Destructive to Wealth: Confused as to Your Money Starts and Ends

A "very wealthy" Chassidish man writes to Dr. Yael Respler of the Jewish Press seeking her advice on a dilemma which is apparently quite common, was previously unknown to me (Dr. Respler sees this issue in her own practice amongst Chassidic clientele). I have no idea what standard is being used to measure "very wealthy" (income? savings? property? a healthy combination of all of the above?), but this man and his wealthy friends find themselves paying for their siblings' weddings, from the wedding itself to the accompanying jewelry/shtreimels and setup of the home, as well as providing "bailouts" and what have you.

In the name of kibud av v'em, this man and his wife and others are at a loss as to what to do except to publicize the isue. They recognize the situation is "outrageous" but feel powerless.

Dr. Respler labels the behavior as "narcissistic" and isn't exactly sure what causes such behavior, the heter being that others find it acceptable.

I'd like to come from a different angle inspired by both Pirkei Avot ("What is yours is mine, and what is mine is mine" is [the characteristic of a] rasha) and an interesting discussion in The Millionaire Next Door: The Surprising Secrets of America's Wealthy and other financial books I have read. Interestingly enough, those who do better financially and build wealth do not co-mingle their own means with the means of others, namely family. They do not place their own parents (or in in this case, child's) wealth as an asset on their mental balance sheet. They know where their means start and end and don't allow the means of others to play into their own calculations regarding lifestyle and spending. Doing such is a destructive to wealth, to say nothing of the midda demonstrated. I think the situation of the letter writer is indicative this idea.

Dr. Respler suggests potentially bringing in a Rav who can explain what responsibilities belong with whom. I don't know what polite solution exists in circles where funds are co-mingled on mental balance sheets and bills can simply be sent to a child, parent, or grandparent, and uttering a word might be considered an affront. Nor can anyone say what position a Rav would take given that "some of the expenses that you mentioned are actually expected in a shidduch, and it is a big mitzvah for you to help your parents cover the cost of making a wedding for your siblings (hachnassas kallah). " My own option is that providing such funds only continues to enable the parents, who are caught between their own bad habits and the bad habits ingrained in the mores of the kehilla.

I do know that all individuals/couples/family units are well served by establishing boundaries, financial and otherwise, with family. Hopefully writing a letter to the Jewish Press will solve the issue for this chassidish couple, but chances are the only solution that can even begin to resolve such a situation (the immediate result could include some unpleasant fallout) will include a face-to-face sit down where firm boundaries and limits are established.

PSA: School Choice in the Sukkah Meeting (NJ)

Thank you to the reader who sent this PSA and may self-identify if he so chooses.

"School Choice in the Sukkah"

With the high cost of Yeshivah tuition coupled with sky-high property taxes, the Jewish Community faces great financial pressures. To discuss this problem and possible solutions, including vouchers and tuition tax credits, Congregation Ohav Emeth will be hosting "School Choice in the Sukkah" on Shabbat Sukkoth, September 25, 2010, from 3:30pm to 5:30pm in the Ohav Emeth Sukkah, 415 Raritan Avenue, Highland Park. (In case of rain the event will take place in the Shul)

Invited speakers (not yet confirmed at the time) include New Jersey Governor Chris Christie, U.S. Congressman Frank Pallone, Jr., and Highland Park Mayor Stephen Nolan. Confirmed speakers include Mayor Anna Little of Highlands, New Jersey, the Republican candidate for the U.S. Congress from our district,

Come be a part of this lively and important discussion.

Ben Ish Hai on Keeping Busy

Seems to fit well with current postings and regular subjects. Published without any commentary. Add your own in the comments section.



