PARABLE OF TALENTS REVIEW 1

Investments in the Light of Parable of the Talents

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Bible is not just a book of religious teachings; it contains many theoretical and

practical guidelines which can be applied to the business world (Eyo, 2019). The “Parable of

the Talents” from Mathew 25, in particular, contains several lessons regarding economics

and investments. This story from Bible can be used to understand the concept of Biblically

Responsible Investing (Hastings, 2020).

The Parable of the Talents (ESV Bible, 2001, Matthew 25:14-30) is a story who about

a wealthy man who leaves his wealth in the custody of three of his servants. He assigns

different proportion of ‘talents’ to each servant. Talent is a currency that was used in biblical

times and represented a very large sum of money (Eyo, 2019). One of the servants is given

five talents, another one two, and the third one is assigned the custody of one talent. By the

time the master returns, two of the servants have succeeded in doubling up the amount of

wealth they were assigned by making investments, while the third servant who was assigned

the smallest share has not earned anything as he hides the money for safekeeping. The

master really appreciates the efforts of the two servants who doubled the wealth and regard

them as “good and faithful servant”, while the other one is reprimanded harshly and

referred as “wicked and slothful servant” (ESV Bible, 2001, Matthew 25:20-27). The master

also takes away the one talent from the lazy servant and gives it to the servant who already

has ten talents.

One of the key learnings from the parable is the concept of diversification, which is

related to modern day mutual funds to a certain extent. Mutual funds pool money from

various investors and invest in a diversified portfolio of assets. The parable teaches us that

the rich master did not give all of his wealth to one servant, he rather divided it to all of

them. Furthermore, it was a very strategic division as he divided wealth according to the
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capabilities of the servants (Eyo, 2019). The servant could not earn any profit was given the

least share of wealth that was 1 talent. This is not the only biblical reference which supports

diversification of investments. Another verse for example is, “Give a portion to seven, or

even to eight, for you know not what disaster may happen on earth.” (ESV Bible, 2001,

Ecclesiastes 11:2). Hence, we must invest our resources diversely as their there is a greater

possibility of loss if all of the investment is concentrated at one place (Aams, 2023).

The money-making instruments in biblical times were quite different from the

modern money-making instruments which include Commercial Bills, Call and Notice Money,

Certificates of Deposits, etc. In the Parable of the Talents, the talents represent the capital

that the servants had. Researchers have often argued regarding the monetary value of a

talent and there are various interpretations (Eyo, 2019). One such interpretation reports the

master’s eight talents as being equal to forty-million US dollars (Institute for Faith, Work &

Economics, 2018). Two of the servants invested the capital wisely and generated returns as a

result of their capital investment.

There is not a direct reference to fixed income instruments in the parable yet, we can

infer from the mention of ‘banker’ that the master was at the very least expecting some

fixed-rate income on the initial capital that he entrusted that he entrusted the third servant

with. “Well then, you should have put my money on deposit with the bankers, so that when I

returned I would have received it back with interest.” (ESV Bible, 2001, Matthew 25:27). As a

fixed-income investment instrument would have little or no risk involved, the master

expected the servant to do the bare minimum by depositing the wealth at some ‘bank’. This

bank that is mentioned here may not be a bank from the modern definition, yet the

principle is just the same.

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Equity investments, precisely speaking, aim to get the best return on the investment

or the equity. However, the parable is not solely about the return on equity or earning profit.

Hastings (2020) argues that effective capital investment not only leads to financial gains but

also enhances the investor's reputation among peers, who acknowledge their competence,

generosity, and intellect. So, the “sowing” of the capital by the master was not only for

profit, but a good reputation in the society too.

In conclusion, the biggest lesson from the Parable of the Talents is that risk tolerance

leads to increased returns on the investment. In contrary to the common belief, Bible does

indeed support making investments and taking risks. The key takeaway is that the two

servants who took risks with their investments won their master’s heart, while the third

servant who dig up the wealth and avoided any kind of risk, failed to do so.

References:

Aams, T. S. C. C. (2023). Should Christians invest? Christian Financial Advisor.

https://gracefinancialadvisors.com/blog/should-christians-invest [Accessed 05

September, 2023]

English Standard Version Bible. (2001). ESV Online. https://esv.literalword.com/

Eyo, U. E. (2019). The Parable of the Talents and Economic Management: Lessons for the

Nigerian Nation. GNOSI: An Interdisciplinary Journal of Human Theory and Praxis,

2(2), 55–63. https://doi.org/10.5281/zenodo.3712642

Hastings, D. (2020). The Parable of the Talents Revisited. Inspire Advisors.

https://www.inspireadvisorshastings.com/blog/the-parable-of-the-talents-revisited

[Accessed 05 September, 2023]

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Institute For Faith, Work & Economics. (2018). The Talents Parable: Timeless economic &

investment principles. Institute for Faith, Work & Economics.

https://tifwe.org/resource/the-parable-of-the-talents/ [Accessed 05 September,

2023]