Understanding ETFs and Investing with Purpose
Financial Stewardship in a Modern World
As someone who wants to honor God in every part of life — including how I handle money — I’ve come to realize that financial stewardship matters.
In Genesis 1:27–28, we’re told that we’re made in the image of God. And what was God doing in the beginning? Creating. He brought order, formed something from nothing, and then called us to be fruitful, multiply, and have dominion. That includes managing resources wisely.
Being intentional with everything God gave us, including money — planning, building, investing — isn’t greed. It’s good stewardship. And one way to begin is by learning about ETFs.
“Commit your work to the Lord, and your plans will be established.”
Proverbs 16:3
What are ETFs?
ETF stands for Exchange-Traded Fund. Imagine a basket holding hundreds of different companies — like Apple, Google, Microsoft. Instead of buying one company’s stock, you buy a share of the whole basket.
That’s what an ETF is: a fund that holds many investments and trades like a stock. They contain a diverse mix of assets, including stocks, bonds, or commodities. It’s great for beginners because it spreads your risk across many companies — making it more diversified and less risky than investing in a single stock.
Quick Comparison: ETFs, Stocks, and FOREX
Type | What it is | Risk / Complexity |
|---|---|---|
Forex | Currency trading → betting on whether a currency will rise or fall against another | High risk, fast-moving, not ideal for beginners |
ETF | A basket of many companies or a collection of assets | Lower - more diversified |
Stock | Shares of a single company (e.g., Apple) → gives you ownership | High - one company could rise or fall |
SPX vs. VOO – What’s the Difference?
Name | Type | What it is |
|---|---|---|
VOO = Vanguard S&P 500 | ETF that you can buy like a stock through a brokerage account. | A fund that aims to mirror the performance of SPX. |
SPX = S&P 500 | Index tracking 500 of the largest publicly traded U.S. companies. | It serves as a benchmark, to see the overall health of the market. |
👉 So, when you purchase VOO, you are buying shares in an ETF that holds the same stocks in the same proportions as those in the SPX.
Other examples: iShares MSCI ACWI ETF mirrors the MSCI ACWI (short for Morgan Stanley Capital International All Country World Index) Index, which tracks global stocks from developed and emerging markets ~2,800 companies worldwide.
What Should I Do Before Buying an ETF?
Here’s a short checklist:
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Pray and Plan – God cares about every area of life. Ask for wisdom before financial decisions. Understand and know your goals. Clear investment goals will guide your ETF selection.
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Understand What You’re Buying – Not all ETFs are equal. Read about the ETF. What does it include? Is it diversified? Look into factors like performance history. For example, the average annual return for the S&P 500 over the past 90 years has been approximately 10%, a benchmark against which you can compare ETF performance.
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Read the Prospectus: Always check the ETF's prospectus for essential information about its objectives, risks, and costs. Visit the Vanguard page to view the ETF prospectus for VOO or click here to see what an ETF prospectus by Vanguard looks like.
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Check the Fees – Some ETFs charge small annual management fees (called expense ratios). It’s expressed as a percentage of your investment. Anything at or below 0.20% is considered low – lower is better for long-term holdings.
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Use tax-advantaged accounts if possible (like Roth IRA in the U.S.)
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Evaluate Your Risk Tolerance – Different ETFs come with varying risk levels, so be clear on how much risk you are willing to take on.
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Diversify Your Investments – If considering multiple ETFs, choose those that complement each other to spread risk effectively.
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Start Small and Stay Consistent – It’s okay to start with what you can. The key is to be consistent, not flashy.
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Stay Informed: Keep up with market trends and updates related to your chosen ETFs and funds. Long-term mindset – Avoid hype and short-term trading
As a believer, I see investing not as chasing money — but as multiplying what God has given me. It’s a way of honoring the calling to be fruitful and to steward wisely. Whether you start with $50 or $5,000, what matters is the heart behind it and the wisdom in the steps.
Remember: we were made to create, to build, and to grow. Even our finances can reflect that divine calling.