Ben Ish Hai on Keeping Busy



It is imperative for every woman to perform some work on a daily basis with her own two hands. This applies to all women, no matter what their financial status. Even if a woman has numerous servants to fulfill her every whim, and sufficient money to pay for as much sewing, knitting, and weaving as she could possibly desire, she must make sure to spend some time during each day working with her own hands. The reason for this is that sitting idle has negative effects on women, while keeping busy makes one wiser and well appreciated by one's acquaintances. Listen to the words of Shlomo Hamelech, and you will understand the concept clearly:



[Entire text of Aishet Chayil. . . Shh seeks wool, and flax, and works willing with her hands. She also rises while it is yet night. . . She considers a field, and buys it; with the fruit of her hands she plants a vineyard. She girds her loins with strength, and she makes her arms strong. She perceives that her merchandise is good; her candle does not go out by night. . . . ]



A certain wise man said: "It is good that a woman give tzedakah to the poor from her own earnings. It is also good that a husband provide her with her every need, and if this requires that she spend money, he should not protest. It is even better, however, if she spend her own earnings."



Dear, precious women, may the merciful Creator protect you! Accept my advice and acknowledge my intentions -- take up a trade, such as sewing or knitting. Work with your holy hands with whatever material are available to you. Sell your products through your husbands, and give the poor your earnings. If you will do as I say, the Creator of the world will support you, protect you, save you from all mishap, and fulfill your every desire.

Ben Ish Hai on Home Finances

Not written in the style of today, but nonetheless some solid financial advice in my opinion: 1) the Gemorrah tells a husband to honor his wife more than himself and some say that a man should stretch his budget for her benefit, but here the Ben Ish Hai tells them women to buy [clothing] in accordance with the husband's financial status. 2) Don't put undo pressure on a (presumably) hardworking husband. 3) Don't go running to Daddy to get what the husband can't provide and appreciate what you do have.

Ben Ish Hai on Home Finances

I will teach you another principle, dear and precious women, and may Hashem have mercy on you: A wife should purchase clothes in accordance with her husband's financial status, and must not pressure him for more money than he is capable of providing for her. If he is unable to provide her with sufficient money to meet all her needs, she should not cause him to feel embarrassment.

Instead, a wife must express her gratitude for everything her husband gives her, regardless of its price. She should regard a small piece of cloth as if it were the finest silk, coarse barley bread should taste to her as if it were the finest pastry.

A certain poor woman was urged by her friends to go to her parents' house and enjoy a good meal for a change. She answered with all sincerity, "I enjoy the onion I eat in my husband's home more than the meat in my father's home. Blessed is the L-rd for bringing me together with my beloved husband!"

[other text]

Take heed of these words, noble women: Love your husband in your heart and show affection to him through your deeds. Your soul is interwoven with his, and you share his destiny. Appreciate an onion in your husband's home more than the most exquisite fruit and succulent delicacies.

Ben Ish Hai re: Gambling Issues

Continuing with some interesting passages from the Ben Ish Hai's instruction guide to women (translated from Arabic to English). Full disclosure: my children enjoy basic card games, checkers, and backgammon.

In the past, on this blog, I have put out my own theory that certain types of fundraisers, in the name of tzedakah mind you, could possibly tempt people to "give" more than is prudent because they have a proclivity towards gambling. It is nice to see I'm not barking up my own tree on this issue. For whatever reason, the Ben Ish Hai only seems to address mothers keeping their daughters from such games, yet addresses what such games do to "him", although the conclusion is that none are to play such games. Issues of tzniut are only addressed secondly.

Ben Ish Hai on "Innocent Games"

A mother should prohibit her daughter from participating in card games, checkers, backgammon, and other such games. These games cause people to become compulsive players. This obsessive attraction for the game eventually takes its toll on the person 0 he becomes increasingly disinterested in other aspects of his life, such as his means of earning a living and his relationships with people. In order to support his habit, the compulsive player resorts to theft and fraud, as well as other illegitimate means of earning a living. Thus, a mother would do well to keep her daughter away from such games.

Furthermore, these games usually evoke an atmosphere of lewdness and frivolity. When men and women play these games together, the Evil Inclination dances between them and arouses their desires. Many men have lost their money in such games, and, unfortunately, many women their repute. In Bagdad, there have been reports of many wealthy people losing their entire fortunes as a result of their obsession to these games. For this reason, there is a decree prohibiting anyone, both men and women, from playing them.

[Passage continues with resisting the temptation to play even once]

Critical Thinking: Important for All

(I'm going to digress from my planned programming to address an issue of education, but I will not publish any names although the response I am focusing on is not anonymous).

