Wealth: Believe and prosper

By Rob Gerlsbeck on February 2, 2010
Estimated reading time: 3 minutes

Do traits shared by religious people make them more likely to become rich?

Lisa Keister is an expert on being rich. She’s no investment genius, mind you, so don’t expect to see her hobnobbing at the billionaires’ club with Warren Buffett. Rather Keister, a professor of sociology at Duke University in North Carolina, is an authority on why and how people attain wealth. Keister can reel off a long list of reasons why some people get rich and others don’t: education, inheritance, entrepreneurial savvy. But a few years ago, she began paying closer attention to a cause that she had once dismissed as far-fetched: religion. “I’d mention it at conferences and economists would laugh,” she says. “But when I’d ask people who are religious whether their faith affects how they handle money, they’d say ‘silly academic, of course.’ ” For those who haven’t dusted off their King James Bible in a while, it may come as a surprise, but religion and money go hand in hand. Scripture refers to money and finance over 2,000 times. Prayer only gets 500 mentions. Now researchers are discovering that religious people are better savers. And because they’re less likely to take chances on risky investments, they may do better in the stock market too. Believing in a god on its own isn’t enough to make you a wise money manager. But the values of religious people do affect their approach to money, says Luc Renneboog, a professor of finance at Tilburg University in the Netherlands. In a study last year, Renneboog found that Protestants are more likely to own stocks than Catholics. The reason: Protestants tend to believe that individuals are responsible for their own success or failure. Catholics, meanwhile, place more importance on the security of their families. So they’re more likely to buy a house than stocks, and leave money for their kids. Similarly, Keister found vast differences in wealth in the U.S. between Jews and evangelical Christians (conservative Protestants). Growing up Jewish you’ll learn the importance of investing in stocks at a young age, says Keister. Conservative Protestants on the other hand, shun investing, marry young and put off buying a home. The result: only 1% of Jews in the U.S. have no bank account, no stocks and don’t own a home. Fifteen per cent of conservative Protestants fit that description. “Conservative Protestants think ‘God will take care of me.’ So for them the church is a good investment—stocks not so much,” Keister says. There’s no hard evidence that religious folks are more likely to make a killing in the markets yet. But some have noted that because they are more interested in spiritual than material gain, they may be less susceptible to the greed and fear that can lead investors astray. Certainly George Athanassakos, who teaches value investing at the University of Western Ontario, has noticed that successful value investors tend to act in religious ways. “When I ask them what’s the biggest lesson they’ve learned in life they always respond by saying ‘humility and integrity,’” he says. “This is the foundation of every religion. So even if such investors aren’t religious, they sure behave as if they are.”