21:5 Financial Network

Biblically Responsible Investing and Financial Coaching

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Biblically-Responsible Investing


Account Requirements


How to Implement the Strategies


Biblically-Responsible Investing

Q) How do you provide biblically-responsible investing at lower costs to investors when others cannot or will not?

Our goals, fee structure, and business structure allow this to happen for our subscribers.

1) Our goal is to honor the Lord by teaching and encouraging our subscribers to be faithful managers, and we desire to see our subscribers  experience the abundant, joyful life that God designs for them more than we desire to make huge profits for ourselves.

2) Our fee structure is known as fee-only service. We have chosen to create a structure that is free of advisory commissions or conflicts of interest between what is best for our subscribers and best for our wallet.

3) Our business structure saves us many costs associated with the financial services industry that we are able to pass on to our subscribers.  As an investment newsletter, we do not provide personal investment advice.  This brings down our costs due to the regulatory framework of the advice industry.  In addition, we do not offer investment products such as mutual funds or ETFs, which can be very expensive to run.  Rather, our subscribers are responsible for making their own investment decisions and trading their own accounts.  

4) As an experienced professional firm, we have the tools, resources, time, and software available to create quality, diversified portfolios. We can screen corporations based on their practices, and stay abreast of financial markets with resources that the individual investor generally does not have.


Q) Is it true that biblically-responsible and socially-responsible investments provide lower returns than what could be gained in the unlimited investment market?

No. This misconception is probably based on the popular phrase, “sin sells.” Studies have shown that over a long period of time, screened portfolios tend to perform no differently than unscreened portfolios. Some companies, sectors, and strategies simply outperform others at any given time based on the stock selection, sector positioning, or investment methodology of the strategy.

The only factor among the current options for biblically-responsible investing that we could accurately say causes a drag on performance would be the higher expenses of responsible investments based on the need for screening and more diligent fund management. This, as previously stated, is a negative feature that 21:5 Financial Network has removed from the equation.

At the heart of this matter is truly the question of whether sin produces greater investment returns than righteousness. If companies do, in fact, create greater returns because of their support of sin, then we as investors have to ask ourselves the fundamental question, “Are higher returns worth the support of sin?” Given that our primary goal is to honor the Lord and trust Him for the results of our faithfulness, we choose to invest toward righteousness and live by faith that He can provide greater than we could ever ask or imagine.


Q) Is the amount of money invested in sinful practices so relatively small that it doesn’t make much of a difference how I invest anyway?

Small is relative when it comes to invested value, so allow us to quantify it if we may. Approximately 8% of U.S. Equities fail to pass our screens for support of sinful practices and agendas according to our screening software provider “eVALUEator” (See evalueator.com for more information). Some of those companies actively engage in selling sin as a means of income while others sell wholesome products or services and donate a portion of their revenues to sinful causes.

Let us suppose than only 2% of all the investors’ money in U.S. equities directly supports the sale of sin or sinful cultural agendas. Approximately $30 billion was invested in Biblically-responsible mutual funds as of 2015. Though 2% seems like a small percentage, 2% of $30 billion is $600,000,000. That is $600 million of investors’ assets that are being taken away from the promotion of sin in our country and being invested in companies that engage in positive business practices. Imagine what the pornography industry, gambling industry, or abortion facilities could do with $600 million to further their cause. When we quantify the amount of investors’ assets that can fuel positive or negative change in our culture, the opportunity for either side is staggering.


Q) Once we start to screen companies for sinful behavior or investing profits in sinful practices, it seems to be difficult to know where to draw the line. If we cannot screen out everything, should we bother to screen out anything?

Everything we can do helps. If I cannot insulate my house to protect from all heat loss, should I bother to insulate it at all? If everything I eat cannot be completely healthy for my body, should I bother to monitor the nutritional value of anything? Of course we want to insulate our homes and feed our bodies to the best we are able. Investing in that which is as righteous as possible can make a big impact in our world for the better even if we cannot screen out everything. It is also possible that we can do more later on if we take smaller steps now.