Dag has pointed me to a reply to a question in last week's Yated in the Chinuch Roundtable pointing that attitudes towards women's education, aka "let them bake cake" are a factor in financial issues. Background: A mother of a "nice-size" family pulls here daughter from school of Friday regularly enough that the principal send home a letter stating that the absenses were excessive and would likely be penalized. She explained to the teacher that she needs her daughter's help to prepare for Shabbos and writes "I wonder[s] why we stress academics so much and do not spend more time teaching our girls how to run a Yiddishe home. Pardon me for using this expression, but I think that you will understand me when I say that when our daughters get married, there should not be "bapitsm by fire." The need to know how to prepare for Shabbos." The mother would like to see Bais Yaakov schools adopt a Sunday through Thursday schedule, as Chassidish schools maintain.

Certainly running a Yiddishe includes learning how to keep commitments and one major commitment that children should learn to keep is their commitment to attend and achieve in school. Or, as my parents used to say when I wanted to take on commitments that they did not believe were manageable, "school IS your job."

Panelists in the chinuch roundtable explained that having such a schedule is not desirable:
*it is impractical, even if desirable, given parental work schedules
*girls can learn to run a home without a great amount of regular preparation, "the skills are not rocket science"
*the girls might spend the day sleeping or window shopping "since Maria or Christina might be helping Mommy 'make Shabbos' at home"
*A Bais Yakov principal really thankfully explained the necessity of women's education, both a strong Limudei Chol and Limudei Kodesh, to ground these young women who do go on to successfully establish homes without great torment. Furthermore he hit the nail on the head writing: "by keeping your daughters home on Friday, you are undermining the school and its goals. You are not showing proper chinuch to your daughters in relation to the needs, importance and values of our mosdos haTorah. . . .. " A boy's school principal said it straight: "There are schools that do not have Friday classes, and if you want to send your daughter there, you are welcome. But that does not mean that we have to dumb down the curriculum for the rest of Klal Yisroel. . . . . but the chinuch of young ladies generally begins at home. If fathers and mothers train their children to help at home, the children will do so regardless of whether they have school that day or not."

Two principals of Yeshiva (boy's) schools (just an interesting observation, which may or may not be correlated with their stance towards educating girls) took a very different stance, and one I find disturbing. One rights "Bais Yaakov education is certainly remarkable, but yes, it has become overly academic-ironically, more academic than yeshiva education." He believes girls should be off on Fridays and off from school a significant amount of time before Pesach to help with cleaning.

The other response with what I think it extremely disturbing highlighted: "I agree with you. We stress the wrong things to our bnos Yisroel. But it is hard to fight the system. Ideally, girls should learn how to become housewives. In truth, it seems somewhat pointless for a girl to memorize a Ramban and to be clueless as to how to bake a chocolate cake. [Insert famous story about Rav Schach and cake--or cookies as I have heard it]. Girls should learn in school and must take their studies seriously. But ultimately, the girls who knows how to keep her children and husband happy is the one who will be a successful Yiddishe mammeh. Nevertheless, the only reason girls have school is because the gedolim, in the early part of the 20th century, determined that it is "eis laasos laHashem heifeiru sorasecha." And this is true now more than ever." Ultimately he concludes the kids should be in school least they bother their mothers to go places and that you can't ask daughters to help you on a consistent basis. So "for now, with the system we have, she should be in school."

It is hard to know where to start, so I will just state two issues:

1. You don't build up Torah by demeaning Torah. In every argument regarding women's education "memorizing a Ramban" or what have you is labelled a waste or "pointless." I worry about an education system that demeans learning, in this case women's learning, whether it be Torah learning or any other subject.

2. Critical thinking, developed through avenues including academic studies, is tremendously valuable for mothers and for their families, regardless of their professional ambitions. Even if one's "only" responsibility is to bake cake and run a household, she will need to be able to sort the wheat from the chaff and, clearly, there is a lot of chaff to sort through even within the the daled amot of the kehillah that needs sorted through to build a bayit ne'eman.

