Q: I have recently become more interested in investing and trying to increase my financial literacy. I have a 401(k) at my work, IRAs, and other taxable accounts that I want to begin putting more money into. However, I recently came across a few articles that gave me pause. They talk about how “many investors are surprised to learn what activities they are profiting from and supporting through the companies they own in their investment portfolios.” The articles go into more detail about how the abortion, pornography, etc., industries get into your investment portfolio. I do not hate my job, but it is not something I want to be doing until I am 67. I am trying to develop the financial freedom to not be reliant on a 9-to-5 job. While I am aware of various types of degrees and kinds of cooperation with evil — formal vs. material, mediate vs. immediate, and proximate vs. remote — my knowledge is not perfect on the topic. Would investing in 401(k), IRA, other investment accounts that contain these broad index mutual funds that follow the stock market (i.e., Total Stock Market Index, S&P 500 Index, etc.) be acceptable? – J.H.
Answered by Fr. Edward McIlmail, LC
A: There aren’t too many easy-to-draw boundaries as regards what isn’t and isn’t acceptable in terms of investing.
That you are concerned about unethical investments shows that you have a conscience and that you are aware of the moral pitfalls out there.
A quick suggestion is to see the U.S. bishops’ conference webpage on responsible investment guidelines and then take matters to prayer.
You might want to keep a bird’s-eye view, too. Instead of focusing on how you can tiptoe through a swamp, it might be better to look for a fresher body of water altogether.
If you are worried about investing in a company that does dicey things, then you might want to seek out funds that intentionally invest in firms that espouse products and services that are compatible with Christian beliefs. One example is Ave Maria Funds.
Perhaps you can network with other faith-filled people to learn about the options out there, and to inform others. Or you might consider ways to join with others to persuade companies to forgo questionable practices.
Some of this might seem like a long shot. But unless we try to get a countercurrent going, the culture around us could continue to go downhill.
And along the way, as you focus on the moral dimensions of the economy in a positive way, the attraction of financial security – which can be an illusory goal — won’t be such a key issue. “Seek first the kingdom [of God] and his righteousness” (Matthew 6:33).
For an overview of Catholic teaching on the economy, see Chapter 7 of the Compendium of the Social Doctrine of the Church.
You mention about not wanting to stick with the same job until you are 67. It’s not bad to plan prudently, but it can be dicey to try to plan too far ahead. We simply don’t know what lies in the future. Remember the parable of the rich man who wanted to build bigger barns.
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