Wednesday, August 30, 2006

The Spirituality of Money

By Rabbi Meir

Let us define wealth as the highest form of organisation possible to the environment in such a way that everything alive and everything essential to life exists without scarcity.

In other words, the more abundance we create for a given human need, without generating the scarcity of another need, the better. This definition reveals a connection between spirituality and money.

This positive, spiritual view of money is validated when the money is used to perform good deeds and nobody is hurt as a consequence of the quest for great wealth.

However, no discussion of money is complete without discussing investing. Although the ancient rabbis may not have envisioned our modern, robust stock markets, they had their own sophisticated commodities futures markets in crops, and they invested in partnerships and land purchases.

The two best investing tips that can be gleaned from the ancient rabbis are to engage in value investing and to diversify.

In today’s markets, value investors buy undervalued stocks and hold them until other investors appreciate their worth and reward the stockprice. Over the long term, value investing has outperformed growth investing.

The ancient rabbis believed “When merchandise is held in low esteem, at rock bottom prices, go and buy it up, for in the end its price will rise.” The rabbis were adamant about diversification: “A man should divide his money into three parts – one third in land, one third in merchandise and one third at hand.”


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