Biblical Risk Management

My subject today is Biblical risk management. And this is very much a part of our series on the Christian and prosperity. But again, it is a subject that affects all of life. It affects church strategy. It affects leadership in the home. It affects our views of birth control. It affects our views on finances, prayer, obedience to the Lord on an issue we fear. And so I think that this is an important topic. It is dealt with in the book of Deuteronomy, but I thought that this passage pulled out more principles than any one passage in Deuteronomy, so we will stick with Matthew 25.

Now I define risk very simply as any decision or action that exposes someone to the possibility of loss or injury. Risk is any decision or action that exposes someone to the possibility of loss or injury. If you take a risk you can lose money, you can lose face in front of others, you can lose your life, your position. And if you take a risk, you may also endanger other people in the process. Is it wise to take a risk? Is it loving to endanger others? It all depends. Sometimes a failure to take a risky action may result in loss and injury as well. Sometimes the most unwise thing you can do is to play it safe. Most people hate risk, and their aversion to risk paralyzes them from making the right decisions, or makes them so slow to make the right decision that they make the decision too late.

Risk is unavoidable if you are not God

And the first point that I want to look at is that risk is unavoidable. This is one of the most important points in this sermon. If you are the kind of person who hates making decisions because you hate taking risks, you need to lay hold of this point. Unless you are God, risk is unavoidable.

Only God is omniscient and risk comes with ignorance. "Unfortunately," Christ is "in a far country" and doesn't make our decisions for us (v. 14)

It's unavoidable first of all because we are not omniscient. If we knew all things before they happened, then we would have no risks. And that means in the true sense of the term, there is no risk for God. And if you were omniscient like God is, then there would be no risk in investing in the stock market because you would know ahead of time the value that each stock would have next month, next year and ten years from now. There would be no risk in getting married because you would know ahead of time the character of the person you were marrying, and whether that person would divorce you or cheat on you in ten years. There would be no risk in having children. But with increased ignorance comes increased risk. And God intended it to be that way.

You see, Jesus is the man who travels to a far country in verse 14. For the kingdom of heaven is like a man traveling to a far country, who called his own servants and delivered his goods to them. In verse 15 it says, immediately, he went on a journey. We might think that it would be wonderful if Jesus had not gone to heaven; if He would be right by our side telling us every decision that we have to make. If He were here, He could tell us which furnace was the best furnace to put in our house, and we would be able to avoid all lemons. He could tell us exactly which discipline to give to each child to produce just the right results. He could tell us which neighbor to talk to about the Gospel and which ones wouldn't be receptive. But unfortunately, verse 14 says that Jesus has gone to a far country and we have to manage His goods without always knowing what decision He would have made if He was here.

And we might say, "Yeah, but we have His Word." That's true, and that gives us a tremendous advantage over unbelievers in managing risk. We have knowledge that they don't have. But it doesn't do away with risk because we don't always perfectly interpret the Word of God, or perfectly apply it to our situations like Christ could. And you might say, "Yeah, but James 1 promises that if any of us lacks wisdom, we can ask of God, and if we ask in faith God will give us the needed wisdom. Praise God that is true, and that gives us a tremendous advantage over unbelievers in managing risk. But it doesn't do away with risk.

Paul received more revelations than any of us ever have or ever will, yet he took risks, not knowing what the outcome of his decisions would be.. The prophet Agabus in Acts 21:10 warned Paul that if he went to Jerusalem, he would be captured by the Jews and handed over the Gentiles. But Paul's passion for the cause of Christ was so strong that he was willing to take the risk of death. He didn't end up dying on that trip, but he was willing to. He said, "What do you mean by weeping and breaking my heart? For I am ready not only to be bound, but also to die at Jersualem for the name of the Lord Jesus." So when he would not persuaded, we ceased, saying, "The will of the Lord be done." We don't always know what the will of the Lord is. Queen Esther knew that she could die if she went into the king without being asked, but she took a risk to save her people and said, "If I perish, I perish." King David took risks for the cause of God, and he was right in doing so.

