• This opinion editorial by Konstantin Rabin discusses the importance of studying traditional investment strategies, such as those found in the Talmud, for their potential application to Bitcoin and other crypto investments.
• The article highlights a particular reading from the Gemara that advises investors to divide their assets into three parts: land, cash on hand, and risky investments.
• The article suggests that real estate is one of the most stable investments and can contribute to wealth preservation.
Traditional Investment Strategies
This is an opinion editorial by Konstantin Rabin, a finance and technology writer. As a huge supporter of all things crypto, and especially Bitcoin, my thoughts often drift to a time before this revolutionary technology appeared on the scene, and I stand in awe of what it is bound to accomplish. I wonder: How would our forefathers have looked at it, and how can we use their teachings, applying the thought of the old thinkers to our modern existence? While the money management strategies that can be found in books from thousands of years ago might seem crude or irrelevant to us today, I have always tried to look past the words on the page and into the meaning behind them to figure out what lessons they might teach us today. One day, while chatting with a friend about this, we considered why Bitcoin might even be backed by Talmudic teachings.
The Start Of An Idea
I’m not a religious person by nature, but it is hard to avoid conversations that stray off into that realm when sitting with some of your Jewish friends who are keen students of the Talmud and all things relating to Judaism. So, one night as I sat with one of these friends of mine, he brought up the Gemara, a component of the Talmud that incorporates investment advice and is often praised for its simplicity and effectiveness. The 63 books of the Gemara serve as a commentary on the Mishnah which in turn serves as first major writings of Jewish oral traditions spanning hundreds of years. The section that my friend was referring to though was reading that goes as follows:
“R Isaac also said: One should always divide his wealth into three parts: (investing) a third in land ,a third in merchandise ,and (keeping) a third ready at hand.”-The Gemara Tractate Baba Mezi’a 42a
Divide Into Three Parts
The idea is that in order invest your money properly you should divide your assets into three equal parts spread equally among land ,cash at hand ,and risky asset .Hence this is what traditional Jewish diversified portfolio would look like :
A Third In Land – Land or if we generalize real estate is one most stabile investment out there .Buying holding onto land or any other type residential commercial real estate has been practice for thousand years just valid todaywith expectation real estate market growing compound annual growth rate 10 .7 % 2022 2031 .Hence keeping portion fund in real estate seems great wealth preservation growth opportunity .
Cash On Hand
Cash at hand means having liquid asset available emergency situation easily converted cash form also known liquidity .Having enough liquid asset cover expenses six month even year wise decision protect against unexpected expense like medical emergency job loss etc .Having emergency fund helps reducing stress levels allowing investor take advantage opportunities arise markets without fear losing important part portfolio because required immediately fund new venture or purchase capital good etc