Not a Believer?

Not a Believer?

Can you take the Risk?

James E. Campbell, August 01, 2015

In the 1980’s I was working for a private company. I had advanced in the company so I had a pretty good salary, some stock in the company, and excellent benefits. I also had a wife, a young daughter and a very young son. It was a time to think about the future. How could I continue to provide for my family, pay for our kids’ education, and ensure that my wife and I had a comfortable retirement? I looked at various investments, talked to financial advisors, and my wife even studied financial planning. We wanted to secure a reasonable financial future and we figured we had about 20 years before our kids finished college and about 30 years until my retirement.

I remember that in talking to financial advisors, it was not uncommon for the advisor to suggest how our investments might fare if we invested with him. While I didn’t think about it this way at the time, in evaluating different financial advisors I was trying to decide whether to place a wager. Would I bet on one financial advisor or another and, in the process, what was the nature of my wager on the investment instruments each advisor would recommend? What did not occur to me at the time was that even if I didn’t use a financial advisor I was still placing a bet on the future.

Since those young and uncertain days I have spent a great deal of my career conducting risk and decision analysis studies for various clients. In preparing to write this article I reconsidered those early investment decisions and analyzed the situation in the way I wish I had been equipped to at the time. In doing the analysis, I based my expectations of the stock market for the period from the mid-1980s to now on the performance of the Dow Jones Industrial Average index from 1915 to the mid-1980s. A quick simulation produced the following results that would have been helpful in making a decision to use a financial advisor in the 1980s:

  • In the 30 years from 1985 to 2015 (again based on market performance up to 1985), the simulation indicated that I might have expected an annual gain of just under 6% per year.
  • There would have been almost a 10% chance of losing money over the 30 years.
  • The probability of averaging more than 10% per year from 1985 to early 2015 was about 15%.

As it turns out, if I had chosen an investment advisor who had performed as well as the Dow Jones Industrial Average has actually performed since 1985, I might have expected annual gains of about 9%, well within the range of my simulated results. The point is that when we make a decision that involves future uncertainties, we need some way to analyze the possible outcomes so that we can make an informed decision.

Let’s look at some simpler examples that concern making a decision in the face of future uncertainties. Suppose some wealthy and generous person offered you the following wager. You can flip a penny (we’ll assume that it is a real penny having both a head and tail side) and every time you flip a head, you win $1.  Every time you flip a tail, you win nothing. Most of us would be happy to take that wager. You take no risk; you can only win. There is no downside. Since you expect to flip heads about half the time, you would expect to earn about $0.50 per flip; $1 for heads and $0 for tails. So in this case, the decision is easy. By all means, flip the coin as many times as you can and as long as the wealthy sponsor would pay.

To make the wager a bit more interesting, imagine that you get just one chance to flip the penny. If you flip heads, you win $2000 and if you flip tails you lose $1000. So, if you take the wager, you have a 50/50 chance of winning $2000 but an equal chance of losing $1000. For the more mathematically inclined, your expected gain for the flip is $500. So this wager looks pretty good but you do have the risk of losing $1000.

The catch is you only get one chance. With one flip you will either win $2000 or lose $1000. While there is the possibility of significant gain ($2000), there is a 50% chance of losing $1000. While most people would take this wager, the decision might depend on how much of a gambler you are.

One last example should suffice. Suppose instead of the above wagers, your potential sponsor offers the following wager. If you flip a head you win sufficient wealth that you will never need to work again. Your ability to live in comfort for the remainder of your life is guaranteed. On the other hand, if you flip a tail, you forfeit your entire net worth. You lose your money, investments, house (if you own one), car (if you own one), and all your other possessions (we will assume you get to keep the clothes on your back). Would you take this bet? The answer would probably depend on your age, your gambling tendencies, and how much you have to lose. A younger person who has accumulated little and has the ability to start over might be more inclined to take the wager than an older person who has prepared for and is entering retirement. Certainly this last example would be a very serious wager and would require serious thought and study before making a decision.

The above examples assumed that you have the choice to wager or not. This brings us to a wager that you do not get to choose – you are making the wager right now whether you know it or not and whether you want to or not. The wager was proposed by Blaise Pascal, a French mathematician, scientist, and religious philosopher. Pascal was born in 1623 and only lived to age 39.1 Nevertheless, he made substantial contributions in mathematics and physics as well as theology. In the late 1650s Pascal began a work of Christian apologetics that remained unfinished when he died in 1662. This work has since been published under the title Pascal’s Pensées (Thoughts).2 Here we will focus on the wager he proposed, known as Pascal’s Wager. Below is a summary of the wager we are all currently involved in, adapted from the Philosophy of Religion3 web site.

  • It is possible that the Christian God exists but it is possible He does not exist.
  • If you believe in the Christian God and He exists, you receive an infinitely great reward.  If He does not exist you lose little or nothing.
  • If you do not believe in the Christian God and He exists, you receive an infinitely great punishment. If He does not exist you gain little or nothing.
  • Your choices are:
    • Receive either an infinitely great reward or lose little or nothing, or
    • Receive either an infinitely great punishment or gain little or nothing.


  • It is better to believe in the Christian God than it is not to believe in the Christian God.
  • If one course of action is better than another, it is rational to follow that course of action and irrational to follow the other.


  • It is rational to believe in the Christian God and irrational not to believe in the Christian God.

The potential loss outlined in Pascal’s Wager is very great as is the potential reward. This is a very high stakes bet and we are all involved in it right now whether we realize it or not and whether we want to be or not. So should we take the wager seriously? Let’s see what Pascal had to say about the importance of the wager.

Nothing is so important to man as his own state, nothing is so formidable to him as eternity; and thus it is not natural that there should be men indifferent to the loss of their existence, and to the perils of everlasting suffering. They are quite different with regard to all other things. … this same man who spends so many days and nights in rage and despair for the loss of office, or for some imaginary insult to his honour, is the very one who knows without anxiety and without emotion that he will lose all by death. It is a monstrous thing to see in the same heart and at the same time this sensibility to trifles and this strange insensibility to the greatest objects. It is an incomprehensible enchantment, and a supernatural slumber, which indicates as its cause an all-powerful force.”4

Nevertheless, many people cannot be bothered to study and learn the truth for themselves. Pascal argues that the non-believing person who does not seriously consider and study the Christian religion is like a man who does not know

…who put me into the world, nor what the world is, nor what I myself am… All I know is that I must soon die, but what I know least is this very death which I cannot escape…I fall forever either into annihilation or into the hands of an angry God, without knowing to which of these two states I shall be forever assigned.”5

He has no clue about his fate upon death; so how does he decide to go forward?

I conclude that I ought to spend all the days of my life without caring to inquire into what must happen to me…I will go without foresight and without fear to try the great event, and let myself be led carelessly to death, uncertain of the eternity of my future state.”6

Can we just go forward and not wager at all?

“…but you must wager. It is not optional…. Which will you choose then? … Let us weigh the gain and the loss in wagering that God is. Let us estimate these two chances. If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation that He is.”7

At this point there are several objections that might be raised. You might not accept the premise of eternal life after death but are you sure? Unless you are 100% certain that physical death is final, then your uncertainty is part of the risk you take. Maybe you think that there’s more to being a Christian than just believing that God exists and you are right. But this article is about first things and the path to Christian faith and to eternal life in God’s presence is to first believe that He exists. Full belief and acceptance of God’s existence can start an amazing transformation in your life.