And, speaking of the importance of critical thinking for married women entrusted with responsibility to help build a marriage and a family, I will refer my readers over to the Kallah Magazine Blog where Ariella looks at a *lack of* critical thinking in which a band-aid solution is proposed and promoted when the actual issue is not even put on the table. Regardless of internet availability, the external stimuli have always and will always be present and available(nothing new under the sun), and yet there is no mention of the internal issues such as lack of discipline or the state of the union which must be addressed to successfully combat many of the issues facing far too many.

Rosh Hashanah, Income, and Hishtadlut

I saved this post for Erev Rosh Hashanah since I wanted something relevant to the holiday, as well as an opportunity to wish my readers a Shana Tovah. I'm not a fan of virtual apologies, but please do be forgiving for any lapses in judgement regarding any posts or comments that I probably should have erased from the get go. While I do have guest posts lined up on hotter topics, I plan to continue to quote more excerpts as the one below.

There is a gemorrah that on Rosh Hashana our income for the year is set by Hashem. Being no expert on the subject, I've always thought of this source akin to the gemorrah that Hashem calls out that so-and-so will marry so-and-so. Through the courting process, we have no idea if the person of our choosing is really our "soulmate," but once we marry, we should regard the shidduch as bashert and proceed as such.

I've seen many others take this Gemorrah to what I would consider illogical extremes. Instead of taking the view that their parnassah is bashert in terms of acceptance of their current situation and working with the situation "for richer or poorer" to borrow from a different religious faith, they choose to believe their efforts in budgeting are rather pointless as Hashem will figure a way to give/take the money. I could point to numerous examples of such thinking on chatboards, in published articles, or in blog comments, to say nothing of face to face conversations with people who have relinquished prudence in the name of "bitachon."

I was gifted a translation of the Ben Ish Hai's (translated from Arabic) writings for women and they are filled with advice that will always be fresh and relevant, even though they are as old as the world post-Gan Eden. I've bookmarked a number of experts on money, budgeting, work ethic, and tzedakah that my readers will hopefully find interesting . Please do remember the context and time frame that these were written in and refrain from taking the discussion only in that direction. In short, thrift and prudence are certainly a part of the mesorah even if it is tempting to dismiss such efforts as futile because Hashem is ultimately in charge. I welcome readers to bring forward their own sources on how we should be dealing with the money Hashem has (and will) gift us. I don't have the breadth of knowledge of some of my generous readers and commentators, but I think we'd be hard-pressed to find financial advice from our sages that essentially label our efforts in thrift as futile.

The Household Budget (Ben Ish Hai)

If a man senses an increase in his household expenses, it is natural that he ask his wife for a detailed account of her expenditures. He will ask her how much money she spends on clothes, food, drink, and other expenses. He may inquire why their food supply is diminishing faster than usual, why new utensils were needed, and other such questions. It is a women's obligation to answer all his queries without showing the slightest irritation, since after all, he is the legal owner of all their possessions. She should not feel angry at him, since it is perfectly natural for a man who works hard in order to provide money for his family to know how it is being spent. As a matter of fact, a man who does not look after his possessions is akin to a beast, not a man.

If he feels that his financial situation is steadily deterioration, it is well within his rights to cut back expenses. On the contrary, it is his obligation to do so, since one who spends more than he earns will eventually eat from other people's pockets.

Thus, a woman should not become angry at her husband for reducing the household budget, but on the contrary, she should assist him in his calculations. She should also not become offended at things he says during times of financial stress, since it is a well-known phenomenon that people say things they do not mean when they are feeling upset. When Hashem will bring him prosperity, his manner will once again become friendly and affectionate, and he will give generously to his household as before.

How Debt Can Destroy a Budding Relationship

Hat Tip: A reader who is free to self-identify. That you to all the great readers who continue to send relevant articles and links to me on an almost daily basis. My apologies for being unable to blog at such a speed.

See this article in the NYT that begins with a story of an engaged young lady whose fiancee broke off their engagement three days after he discovered exactly what her debt (in this case student loan debt) actually was. Neither he or she was aware of the bottom line and the grand total was simply something he could not handle.

Bringing in large amounts of debt is "tricky" as the article states and I've heard stories within the Orthodox community regarding handling student loan debt that make me believe this issue is just as relevant to us as to the rest of American society. Who is responsible for that debt within a relationship? Who is legally responsible (in the case of divorce)? How will the debt affect the marriage, and what happens when things like kids come along?

