February 24, 2014

Investing the Warren Buffett (Biblical) Way

by Clint Archer

Warren Buffett, nicknamed the Oracle of Omaha, is known as the world’s greatest investor. In 1950, at age 20, he had saved $9,400 (about $100k in today’s money). He set out to invest it, applying his long-term, value-based, focussed portfolio philosophy, which his author Robert Hagstrom termed “The Warren Buffett Way.”  Buffett increased his net worth to $62 billion, making him the richest person in the world. Nipping at his heels for that enviable title was the young Microsoft mogul, Bill Gates.Bill Gates and Buffet

The two richest men in the world were friends, with a friendly rivalry about their wealth. They were not competing to see who could have the most money. Instead, paradoxically, their rivalry was a race to give away money to worthy causes. Together the Buffett Foundation and the Bill & Melinda Gates Foundation were donating hundreds of millions and billions of dollars to a long list of charities, including the global eradication of polio, child vaccination efforts, HIV research, and neglected tropical diseases such as leprosy.

But on July 25, 1996 the rivalry came to an abrupt and unpredictable end.

It was then that Warren Buffett held a press conference in which he committed to give away 99% of his wealth in one day. He handed out six letters. Five of them went to his children and close family, giving them a relatively small amount (supposedly only a few million each), and the sixth letter contained his intention to give everything else to a single cause. I’m sure everyone who had been invited was holding their breath. Who on earth would the richest person in the world give his money to? Buffett announced without any hesitation that his intention was to give 99% of his net worth to… the second richest man in the world, Bill Gates.

Buffett explained that it was always he and his wife Susan’s plan for him to make as much money as he could, and then for her to not spend it, but give it all away.

Buffett had come to realize that no one else in the world was better equipped to faithfully handle that kind of money than his friend Bill. The Bill & Melinda Gates Foundation had already proven that they knew what money was for, and how to use it as a force for good in the world. It was also the only organization that was equipped for the scale of investment Buffett would bequeath.

This particular investment was perfectly congruent with Buffett’s unwavering philosophy: put your money where it will do “the most good” for the long term, and put it with the people who have the same definition of “the most good” as you do.

Of course, Buffett’s wisdom is derivative of commonplace biblical principles. Consider the parable of the minas (Luke 19:11-27). The master returned to find an unproductive servant who had invested his equivalent of three month’s wage in a handkerchief, stashed in the ground.

He must have thought, “I’m sorry, did you say you deposited my money in a handkerchief? You must mean Handkerchief Bank, or the Handkerchief Investment Growth Fund.” The master asked with incredulity “Why did you not put it in the bank where I could have got it back with interest?”

Then he took the one measly mina and had it given to the guy with who had turned his one into ten. The other servants were taken aback, “Master he has ten!”

But the master, in the voice of Jesus, declared: “I tell you that to everyone who has, more will be given, but from the one who has not, even what he has will be taken away.”

What about you? What are you doing with your gifts, talents, skills, time, money, relationship, and other resources. God entrusted them to you to be invested for the kingdom work. Have you stashed said stewardship in the dirt; or are you redeeming the time, laying up treasure in heaven, and being rich toward God?

1 Peter 4:10-11  As each has received a gift, use it to serve one another, as good stewards of God’s varied grace:  whoever speaks, as one who speaks oracles of God; whoever serves, as one who serves by the strength that God supplies—in order that in everything God may be glorified through Jesus Christ.

Whatever you have is just seed money to be plowed into God’s kingdom. What you sow you will reap, and what you hoard will pop up at the Bēma Seat judgment like a rotten skeleton of wasted chances, to accuse you.

On the other hand, whatever you invest in the kingdom will be waiting for you when you get there, along with the commendation that we all crave: “Well done good servant!”

May you make this day count for Christ, for faithfulness echoes in eternity.

Clint Archer

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Clint has been the pastor of Hillcrest Baptist Church since 2005. He lives in Durban, South Africa with his wife and four kids.
  • 4Commencefiring4

    Most of us think about becoming better off financially by investing wisely, etc. And there’s a lot to be said for that.

    But I’ve come to realize there are four basic ways to make financial mistakes in life:

    1. Buying something you should not have bought.
    2. Not buying something you should have bought.
    3. Selling something you should have kept.
    4. Not selling something you shouldn’t have kept.

    And I’ve made mistakes in every single category, especially #3. If I’d known then what I know now…

    • Better to have bought and sold than never to have bought at all. (not really a proverb, but it should be).

  • Libs

    “…and put it with the people who have the same definition of the ‘most good’ as you do.”
    You may want to dig deeper and then dig some more.
    Thousands of third world children have had a vaccine injury from BG vaccination efforts. (my comment is NOT about pro or anti-vaccine.)

    here’s one link to begin, with references.

    “May you make this day count for Christ, for faithfulness echoes in eternity.”

    Thanks for the reminder.

    • Yeah, my definition of good might be different to Buffett’s; but he is consistent, in that he and Gates have the definition. Both foundations are pro-abortion and pro-vaccines.

  • Tim Eriksen

    I love the blog, and I don’t want to be critical. I would have preferred to send an email privately, but the correct spelling is Buffett. Spell check will constantly change it to Buffet.

    Having read many books on Buffett, I would struggle using him as an example or imply that his approach is a derivative of biblical principles. Since he was confident that he could grow capital at a high rate he deferred most giving throughout his life, thinking that it would be better to have a larger sum later versus a smaller sum now. Much of what he did give was related to population control (abortion). He is more of an example of someone who gained the whole world but lost his soul.

    Having said all that, I fully agree with your concluding points.

    • Thanks Tim, I adjusted he spelling. I was wondering why I kept salivating for a wide variety of foods while writing this post.
      I agree that there is definitely a “build bigger barns” parallel there too.
      Also, Buffett is agnostic, so the fact that he gives anything at all is not driven by the same motives as the widow whose 2 mites added up to more than $60 billion in God’s eyes. Thanks for your input.

  • Clint, this is really a great reminder, a much needed poke in the side 🙂
    Thanks for using your gifts to exhort us on to excellence.

    • You’re welcome Suzanne. Thanks for reading the blog.

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  • Senorita Daffy

    Hmmm, Buffett and Gates…Common core, to the core :/ Not to mention the other “causes” they support.
    Good message, but maybe next time different people to use as examples?