The whole of Paul's life was one extraordinary risk after another, and if he had played it safe, he would not have turned the Gentile world upside down with the gospel. In Acts 20:23 he said, The Holy Spirit testifies in every city that imprisonment and afflictions await me." But he never knew what form those afflictions would take. Let me read you a brief description of the risks Paul had already survived in 2 Corinthians 11.

Corinthians 11:24 From the Jews five times I received forty stripes minus one.

2Corinthians 11:25 Three times I was beaten with rods; once I was stoned; three times I was shipwrecked; a night and a day I have been in the deep;

2Corinthians 11:26 in journeys often, in perils of waters, in perils of robbers, in perils of my own countrymen, in perils of the Gentiles, in perils in the city, in perils in the wilderness, in perils in the sea, in perils among false brethren;

2Corinthians 11:27 in weariness and toil, in sleeplessness often, in hunger and thirst, in fastings often, in cold and nakedness —

2Corinthians 11:28 besides the other things, what comes upon me daily: my deep concern for all the churches.

Paul never knew where his next blow would come from. Every day he risked his life for the cause of God, and God was pleased with the risks that he took. The roads weren't safe, the seas weren't that safe. There were bandits on the road. The Jews weren't safe. Nor were the Gentiles. Even the church wasn't always safe because he got stabbed in the back by believers more than once. Absolute safety is an illusion. It does not exist. The safest place to be is in the center of God's will.

Now in the outline I say, "Unfortunately, Jesus is in a far country." I put the word "unfortunately" in quotes because it is tongue in cheek. It's really not unfortunate that Jesus decided not to baby sit us.. Facing the risks of life is part of our maturing into dominion creatures. And risk is built right into the fabric of our finite lives. When you get into your car and drive onto Dodge Street, you don't know if a drunk driver will head into your lane and kill you.. You don't know if the food you ate at the restaurant last Friday had a deadly virus in it. If Tom had known about his heart condition, he might not have taken the risks of riding his bike during the past six months. Our ignorance of certain things guarantees that we cannot avoid all risks. Praise God that we are not totally ignorant, which means we have a responsibility to minimize risk. But we will get to that later.

Since God owns it all (v. 14), we face the risks of accountability (vv. 19)

A second reason why risk is unavoidable is that we cannot avoid accountability to God just by avoiding responsibility. Verse 14 indicates that what the man delivers to his servants is property that belongs to him - and delivered his goods to them. All that we have and are and own belongs ultimately to the Lord. Which means that we constantly face the risk of God's disapproval of how we handle our stewardship charge. Look at verse 19 After a long time the lord of those servants came and settled accounts with them. We tend not to think about the future when we settle accounts with God, but even though it is a distant risk, it’s a far more important risk than the one's that we tend to try to avoid. Since God owns it all, we face the risks of accountability.

Wealth does not change the degree of risk (v. 15ff) (Though wealthy people have often learned how to manage risk successfully.)

Point C: Wealth does not change the degree of risk that we face. A talent was a measure of weight. You can have a talent of gold, a talent of silver or a talent of copper. Verse 18 uses the term argurion, which is silver, so we know exactly how much silver was given. Rather than putting the value into American dollars, which is constantly changing, D.A. Carson said the best method is to look at the buying power of silver in Christ's day. One talent of silver was equivalent to a working man's wages for twenty years. That's a lot of mulah. Every one of these servants was given a pile of money that most people would not have dreamed of. They all had wealth. And yet the parable makes clear that wealth does not change the degree of risk. The one with five talents could have lost it all in trading. God could have made his ships sink and his camel caravans be marauded by bandits. On the other hand, it is clear that the man with one talent risked losing it all when the master came back because of his unfaithfulness. It doesn't matter whether we have little or much, risk remains.