Q) Focusing on external behavior is only a short-term solution to symptoms of the real problem, which lies in the hearts of men and women. Shouldn’t we focus on winning the hearts and minds of corporate executives to Christ with the gospel instead of trying to simply defund sinful corporate practices?

We hope to accomplish both at the same time. Ultimately, we want to see people come to Christ and be internally and eternally changed. In the meantime, the unborn are dying, families are being broken, and lives are being devastated by the effects of sinful corporate practices. Even in people who desire to honor God, removing as many temptations as possible can help people to stay strong in godly living. If an abortion was less readily available, an expectant mother might have more time to realize the blessing of the precious life in her womb. If pornography was less readily available, then people who desire purity will have less temptation urging them to fail. If gambling was less readily available, people would have less opportunity to become addicted to it. If a pipe in our house is leaking, then certainly the problem won’t be solved until the source of the leak is repaired. Until then, though, the homeowner still shuts off the damaging water supply, and works to mend the water damage already done by the leak.


Account Requirements

Q) What is the minimum size account required to use your portfolios?

The minimum investment in a 21:5 Financial Portfolio is ultimately a matter of choice to the subscriber. There is no minimum investment required. However, the subscriber will probably want to consider how important biblical responsibility is to him or her and the relative trading costs for a small account. 

The average trade commission for one of the big three custodians is approximately $4.95 per trade (Fidelity $4.95, Schwab $4.95, and TD Ameritrade $6.95 as of the time of this writing), once on the purchase and again on the sale. Thankfully, there are ways to reduce and/or eliminate these trading costs depending on the custodian and the ETFs selected. Each of the big three custodians offers certain ETFs commission-free, and as a help to our subscribers, our newsletter identifies which ETFs are free at each custodian when they appear in a portfolio. For example, if our portfolio recommendations include an ETF that trades for free at Fidelity, we will note that this ETF is free to trade there and provide any alternative ETFs that would be equivalent and free to trade through one of the other custodians.

Frequently, our Stability-Focused Portfolio will only consist of three or four ETFs, and most or all of them will be commission-free from one or more of the previously mentioned custodians. With that in mind, trading costs for the Stability-Focused Portfolio are minimal. Our annual membership fee is currently $149 annually, so the percentage of assets necessary to pay the membership fee is dependent upon the amount of the investment. An investment portfolio, though, is only one of the many benefits of membership. 

Our Growth and Income Portfolios contain both ETFs and individual stocks. Particularly for a small account, a subscriber may want to consider using Motif Investing. Motifinvesting.com allows investors to create a basket of up to 30 stocks and ETFs (a "motif") and trade the entire basket at once for only $9.95 as of the time of this writing. Any future changes to the motif also only cost $9.95 per motif. Another advantage of Motif Investing is that investors are able to buy partial shares, which is not possible through a standard trade at the other custodians. Some, but relatively few, individual stocks can trade at several hundred dollars per share. Members of 21:5 Financial Network are able to use our newsletter to create a private motif to trade.  See www.motifinvesting.com for more details.

Please note that while Motif Investing allows users to share motifs with others, any subscribers who share a motif created from a 21:5 Financial Portfolio is violating copyright and intellectual property rights and will be subject to the applicable consequences.  But why would someone try to honor the Lord through BRI and then steal intellectual property from their investment newsletter? That would be silly.


Q) Can I use the 21:5 Financial portfolios in my 401(k) or other workplace plan?

If the plan offers a self-directed brokerage account (SDBA), then any of our strategies can be used. An SDBA allows plan participants to trade most listed stocks, mutual funds and exchange traded funds as opposed to being limited to a predefined investment lineup.

Alternatively, some plans allow in-service rollovers to IRA Accounts, and anyone can roll over a 401(k) into an IRA when leaving a job.  Within an IRA Rollover account, there is no predefined investment lineup that must be adhered to, so any of our strategies can be used.



