Religion is one of those topics that’s unexplored when it comes to personal finance. If you surf the web, you won’t find much discussion of it. If you read the Wall Street Journal or Investors Business Daily, you hardly see a mention of religion at all.
This is a shame. If you look at it, religion has played a defining role in much of human history. For example, religion was partly responsible for early European immigration to the United States, and historical differences between Christians and Muslims are an important subtext in our nation’s current efforts in the Middle East.
But, what a lot of people don’t understand is the impact of religion on patterns of individual wealth building.
In this case, religion matters and it matters a lot. According to a great analysisof US data by Lisa A Keister, Jews and Episcopalians are way ahead of the curve when it comes to building wealth. According to Keister, about 18% of Jewish and 12% of Episcopalian families have over a million dollars in networth, compared to only 2% of Baptists and 4% of Catholics.
What accounts for the difference? Synergy between belief and action.
In the case of Jewish people the religion emphasizes the lack of an afterlife and places a high value on scholarship. In the case of Episcopalians the thinking is the old fashioned protestant ethic encourages thrift and investment. In both religions, spiritual beliefs and forms of social organization result in higher levels of home ownership, possession of savings accounts and stock market investments.