Now it's true that wealthy people have often learned how to manage risk much more successfully than poor people. And that's why they are still rich. But we all know rich people who have lost it all. And we know poor people who have won a million dollars in the lottery and blow it all within a few years. Wealth does not diminish risk.

Avoiding one set of risks always means facing a different set of risks (v. 18 with vv 24-30)

And I've already stated point D: Avoiding one set of risks always means facing a different set of risks. The man with the one talent feared short term risks more than the long term risks.

Risk should not be either relished or feared

But let's move on to point II. Just because risk is unavoidable in life does not mean that we should be controlled by risk. And there are two ways we can be controlled by risk. WE can relish it or we can fear it.

Those who unduly fear risk (v. 18,25) are often controlled by risk at the expense of dominion

The man with the one talent says in verse 25, And I was afraid, and went and hid your talent in the ground. Fear of the risk of loss was so overwhelming that he refused to take dominion with the money. So point A says, "Those who unduly fear risk (v. 18,25) are often controlled by risk at the expense of dominion."

Those (like gamblers, daredevils, etc.) who are intrigued by risk are often controlled by risk at the expense of dominion

But point B shows the opposite extreme. "Those (like gamblers, daredevils, etc) who are intrigued by risk are often controlled by risk at the expense of dominion as well. People have justified gambling with the excuse that all of life is a gamble anyway; investment in the stock market is a gamble. But I am convinced that there is a fundamental difference between the two. I explain the difference with the word dominion. Thomas Sowell explains the difference simply from an economic perspective. He says this: "Speculation is often misunderstood as being the same as gambling, when in fact it is the opposite of gambling. [And you would have to read the whole chapter to see how he demonstrates that it is the opposite. But in this paragraph he summarizes. He says] What gambling involves, whether in games of chance or in actions like playing Russian roulette, is creating a risk that would otherwise not exist, in order either to profit or to exhibit one's skill or lack of fear. What economic speculation involves is coping with an inherent risk in such a way as to minimize it and to leave it to be borne by whoever is best equipped to bear it." (p. 179 of Basic Economics) And He uses examples like insurance companies being hired by you to manage some of your risks. Or commodity speculators being paid to help manage risk for farmers.

The dominionist neither fears nor relishes risk. His focus is on the Lord and maximizing dominion

The dominionist neither fears nor relishes risk. His focus is on the Lord and maximizing dominion and to the best of his ability minimzing the risk. And this doesn't have to deal with money at all. A man may see a godly woman as his number one choice, but because of fear of the risk of rejection, never asks her. In fact, I knew a man in Canada who left Holland out of shame because three times it came to the wedding day and he didn't show up because of fear of the risks of marriage. He never ended up getting married even though he loved her.

So yes, risks are unavoidable, but point II, they should be neither feared nor relished as an end in themselves, but should be minimize through wise stewardship - like spreading the risk, hiring others to manage the risk, etc. We won't get into all that, but there are books that teach us the skills of risk management. I just want to give you the Biblical principles here and motivate you to do some reading on your own.

Therefore, appropriate risk taking is pleasing to God (vv. 16-17 - "traded")

But point III, the logical conclusion is that appropriate risk taking is pleasing to God. The first two servants went and immediately traded with the money.1 Since they traded with the money, we can assume that they put their capital at risk. Yet the lord was pleased with them in verses 21 and 23. He said, "Well done, good and faithful servant." Really, the only investment in this whole chapter which had a fairly guaranteed rate of return in ancient Rome was the bank deposit mentioned in verse 27. It was a small rate of return. In 30 AD, the Roman bankers charged 12% according to several sources that I have, but you didn't get that when you deposited your money in the bank. You were happy if you got half that. The first two men chose instead to trade - a venture that involved shipping, caravans, and many more risks. Their ships could have gone down. Their caravans could have been marauded. There were many more risks. Yet the master was pleased with them. The master praised these men for managing risk, just as he will praise you and I if we manage risks in a Biblical fashion. And if you have never thought about risk management, you should. It is part and parcel of every person's dominion mandate. How you steward your roof and the faulty pilot light on your stove is part of risk management.

