The Good Steward

Joe Kesler

I GOT STUCK IN a conversation at a dinner party recently with a name dropper. It was painful. Wanting to impress me, I suppose, I learned that, “Yes, Janet Yellen and I are good friends. I’ll be traveling to D.C. soon and I’m looking forward to connecting.”

But it didn’t end there. I also heard about this person’s exotic travels and homes around the world. And the fabulous career that supported this lavish lifestyle. And the incredibly insightful views this person had on politics and other issues.

If I’d had the chance, I could have offered that I once met Janet Yellen at the buffet table during a lunch break at a Federal Reserve conference. I said “hello” to her and she said “hello” back. Janet and I are close, too.

I recount this experience not because I think narcissists can’t grow wealthy. They can and do. Still, I think we should look to the old-fashioned virtues of humility and stewardship to guide our thinking about money. King Solomon’s Proverbs tells us, “The outcome of humility and of the fear of the Lord is wealth, honor, and life.” How does this ancient wisdom speak to us in the 21st century? Consider four ways.

First, humility in investing leads us to avoid big investment bets. If the market professionals can’t beat the averages, humble investors will lean toward spreading their money broadly, owning a globally diversified mix of stocks and bonds.

Second, humble investors won’t assume high future investment returns, instead compensating by saving as much as they reasonably can.

Third, humble investors won’t assume that a long life is guaranteed. To protect those who depend on us, we make sure they’ll be okay if something happens to us. This includes not only life and disability insurance, but also a well-designed estate plan.

A fourth lesson comes from the book The Millionaire Next Door: We can’t necessarily spot those around us who have grown wealthy. Why not? Unlike my dinner party friend, the humble wealthy don’t need to impress anyone with a show of wealth. They typically don’t want recognition for donations. That same humility may lead them to drive older cars and wear less expensive clothes, which leads to increased savings. A virtuous cycle exists in the lifestyle of the humble.

But, in my opinion, humility alone isn’t enough to have a successful relationship with money. After writing a book on money a few years ago, I did a number of radio interviews. In one interview on a Christian radio station, I was asked how I could encourage Christians to save money when Jesus taught that we shouldn’t lay up treasures on earth but instead store them in heaven.

It’s a great question—and I think there’s only one answer for those of us in the Christian tradition. We don’t actually own anything in this life. Rather, we are stewards of what we’ve been given and must manage our wealth accordingly. That has three implications for how we handle our money—implications that I think are useful to everybody, no matter what their religious beliefs.

First, as a steward, we need to consider the most effective way we can use our wealth to help others. The radio interviewer may have thought the best way to do that is to give all but essential money to churches and nonprofits. The evidence, however, suggests otherwise.

The World Bank estimates that more than a billion people have been lifted out of extreme poverty in the last 25 years. A realistic goal set by some: Erase almost all abject poverty in the world by 2030.

This incredible progress in eliminating poverty is partly the result of charitable efforts, but it’s also because more people have access to capital, thanks to free markets. To be clear, it’s good to give money to charitable ventures. But in the stewardship model of managing wealth, investing in businesses that employ people—and which provide life-enhancing goods and services—is also a virtuous choice. Since businesses are lifting more people out of poverty that any other efforts, it makes sense to have our money invested there.

Second, a humble person may not be inclined to negotiate a hard bargain for goods and services for him or herself. A good steward, however, will negotiate furiously to get the best deal. Sometimes, I talk to Christians who think it’s virtuous to avoid aggressively pursuing their career. I advise them to change their thinking. Diligent stewards will see maximizing their salary for their God-given abilities as a part of good stewardship, and then they’ll use the resulting wealth to improve the world around them.

Third, the good steward sees all of life as an opportunity to be wise with the resources he or she has been given. Children are to be educated for future productivity. Money is to be grown in investments that serve others. Time is to be used productively, balancing opportunities to work with the need for rest. Supporting the nonprofit sector—both financially and by volunteering—remains an important part of good stewardship.

What happens when humility and stewardship are not central to managing our wealth? Instead of seeing money as a tool to support a purposeful life, it becomes the thing that we imagine gives our life meaning. But that likely won’t satisfy us for long.

Joe Kesler is the author of Smart Money with Purpose and the founder of a website with the same name, which is where a version of this article first appeared. He spent 40 years in community banking, assisting small businesses and consumers. Joe served as chief executive of banks in Illinois and Montana. He currently lives with his wife in Missoula, Montana, spending his time writing on personal finance, serving on two bank boards and hiking in the Rocky Mountains. Check out Joe’s previous articles.

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