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Sunday, August 30, 2009

Bad Financial Advice: No Logical Solution?

Hat Tip: One reader who expects many more to email me with the same story. Thanks! I would *not* have caught this one myself.

I hope I don't alienate any readers by questioning the spiritual/financial advice given by the very popular Rabbi Lazar Brody, but the "Emunah option" is based on flawed logic, is guaranteed to make the problem worse, and is likely to cause default on debts which I don't believe is a proper approach from a Torah perspective even if default isn't assur.

With all due apologies, this advice is this week's installment of "Bad Financial Advice."

Rabbi Brody gives advice on the following situation:

We all have seemingly insurmountable problems. Many of them have no
logical solution
. Here's a typical example:
John earns $65,000 annually. His minimal living expenses total $70,000. He already owes $40,000, and he foresees his debt increasing by $5000 per year, even before considering the interest he'll have to pay. According to logic, John has no hope; if he views his own situation from "logical" eyes, then he's a candidate for despair, depression, and even worse. He may come to the point where he won't even be able to earn his $65,000 any more, and then his situation will become much worse.

The solution Rabbi Brody offers is:

  • Don't succumb to negative thoughts.
  • Believe that the Almighty runs the universe and can send a myriad of solutions at any moment.
  • Strengthen yourself in emunah and believe Hashem will help because for Hashem miracles are natural.
  • Use the emunah solution to turn defeat into victory as no-win situations are the history of our people.

Number 1: Financial problems are not "insurmountable," nor are they without a "logical solution." A family with more expenses than income has options, perhaps unpleasant options (many of them temporary), but options nonetheless. Telling a person that the $5,000 gap between income and expenses plus the previous debt is a "no-win" situation is, quite frankly, is disingenuous.

Number 2: By reinforcing the "logic" that the problem is "insurmountable" you reinforce the feeling of powerlessness that leads to despair and depression which you advise him to overcome through some sort of "emunah option." Chazal didn't compare debt to the bite of a snake for nought. Mounting debt is a terrible predicament, but it can be resolved!

Number 3: This understanding of Torah is completely foreign to me, yet those who promote this form of Torah are immensely popular and increasingly so if you judge by the tzedakah marketing based on promises of segulot and yeshuot. Emunah without hishtadlut? We learn that the Yam Suf was parted when Nachshon ben Aminadav jumped in demonstrating that emunah. Financial problem can be overcome, but certainly not by ignoring the laws of the universe that too were established by Hashem. The mathematics behind compounding interest is also the making of Hashem. Want to beat the compounding interest and take a step towards freedom? Make some drastic changes: find additional sources of income, start selling stuff, cut expenses, pay down debt, and use the "found money" you no longer using to pay so much interest to continue. The Rambam gives us eight different levels of tzedakah. The highest level is to help a person become financially independent. Every day that debt mounts is a loss of independence. The advice did not contain a single suggestion about turning around the situation, instead the Rabbi offers the advice to essentially wait for a miracle. Didn't chazal say something about not relying on miracles?

One of the things I hope to accomplish through my blog is to help promote a feeling of control over our lives and our finances. I believe it was Rav Moshe Feinstein who said that statement "it is hard to be a Jew" ruined an entire generation. I think that throwing up our hands and reinforcing that "it is expensive to be a Jew" is basically proclaiming "it is hard to be a Jew."

If "John" is a real person who wrote to Rabbi Brody, but there are a log of "Johns" in the frum community and I do hope someone else offers John some practical advice that will ultimately give him some real emunah. John, take control and gain menuchat hanefesh as you get the burden of debt off your shoulders and re-gain your freedom. Hatzlacha!

25 comments:

Anonymous said...

Great post. I see the Rabbi's advice as no different from telling someone who is sick don't go to the doctor, don't get treatment, don't take medicine, don't eat right, just have emunah.

Anonymous said...

I think that it is Nachshon ben Aminadav.

But I agree with the rest of your post :)

Anonymous said...

I don't know how to write to you other than to leave a comment. It is not on the subject, but a family issue. My elderly father is being cared for valiantly and tirelessly by my stepmother. Her son and his family in Israel have always been dependent on her for parnosah, which she unstintingly gave until she simply ran out of money. Her son has promised to pay a huge sum to his young couple for a dirah (flat) in Jerusalem, but he can't afford to fulfill his pledge and the couple have resorted to renting. This man has no means of supporting himself and his wife (their children are mostly grown) as he is learning in kollel - he is 50 years old - since his mother no longer has funds to support them. His wife doesn't work, has never worked. The solution? The son is coming (as my brother's guest) to our Eastern city to collect money for himself and his family to pay off the dirah pledge and to support himself in kollel. He is staying with my brother's family and will be getting vital information from my brother and his wife as to the wealthy families in town so as to plan his route to his economic advantage. I am deeply shamed by my brother's family hosting a meshulach who is a family connection, as begging by choice is totally contrary to my sense of rectitude, of integrity, of self reliance, and of human dignity. But my brother and sister in law cannot refuse him - they owe too much to our stepmother for her care of our dear father. We can never repay her for her faithfulness. So my brother has introduced this man into the community, a community that has many day schools with needs, many local poor families. It stands to reason that, having a place to stay and a complaisant mother, he will keep coming to our city with his need for the dirah for his children, and his ongoing need for support. Sephardi Lady, is there anything you can say to reconcile me to this situation? I mean our connection to a man who has chosen begging as his way of life, who is now a part of our family and going to be a chronic "guest", and to me, a shanda.