The degree of risk varies not only with the kind of investment (the trading of verse 16 versus the banking of verse 27) but also with the period of time ("a long time" verse 19)

The fourth principle that at least deserves some mention (even though I'm not going to spend a lot of time on it) is that the degree of risk varies not only in the kind of investment that you engage in, but also in the period of time over which something is invested. Thomas Sowell devotes three whole chapters to this in basic economics. I only have time for a couple of minutes. But for those of you who have read the book, I think you can see the principles in this parable:

Each of the first two men doubled their money in the years that the master was away. We aren't told how many years he was gone, but verse 19 says it was a long time… and verses 20 and 22 indicate that they doubled their money once during that long time. What's a long time for a master to be away? Who knows? Maybe two years is considered a long time to not have an accounting of your money. Maybe it's five. We're not told. But using the "rule of 72" you can see various scenarios of how long it would take for them to double their money at any given interest rate. We do know what the legal ceiling on interest rates were in 30 AD. In fact, during all of Christ's life time there was a Roman law punishing bankers who charged more than 12%2. Actually I just learned some of this from a book by Jean Andreau published by the Cambridge University Press. It's an interesting study on wages, inflation, interest rates, banking laws, price controls, etc. in ancient Rome. And the most that a commercial banker could get for his money was 12%. There were some other investments that brought in 30% and for some risky trading ventures it was even as high as 60%. But let's just assume the most conservative figure during this non-inflationary period, and that rather than trading (which is what the NKJV translation has us believe they did), they simply lent out the money at 12%. The rule of 72 would estimate that the first two men could double the money in at least six years on the most conservative estimate, whereas it would take the method mentioned in verse 27 between 14 and 24 years to double, depending on how good a deal he could cut with the bankers. Strict banking laws in Rome made it a much less risky to deposit money with a banker than it was to lend money, but it didn't pay much. You can run the numbers yourself using the Rule of 72. We don't have enough facts here to know how much gap there was between the trading and the deposit at a bank method, but we do have enough information to know that with increased ability to handle risk, there is an increased profit margin. Risk is a key ingredient in profits. And people who are not willing or able to take the risk, should not expect the higher profits. And both time and investment vehicle affects risk.

If you consider twelve years to be a long time, then they had to make 6% interest per year. If you consider four years a long time to be away, then they had to make 18% interest per year to double their money in four years. And there were trading plans that had the potential of doubling the money in two and a half years. Now I don't want to take the time to amplify on this principle, but I think Thomas Sowell does as good a job as anybody in fleshing it out.

God entrusts possessions to His servants based on their ability to manage them (v. 15)

The fifth principle is that God entrusts possessions to His servants based upon their ability to manage them. Verse 15 says, And to one he gave five talents, to another two, and to another one, to each according to his own ability. The master risked only the amount of money that each person was capable of handling. These were his brokers and he was diversifying the minimize his own risk. But the key phrase is that he gave to each according to his own ability. Now if this is true, then the servants should follow suit. We should only handle what we have the ability to manage. And thus points VI and VII logically follow.

If you are to imitate Him, this means that the amount of capital you place at risk should correspond to your level of knowledge (v. 15)

