Banking on faith and wealth

Here’s interesting information with which to start the new year. A study conducted in the United States a while back landed on my desk over the Christmas break. It shows that religious affiliation plays a powerful role in how much wealth people accumulate.

Jews amass the most wealth, and conservative Protestants the least. More liberal Protestants and Catholics fall in between, and are about average with the rest of the US population in terms of overall wealth.

But — and here’s the really fascinating bit — people who attend religious services regularly were found to build more wealth than those who don’t.

The effect of religion is robust, even after taking into account inheritances, levels of education and other factors affecting wealth that may be associated with particular religious denominations, said Lisa Keister, author of the study and associate professor of sociology at Ohio State University.

“The results suggest people draw on the tools they learn from religion to develop strategies for saving, investing and spending, and those tools may be different in various faiths.”

Overall, the median net worth of Jewish people in the survey was $150890, more than three times the median for the entire sample — $48,200. The median net worth for conservative Protestants — Baptists, Jehovah’s Witnesses, Seventh-Day Adventists, Christian Scientists, among them — was $26200, about half the overall average.

Mainstream Protestants, including Episcopalians, Methodists, Presbyterians, Lutherans, and Unitarians, and Catholics were similar to each other, and about the average for the whole sample.

Professor Keister found that family life powerfully influences how people learn to save, and that what children are taught in Jewish homes is very different to conservative Protestant homes. It wasn’t just religious affiliation itself that had an impact on wealth accumulation; people who regularly attended religious services tended to be more wealthy.

Professor Keister said it is a social network issue; “a church or synagogue can be a good place to meet people with investment tips or money to loan for a new business.”

Religious beliefs children learn at home translate into factors that influence adult wealth ownership, she said. Religious teachings of different faiths may influence spending and saving strategies. Conservative Protestants often emphasise prayer and trust in God, which may reduce their desire to invest. Conservative Protestants also look forward to the rewards of the afterlife and don’t promote acquiring wealth as a good for this life.

Jews, on the other hand, don’t have a strong orientation to the afterlife, but encourage pursuits that will lead to wealth accumulation, such as high-income careers and investing.

Mainline Protestants and Catholics were at once distinct from each other and from the rest of the American population, but in recent years, both groups look like the rest of the US population in terms of wealth.

These religious backgrounds lead people of various faiths to take different financial trajectories in their lives, Professor Keister said. Religion is only one among many factors that influence wealth. This research is part of a larger series of studies Professor Keister is doing to explain why some people accumulate more wealth than others. She said that once she began studying wealth, the impact of religion stood out plainly.

“Religion keeps coming up in any model you run to explain wealth. It’s something you can’t ignore, but there’s been little effort to explain the connection between religion and wealth accumulation.”

Professor Keister hopes the results of the study can be used to help others build more wealth. “There are lessons to be learned here. For example, we can take what we see happening in Jewish families and translate that into ways to help others teach their children about building wealth.”

All of which suggests to me, thank goodness, that accumulating wealth through religion has got nothing to do with simply asking God to make one rich, but rather using the character one builds for oneself through religious belief and applying it to business or investments.

It is also, I suspect, all about making use of the skills and talents that God gave us and avoiding greed.