ProfK said...

I've got a pretty simple approach to life. When in need, consult an expert. If your toilet is leaking you don't ask an orthopedist. When the grass gets mold you don't ask an accountant. When the oven stops baking you don't ask a barber. And when finances are in a mess, you ask a rabbi??!!!

I'm all for emunah, but not at the expense of seichel. Nothing this Rabbi said is going to help John in the real world with his real problem. If anything, the advice is going to make things worse, because John won't be looking for the advice and solutions that could really help him.

What's next? Rabbis diagnosing illnesses and prescribing treatment and medications?!

A Kollel Wife said...

Anon.,

Your relative's behavior is nothing short of sickening. I think he has a major source of entitlement and needs a reality check.

My only suggestion would be to locate someone who he respects (his rosh kollel, perhaps?) and get him to have a talk with him to set things straight.

And, no, before some cynic comes along and says that the rosh kollel probably agrees, most kollel families are not like this. The wife almost always works.

-A Kollel Wife

L said...

SL - kudos on another fine post. Even if some people will disagree with you, and claim that there are sources backing R. Brody, you still provided important food for thought, and represented true Torah hashkafah.

Re commenter #3 above - ouch! I am not so sure that the plan will work anyway, at least not to the extent that the person is hoping for, as there are so many causes/individuals competing for the tzedokko dollar today, even if in your town (seems to be somewhere outside NYC) there is less than in the NYC area.

In general, I think we are headed for a real disaster, Hashem yiracheim, and a real crash, with the way things are going with people who are supposedly leaders and learned learners prescribing and taking irresponsible approaches and actions, at times, as above. If that happens, those prescribing as above may be massively discredited in a way that will very difficult to recover from.

Hopefully some people will wake up and jump off the sinking ships to join those of us who left a long time ago or never boarded.

Anonymous said...

Anonymous: I am so sorry you are in this situation. The sad thing is it sounds like the step brother is leading his children down the same path of dependance. There probably is not a lot you can do, but less your brother or others in the family feel compelled to contribute to the step brother, you should give them a heads up that it sounds like you and your siblings may need to be prepared to help support your father and step mother in their old age. IMHO, the best thing to do is while not being rude, don't affirmatively enable him and request that your brother not do more than he has already promised because your elderly father and his wife have to come ahead of the step-brother and his children who can go to work. By the way, there is nothing wrong with "resorting to renting" hundreds of millions do it all the time.

G*3 said...

> What's next? Rabbis diagnosing illnesses and prescribing treatment and medications?!
Are you being sarcastic? Because this is already common practice for some. The rabbi can’t actually write prescriptions, but there are people who go to a rebbe for a diagnosis and treatment plan before they ever go to a doctor.

> In general, I think we are headed for a real disaster, Hashem yiracheim, and a real crash, with the way things are going with people who are supposedly leaders and learned learners prescribing and taking irresponsible approaches and actions, at times, as above. If that happens, those prescribing as above may be massively discredited in a way that will very difficult to recover from.

Many of the rabbonim in Europe in the ‘30s told people not to leave. That didn’t work out so well, but it doesn’t seem to have hurt their credibility.

SephardiLady said...

Anonymous-I have one Ask Orthonomics post in the works and will try to put this in the lineup too.

I will have to think about this. It is a sad, sad situation years in the making. And to think that there are many, many more like him and (worse yet) that we enable people to continue to live like this while our own infrastructure can't be supported. Shame on all of us.

Stam a guy said...

"Many of the rabbonim in Europe in the ‘30s told people not to leave. That didn’t work out so well, but it doesn’t seem to have hurt their credibility."

It's called reactionism. As the modern secular world has come to deny the authority and value of rabbis, the frum world has reacted by raising rabbis to mile-high pedestals where they don't belong, assuming they have an answer for every question and solution for every problem.

I believe strongly that rabbanim certainly do have a job to play with people struggling financially, offering emotional support and guiding them to the experts and, if necessary, helping to solicit charitable funds as a temporary measure of urgency. But when the rabbis are seen as holding the keys to every problem under the sun - this is a terrible mistake that makes Judaism look terrible.

