By Sheryl Rowling
SAN DIEGO — Have you ever wondered about what the Talmud says about investing? The following Q&A may be instructive.
Q: Does the Talmud provide guidance on investing?
A: Actually, yes. According to the Talmud, “Let every man divide his money into three parts, and invest a third in land, a third in business, and a third let him keep in reserve.” A modern translation might be, “Let every investor create a diversified portfolio allocating one third to real estate, one third to stocks, and one third to cash and bonds.”
Q: Can I be a good Jew and still want to be rich?
A: Well, I’m no Rabbi, but it seems to me that the richer you are, the more charitable you can be! The Talmud and also Proverbs imply that by being charitable, you can grow wealthier. “You shall surely tithe…[in order to become rich].” Also, “… one who scatters… is given more.” In other words, it’s okay to want to be rich as long as you do good deeds (tzedakah).
Q: Is there any Judaic advice on how to obtain wealth?
A: The Talmud seems to encourage working, telling us to engage in business and deal honestly. “A person should love work and not hate it; for just as the Torah was given with a covenant, so too was work given with a covenant.” “Even God did not let His presence rest upon Israel until they had performed some work.” Of course, you should remember the Talmudic definition of wealth, “”Who is wealthy? One who is happy with his lot.”
Q: Are there rules on how to conduct business?
A: Oy! Did you open a can of worms! There are so many rules; I’ll only give you the “abridged” version. Basically, Judaism requires that people practice “lovingkindness, justice, and righteousness.” This means you must treat your employees fairly (“The wages of a worker shall not remain with you overnight until morning.”). You must engage in fair pricing (“If you sell something to your neighbor or buy something from your neighbor’s hand, you shall not wrong one another.”). In fact, the Talmud asserts that the first question a person is asked at the final judgment is, “Were you honest in your business dealings?”
Q: How do I know the difference between an honest profit and “dealing unrighteously?”
A: It seems that the Talmud’s general rule is that you shouldn’t charge more than one-sixth of the “average” price. Actually, according to Talmudic law, if the “overcharge” is more than one-sixth, the sale is not valid or enforceable. Also, if a seller is unaware of the true value of an item, the buyer must not take advantage of the seller’s ignorance and underpay. Finally, the Talmud prohibits excessive markups on necessities; profits from the sale of products such as wheat, oil, or wine should not exceed one-sixth. (Did you know that wine is a necessity?!)
Q: There seems to be a lot to know! Can you summarize the rules in one sentence?
A: Work hard, be honest and give to charity.
Note to Readers: This article is not intended to provide Rabbinic advice. For answers to specific questions, please consult with the Torah or your Congregational Rabbi.
Note to Rabbis, Cantors, Scholars: Oy vay! I did the best I could!
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Rowling is a certified public accountant, personal finance specialist, and principal of Rowling & Associates. She may be contacted at sheryl.rowling@sdjewishworld.com