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By: Kyle T. Zwiren, Reuben Rashty and Jacob Rashty, a special to the Jewish News

Any discussion of Jewish-based financial decisions begins with the Torah.

Traditional Judaism is a religion based on rules. There are 613 commandments in the Torah, which means there are a lot of ways Jewish people can make mistakes.

But of all the 613 commandments, we are unaware of any Jewish-based philanthropic and investment guidelines. To be sure, rabbis and scholars have opined on the topic, but, for example, there is no Jewish equivalent to the United States Conference of Catholic Bishops Investment Guidelines. There are also Baptist guidelines and leaders of Muslim sects have released their own Sharia-based rules, but there is nothing directly on point in Judaism.

Nevertheless, Jews who want to invest, make financial plans and give to charities based on Jewish values would not be without guidance. Perhaps your rabbi won’t provide any pithy stock picks, but Jewish values can provide the foundation upon which financial decisions are made.

Kyle T. Zwiren, Reuben Rashty and Jacob Rashty
Kyle T. Zwiren, Reuben Rashty and Jacob Rashty Nathan Vicar | Detroit Jewish News

Any discussion of Jewish-based financial decisions begins with the Torah. In this case, we would be guided by five particular mitzvot: tzedakah, tikkun olam, tzedek, g’milut chasadim and tikya. These five foundational mitzvot won’t tell us to buy Facebook versus Apple, or to donate to a particular charity, but they will provide the basis upon which informed investors can make their own decisions.

So, what are these mitzvot and what do they tell us about making financial decisions? The first is tzedakah, which is literally translated to “righteousness.” Judaism places an emphasis on the importance of charity. Tithing (maaser in Hebrew) is referenced throughout the Torah, and in most other major world religions for that matter. The Torah states the obligation to donate 10% of one’s crops to members of the community in need. Tzedakah also refers to the intention of giving. No act of charity is bad, but it is most meaningful when given willingly, proactively and anonymously. According to Maimonides, the highest level of charity is when the donor gives the recipient the wherewithal to become self-supporting.

Tikkun olam is the Jewish directive to “repair the world.” Similar to tzedakah, tikkun olam creates the duty to serve those in need. In more recent times, it has come to be seen as a responsibility to mitigate the worst effects of a warming planet. Tikkun olam may direct us to invest and/or give to socially or environmentally conscious organizations, or at least to avoid those that operate to the contrary.

Tzedek is the call to justice and fairness. It is similar to the American value that all are entitled to life, liberty and the pursuit of happiness. We are directed to combat injustice wherever we see it and to be conscientious of our own biases. This has obvious implications in today’s social climate and how we, as Jews, are supposed to respond. Tzedek establishes that we should understand the social impact of companies in which we invest, and to favor those with diversity in race, age and gender.

The fourth mitzvah is g’milut chasadim, translated as lovingkindness. This is the Jewish call for caring and compassion. It encourages us to give our time and resources and to do it with genuineness. In particular, we are to support the sick and elderly.

The fifth and final of these mitzvot is tikya, translated as “hope.” We are guided to remain optimistic for the future. As David Arnow said, “Judaism’s profound conviction is that many of the tragic elements of the everyday world are not immutable, that little by little, the world can and must be improved.” Not only should we live with hope and drive, but we should consider how to inspire others to do the same. Tikya, of course, is particularly relevant in light of COVID-19.

The five mitzvot discussed here provide a firm foundation upon which financial decisions can be made. Some Jewish customs are specifically rules-driven and others are subject to interpretation. It is curious that making Jewish-based financial decisions is not rules-driven and contains considerable flexibility. Why that is the case is not something we feel qualified to opine upon. At the end of the day, how one spends, saves and gives away money is an expression of that person, and Judaism provides ample guidance on doing so within our religious values.

Reuben Rashty is managing director and wealth management advisor in the Bloomfield Hills office of the Rashty Group at Morgan Stanley. Jacob Rashty is a financial advisor at Morgan Stanley. Kyle Zwiren is a former practicing attorney and supports the Rashty Group and its clients with financial planning and wealth management solutions. Contact them at reuben.rashty@morganstanley.com and kyle.zwiren@morganstanley.com.

1 COMMENT

  1. There is interesting investment guidance in the Talmud. “And Rebbe Yitzchak said: A person should always have his money at hand, as it is written (Deuteronomy 14:?) “And bind the money in your hand”. And Rebbe Yitzchak said, A person should always divide his money into three: one third in land, one third in commerce, and one third at hand.” Bava Metzia 42a.

    So R. Yitzchak’s ideal portfolio in modern terms is 33% REITs or property, 33% stocks+bonds, and 33% cash. Which is a very conservative (but fairly diverse) portfolio.

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