The situation in Eastern Europe in the 1930's (and even in the early years of the war) is a perfect example. Rav Chayim Ozer zt"l insisted that Lithuania would not fall to Germany, and therefore encouraged Jews to remain there. He even opposed the relocation of the Mir Yeshiva to the orient. If you believe that rabbis know everything and have the answer to everything, then Rav Chayim Ozer's mistake is a testament to his failure as a talmid chacham, ch"v. But if you believe that rabbanim are not automatically granted perfect knowledge of everything, than Rav Chayim Ozer's mistake does not undermine his stature as a gadol. It just means he made an honest, albeit tragic mistake, in evaluating the situation, which does not reflect on his gadlus at all.

Mike S. said...

Stam a guy:

To be fair to Rav Chaim Ozer, in the case of those, like the Mir, trying to flee to Japan, he was trying to weigh the comparative dangers between the Nazis and applying to Stalin's NKVD for the needed exit permits. While he got it wrong in hindsight, that is hardly a choice any of us would want to face.

Anonymous said...

I believe that you are reading something that is not there. There are no details here because the Rabbi is not dealing with the financial situation per se, rather is giving advice for avoiding despair. You can have the best financial advice possible but a depressed and downbeaten person won't have will power to follow through. Strengthening emunah simple gives one the strength to move and do something.

SephardiLady said...

The Rabbi calls the situation "insurmountable," with "not logical solution," and a "no win situation." How in the world is that supposed to help a person avoid despair and build emunah.

Tell John that he can control his situation and change it permanantely (with hard work, determination, and focus). Tell him that people have not only overcome their debt, but have built prosperity. Point him to mentors who have pulled themselves out of debt and can give insight into how to do so.

Do you tell your children that their goals can't be achieved? Or do you give them the tools to achieve?

I don't believe I am misreading this in the least.

Bob Miller said...

Rabbi Brody's advice criticized in this piece should be looked at in a different light. That is, the basic intention is to relieve the immediate problem (despair) to free up the person's thinking process to work out practical steps towards a solution. We ought to understand clearly that neither the relief nor the steps will be possible without gut-level emunah.

Dave said...

That makes no sense to me at all.

"Have faith" doesn't fix financial issues.

"Let's sit down and crunch the numbers", that is the start of fixing financial issues.

Anonymous said...

Bob: I'm sure the rabbi had the best of intentions and was trying to make this person feel better. The problem is, the rabbi only did half the job. There is no reason why he couldn't give him hope and also some practical advice. Isn't a rabbi's job to sometimes also give tough love? It's not a popularity contest. Just like a dr. who sometimes has to give some tough warnings along with encouragement and a plan of action so too does a rabbi. Just like a dr. who sometimes has to refer a patient to a specialist, so too should a rabbi.

Anonymous said...

You need both. One must do hishtadlus, but know that it all boils down to what Hashem will give us.
I am nor sure he is not including hishtadlus in that example. He seems to be going on the Emunah aspect.
BTW, do you have an e mail so I can send you a private post?

SephardiLady said...

It is a gmail account, orthonomics at gmail dot com. I have it listed in my header describing the blog.

Looking forward.

David said...

Thanks for your wonderful forum to discuss "economic and auxilary issues in the Orthodox community." This is a much needed site. In my mind, you are a hero for starting and maintaining such a site. Much Hatzlacha!

westbankmama said...

Kol haKavod for this post.

Anonymous said...

I wonder if there is an aspect of "Lo titen michshol" in the advice being given by this Rabbi?

Mark
twitter.com/MarkSoFla

SephardiLady said...

Most certainly Mark!
But just have faith!

lady in waiting said...

Dear Sephardi Lady,
But when someone has four kids and is making 120K with two incomes, after taxes they have about 100K, the money spent on frugal food shopping (15K), a car (5K counting cost of car and repairs spread out over a few years), a modest mortgage payment ($27K per year), utilities (2K), health care costs (2K), some clothing (3K), household repairs (3K), transportation (must commute by train to work), a few basics like dry cleaning a suit occasionally, etc. doesn't leave over enough to pay 40K in tuition. And that's without giving a penny to charity, paying shul dues, buying a gift, going to a movie...so where does the difference come from? Is your answer, don't have kids?

Dave said...

If you have made the decision to have four children on that income, then the obvious answer is that private school tuition is not affordable.

SephardiLady said...

Debt catches up with a person sooner or later. If you don't have the money for private schooling, going into more and more debt simply won't produce the money and will lead to disaster.

I know I am not directly answering your question. But, I have no doubt that if those with modest lifestyle and some money (but not enough for the tuition asked of them)left the "system" market forces would quickly take hold and an affordable alternative would develop. I just posted on a Los Angeles school that is developing with low tuition. I've written about homeschooling. There are "hybrid schools."

I will not say don't have a 4th child. But, if tuition isn't doable, there are choices that must be made. Going into further debt isn't a wise choice.