How to Implement the Strategies

We recommend an easy three-step process for implementing the strategies:


Step 1: Open an Account

Q) Where should I open my account?

For regulatory reasons, we do not endorse the use of any particular custodian.  There are many things to consider when deciding which brokerage firm to use. Here are a few questions to consider asking:  

  • What is the cost of stock and ETF trades?
  • Are there account maintenance fees? 
  • What is the minimum initial deposit to open an account? 
  • What are the customer service hours and methods of contact? 
  • Is the trading system straightforward to use?
  • What cash management features are available?

Many of the custodians offer commission-free ETFs, subject to terms and conditions. The newsletter is written to alert subscribers as to which ETF is best to use at each of the big three custodians: Fidelity, Schwab, and TD Ameritrade given their commission-free lists. While having commission-free ETFs saves money in the long-run, the cost of stock trades should be considered as well.

Once the account is open and funded, our subscribers are ready to move on to step 2.


Step 2: Choose a Portfolio

We encourage our subscribers to take some time to read about each of the 21:5 Financial Portfolios and Goals-Focused Investing and to choose the portfolio(s) that align with their particular goals. This may result in choosing just one portfolio or all three. For example, a subscriber may choose to implement the Growth Portfolio for a retirement account and the Stability-Focused Portfolio for a short-term goal.


Q) Will you help me choose which portfolio to use?  

No. As an investment newsletter, 21:5 Financial Network is legally bound to only answer questions of a general nature and is unable to provide specific buy/sell recommendations or specific advice on an individual basis.   


Q) How should I combine recommendations in the newsletter with my other holdings?

Subscribers use our publication in different ways.  Some want an actual portfolio to follow, others want to build their own portfolios by picking and choosing from our list, and then there are those who simply want one or two stocks to buy at a time.  We do our best to provide a quality experience to all. 

For regulatory reasons, we cannot provide specific investment advice, and we encourage our subscribers to do their own homework and to broadly diversify their portfolios.


Q) Should I use the taxable bond or municipal bond option for the Stability-Focused and Income portfolios?

The first item our subscribers should consider is where the assets are being held. There is almost never a reason to hold municipal bonds within a tax-sheltered account like an IRA. If, however, the account is subject to taxes (i.e., a non-qualified account) and the subscriber is in a high tax bracket, municipal money market and bond funds are likely to provide more after-tax income than taxable funds that have similar characteristics. This is because municipal bonds are exempt from federal taxes and most state and local taxes.

A quick calculation called tax-equivalent yield can help put this into perspective. Tax-equivalent yield is the pretax yield that a taxable bond needs to possess for its yield to equal that of a tax-free municipal bond. The better choice is the one that returns the greater yield after taxes, all other things being equal.

Tax equivalent yield = Tax free municipal bond yield / (1-tax rate)

Suppose a tax free municipal bond is yielding 3%, a taxable bond is yielding 4% and your tax rate is 35%.

Tax equivalent yield = 0.03 / (1 - 0.35)

Tax equivalent yield = 4.62%

Given that taxable bonds in this example are only yielding 4%, purchasing tax-free municipal bonds would be the better choice.


Step 3: Follow the Portfolios

On the 15th of each month (or the next business day if it falls on a weekend or holiday), we post the latest edition of our newsletter, which provides our subscribers with insight into our thoughts and methods as well as the percentage allocations that we recommend allocating to each security in the portfolios. Our subscribers simply read the newsletter each month and decide on which trades to place in their accounts.  Unlike many financial newsletters, we provide subscribers with buy and sell recommendations as well as portfolios that align with convictions.

Not sure how to trade? While trading lingo is the same across custodians, each custodian has a slightly different process for executing trades. Each custodian should have an online video or educational piece that walks through the steps. To learn trading lingo, please visit the Trading Handbook section of our website.