Perhaps the most tricky question is the following: at what point during the courtship, should debts be disclosed? The first indebted young lady in the article has concluded that she should have disclosed her debt between the 8th and 10th date. I'm not quite sure what that translates to in shidduch-land. But I'd like to hear from my readers. Of course, the best course of action for singles is to avoid/minimize debt.

Private Programs and Government Funding

A reader kindly wrote me today asking me to comment on the 4th school closing in Lakewood (turns out the second school to close has announced it is re-opening under new leadership in the same location. I have yet to figure out this works out in terms of numbers since it seems that none of the facts on the ground have changed, behind on payroll, same building/same mortgage).

If you have been reading some of the Jewish news sites (the blow-by-blow is at TLS), you might have run across a rather intriguing and confusing episode which I will attempt to piece together with some commentary below. Those who do not live in the tri-state area, particularly one of the more insular NY/NJ communities, will once again be rather surprised to find out about all the government funded goodies that are enjoyed by those who simultaneously scream about the massive property tax rates that they pay and the discrimination against private school students.

For a number of years, the Lakewood Board of Education has outsourced pre-school and special education programs. Starting this summer, the State of New Jersey, upon review of outsourced programs, made it clear to the Lakewood Board of Education that it would not continue to fund preschool programming (at a tune of $4 mil), should the Lakewood Board of Education continue their contracts with certain outside providers that did not pass muster. The Lakewood BOE voted to discontinue such contracts and bring the special education in-house. The BOE believes that outsourcing (at least outsourcing to these schools) was not a responsible and efficient use of taxpayer money.

The timing, as in the other school closings, couldn't be worse. One program, frequented by a good number of frum parents, which goes under the name Tiny Tots simply closed its doors. Many Lakewood Tiny Tot parents are irate, even going to such (inappropriate) lengths such as holding a midnight protest in front of one BOE member's home. They are up in arms that FRUM board members would shut down "THEIR" program and force their children into PUBLIC SCHOOL. Employees and spouses are irate that the BOE, in these difficult times, would put a number of people in the kehilla out of work.

Here is my take: Like it or not, their children were enrolled in public school, but because the Lakewood BOE had outsourced pre-school services, parents were able to "have their cake and eat it too." Government funding essentially created a "frum" private school and parents were happy to have the government paying for their children's therapies and daycare, within a private environment. And until the State came to take a good look at the program, where they expressed concerns about the curriculum and facilities, everything was rolling along just fine.

But as we all know, when you aren't paying your own way, there is no such thing as "private"; strings are always attached. Certainly there was more freedom to include a Jewish education within the pre-school programming, but in the end, the program was accountable to the state because it was not independently viable. As one BOE member stated, "While they [parents who were receiving full time day care] were able to have the amenities of Tiny Tots at a reduced rate due to the profit made by Tiny Tots from the BOE contract, I don’t think the BOE is responsible to provide them with full day day care. If Tiny Tots closed down because they can’t turn a profit from that portion of the business, why should we be held accountable? "

Which brings me to another observation---their seems to be some confusion amongst commentors about the responsibility of the BOE members. While these members are often elected because of a cost cutting/tax cutting agenda, I think that the Orthodox community fantasizes that public programming cuts will be cut, while the community will see an increase in government goodies. Ultimately, BOE members have a fiduciary duty to represent the best educational and financial interests of all those who reside in the School District. And in this case, Board Members had to preserve a budget over the jobs and profits of owners and employees of an outsourced programs.

I feel terrible for the parents who have had the rug pulled out from under them, seemingly without warning. But amidst the yelling about PUBLIC SCHOOL and hurting people in the community, I think it is important to understand how government funding works. Should vouchers ever become a reality, as so many people hope for, be prepared for more of the same. There is no such thing as a free lunch.

Guest Post: The New Normal

With thanks CJ Srullowitz, a financial advisor in New York City and blogger. I have more guest posts coming (as well as some original posts) and I am very thankful since I have work coming out my ears, to say nothing of the real work of the month, preparation for Yom Tov.

