceptable when they deprive someone of what is necessary to provide for his needs and those of others. The passion for gambling risks becoming an enslavement” (2413).
Gambling has proliferated over the last two decades, with expansions of state lotteries and Indian casinos. The National Gambling Impact Study Commission’s report, which was released in 1999, noted that in 1989, gambling was legal in only two states. By 1999, it was legal in 48 states, causing much wider devastation than ever before on the family. I encourage you to avoid the dangers associated with gambling and seek a more wholesome form of entertainment and recreation.
Phil Lenahan is President of Veritas Financial Ministries. If you have questions you would like Phil to address, please email them to [email protected].