Point VI: If you are to imitate God, this means that the amount of capital you place at risk should correspond to your level of knowledge. The third person was not criticized for lack of knowledge in trading and speculation. He may not have had knowledge of trading and speculation, and he was not held accountable for that. If you look at verse 26 you will see that it was laziness or lack of initiative to do anything. But his lord answered and said to him, 'You wicked and lazy servant…' They all had abilities, and in verse 27 the lord indicates that the third man had the ability to put the money into the bank and monitor it. His problem was lack of initiative. Many of us (myself included) will probably never have the ability to start and run certain kinds of businesses, or to engage in commodity speculation. And if that is the case, then we shouldn't put much money into projects like. But we do have the ability to at least save and to keep pace with inflation. Where we get ourselves into trouble is to place all our money on a sure bet that some supposed expert tells us about and lose it all. Why? Because we don't have the knowledge that the expert does. He maybe made a killing in real estate market and wrote a book on how you can do the same because he's out of real estate and into writing. You get in when the market is down. If we don't have the knowledge or ability, we shouldn't invest there. If we have some knowledge and ability, we might be able to invest some. But the amount of capital you place at risk should correspond to your level of knowledge.

The level of risk you take should correspond to your level of knowledge and ability (vv 15-17 with v 27)

The seventh principle is related. It's not just the amount of money, but also the level of risk which you can safely take should correspond to your level of knowledge. And I think what I have said with regard to the third man applies. Christ did not criticize the third man for failing to be involved in high return investments. He criticized him for failing to do anything. He needed the lower risk investment of the bank (v. 27).

Financial skills are learned, and God is willing to "risk" possessions on those who are willing to learn (v. 14-15,21,23)

The eighth point is that financial skills are learned, and God has enough trust in His people to risk His possessions on those who are willing to learn. In a sense, each of us have been trusted by Jesus to be His brokers. Every one of you has been given something by the Lord. That's grace, pure grace. What you do with those possessions determines how much more the Lord is willing to entrust you with.

Verse 21 says, Well done, good and faithful servant; you were faithful over a few things, I will make you ruler over many things. Enter into the joy of your lord. But look at God's treatment of the person who does nothing with the Lord's deposit. Verses 28-29. Therefore take the talent from him, and give it to him who has ten talents. For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away. Each of the first two men learned from managing the Lord's resources, and God gave them more. We all have something, but as we stretch ourselves and learn, God is willing to entrust more to us.

Increased prosperity is impossible without taking risks (vv. 21,23,29, etc.)

The ninth principle is that increased prosperity is impossible without taking risks. I dealt with that in the previous message, so I'll skip to the last two points.

Present orientation distorts our perspective on risk management

It makes us critical (and envious) of those who are successful at risk management (v. 24-26)

By definition, the third servant is present oriented. His lack of perspective on the future of verse 29 makes him too driven by the reality of risks in the present. But what I want to point out in this section is that this present orientedness makes him both envious of the master and critical of the master's methods of earning money.

And I have listed in the outline three ways that this passage speaks of making money

There are three ways to earn money:

By working and saving up goods (v. 14)

The first is by working and saving up goods. To have goods to invest, this man had to have saved up first.

By having others work for you (vv. 14-15,19)

The second way is by having others work for you. Initially these servants were apparently not investors, but had worked in other areas of responsibility. Now he employs them to manage his resources. There comes a time when you need to multiply your efforts since there is only so much that you yourself can do. Of course, there are limits on how many people you can manage efficiently. But this is one way of multiplying your efforts. If nothing else, you can hire the expertise of other people in the things you purchase. The banker in verse 27 is a servant in a sense whose expertise is helping you out. But even your washing machine, dishwasher, vacuum cleaner, telephone and cars are doing the work that servants would have had to do in Christ's day. Doesn't that make you feel good? You are all wealthy enough to own a few servants to save you time to take other dominion.

By making your money work for you (literal Greek of v. 16, 27).

The third way to make money is to make your money work for you. Though the word "traded" in verse 25 does have the meaning of traded in Classical Greek, and I believe that is a good translation, it literally means worked. The NIV translates it as The man who had received the five talents went at once and put his money to work and gained five more. Trading was one way of putting money to work. And I would encourage you to study the various ways in which money can work for you. And putting it in the bank (as per verse 27) is only one way to do so.

The last two ways are "reaping where you have not sown, and gathering where you have not scattered seed." These are also the most risky of the ways, and thus should produce the most income.