The New Normal

Once, when I was in the eighth grade, the boys in my class were discussing what to do with their bar mitzvah money. One of the boys mentioned something called a money market, which he explained was just like a savings account, and paid around ten percent interest. To my young, impressionable, pre-teen mind, that number became the benchmark against which all other rates of return were judged; for years, I considered ten percent to be a normal passive rate of return on money.

Fast forward many years. I became a financial advisor. I had already learned that ten percent money market returns were an aberration. In fact, no relatively safe investment could be counted on to deliver a return approaching that number. One would have to take on the full measure of volatility in the stock market to potentially average ten percent over time.
Fast forward to today.

Bill Gross is the co-Chief Investment Officer of PIMCO, a Newport Beach, California money management firm. PIMCO’s flagship Total Return Fund, under the stewardship of Gross, has grown to become the largest mutual fund in the world. Last summer, Gross and company described the economic circumstances and market conditions that they believe will face us over the coming years. They called it “the new normal.”

What is the new normal? Among other things it means slower economic growth, high unemployment, low interest rates, and tepid, “half-sized” - that is to say, four to five percent - stock market returns. In other words, you know the financial crisis we’ve been trying to shake? Well, get used to it. “All investors should expect considerably lower rates of return than what they grew accustomed to only a few years ago,” Gross insists.

The new normal will naturally have ramifications in the Jewish world, and in particular, the frum world. Consider:

• Yeshivos today, most of which were never-even at the height of the economic bubble-flush with funds, are under enormous financial strain. Some are being starved out of existence.
• While Information Technology is poised to be one of the growth areas of the new economy (along with Healthcare and Biotech), many frum people who are “in computers” do not currently possess the knowledge and skills for these jobs. According to a friend of mine who works for a cutting-edge IT firm, many are only trained for obsolete systems and have not kept up with the rapid changes in this field.
• For awhile it seemed like every former yeshiva guy and his brother-in-law were mortgage brokers, working very long days and weeks financing and refinancing properties for anyone and everyone who came along-making terrific commissions along the way. No longer. Fewer people are buying houses, fewer people are qualifying for mortgages, and those who are and do are finding that some banks (Chase, for example) are not taking mortgage loan applications from independent brokers.
• The frum world will always have its share of entrepreneurs, but with the severe tightening of credit, many are not getting the chance to borrow the money required to build, or even expand, businesses. Established real estate investors are finding deals, and many have cash on hand to finance them. But many younger people who are trying to get started in that business have it tough.
• One of the biggest supporters of kollelim in Eretz Yisrael saw his fortune-in the hundreds of millions-evaporate in a matter of weeks. I happened to meet him briefly by chance when he was borrowing office space from a client of mine, and watched as he sat hunched over on his cell phone trying to keep his kollelim from going under. He will survive, but many of his beneficiaries are already leaving kollel and returning to America.
  

And the setbacks did not begin in the last two years.


In 2003, The Wall Street Journal reported how Indians were quickly replacing Jews as the premier diamond dealers in Antwerp, Belgium. The Jews, who had at one point controlled 70% of the trade, saw their influence dwindle to just 25% in a few years. That number is even smaller today. At the time, Henri Rubens, one of the community’s leaders, declared the end of the glory days noting, “We were too complacent. Now that we realize it, it’s too late.” Mr. Rubens went into real estate.

These past few decades have been remarkable for the Jewish nation, and for the Orthodox in particular. We have grown both materially and spiritually, and the two often worked hand-in-hand. Much of our largesse was committed to building a strong infrastructure of homes, shuls, yeshivos and mosdos.

But the last couple of years have been challenging; the infrastructure is showing strain and even some cracks. Many feel that we simply have to get through this rough period before going back to “normal.” But what if we’re in for a new normal? What if we need to adjust our thinking and our budgets accordingly-not just for a few years but permanently?

God will surely provide us with what we need; but our definition of “need” may have to be adjusted. Should a more moderate financial future face us, we must not allow it to slow down our spiritual growth. Our commitment to Torah and mitzvos, to educating our children and feeding our poor, to learning diligently and working honestly, must not waver.

But what we spend on our homes, our cars, our vacations, and even our simchas may need to be reigned in considerably.