The last two ways that I mentioned of making money are included under the phrase, reaping where you have not sown, and gathering where you have not scattered seed.

Servant's perspective: The master is "hard" (exploitive) when he makes money from anything other than his own labor (v. 24). This is the accusation of Marxism.

The servant accuses him of doing this, and interprets this as making the master hard. D.A. Carson points out that the accusation in verse 24 is that the master was exploiting the labors of others. In effect he accuses the master of being a capitalist. The servant apparently believes the Marxist lie that the only legitimate form of wealth creation is the first one. And this in a nutshell is the Marxist labor theory of value and Marx's exploitation theory of profits. Marxism is an economics of envy.

Master's perspective: Profit from the labor of others and from money earning money is not exploitive. However, failure to do so when one is able is laziness. This is the assertion of capitalism.

Well, the master in verse 26 rejects the idea that he is a hard man, but he does admit that he is a capitalist. Verse 26: But his lord answered and said to him, "You wicked and lazy servant, you knew that I reap where I have not sown, and gather where I have not scattered seed. In other words, he reaped from fields that he hadn't even stepped into. He had hired other people to sow those fields. He admitted that he made a profit from the labors of others and in verse 27 he admits that he made money from his money. The capitalist sees this as a moral imperative, not as a moral lapse. This master feels no need to deny the charge.

In fact, the master treats the servant as hypocritical since he has benefited from his richness. And in verse 26 he makes no bones about the fact that the Marxism of the coin burying servant is wickedness and laziness personified. You wicked and lazy servant. You have in this exchange two world views in conflict: the economics of envy and the economics of production.

What the servant is blinded to, are the increased responsibilities and risks involved in capitalism. Rather than being critical of the rich man, the servant should be grateful that this rich man's efficiency and wise management of risk has provided him a job. With increased risk comes increased salary. The servant wants a high salary without the risk. And the rich man says that is wicked. Those are offensive words to many, but they are the inspired word of God. Marxism is wickedness and it is blindness to what is needed to properly manage risk.

Present orientedness makes us blind to eternal risks (v. 30) and fearful of present ones. It also keeps us from minimizing either risk.

To be present oriented is to be blinded to the true nature of risks and uncertainties and to want everyone else to become present oriented with us. It's resentement. If God prospers you, for the most part keep it quiet. Otherwise you will be misunderstood and abused for your good stewardship. Present oriented people will never see themselves as blameworthy. The problem will always be out there. And successful people will be the first target.

Let us view risk from an eternal perspective (v. 28-30)

This servant feared potential losses but totally ignored the guaranteed loss he would face in eternity. But it's not just Marxists. Capitalists can fail on point XI as well. Whether people acknowledge that they are stewards or not, verse 19 guarantees that God will settle accounts. And it should be our goal to long to have Christ's Well done, good and faithful servant. The other alternative is loss, and if we are not believers, it will be eternal loss. Verses 28-30. Therefore take the talent from him, and give it to him who has ten talents. For to everyone who has, more will be given, and he will have abundance; but from him who does not have, even what he has will be taken away. And cast the unprofitable servant into the outer darkness. There will be weeping and gnashing of teeth. That is the ultimate risk that unbelievers are unwilling to deal with apart from God's sovereign grace changing their hearts. But for those who have been born again, there should be no excuse for failing to view all of life, risks included, from an eternal perspective. May each of us do so. Amen.


  1. Thayer's lexicon says that this expression is used many times by Demosthenes to refer to trading. But you can also translate it literally like the NIV does and say that these men put their money to work for them.

  2. Jean Andreau's book Banking and Business in the Roman World was recently translated into English, and it gives us an excellent picture of inflation, interest rates, price controls, etc. in the ancient world. Other articles I have show that in 340 AD Rome outlawed all interest. In 1800 BC Hammurabi's law code set a maximum of 331/3%. Under Julius Caesar it was 12% and under Justinian it ranged between 4% and 8%.

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