Profit From a Loan or From an Investment? - בהר בחוקותי

Thursday, 11 May, 2023 - 9:28 pm


Profit From a Loan or From an Investment? 

Do You Prefer to Profit from a Loan or from an Investment?

Clearly, the Torah prefers the profit from an investment to the profit from a loan. In this week’s Parsha we read the prohibition against paying or receiving interest from a fellow Jew: 

If your brother becomes destitute and his hand falters beside you, you shall support him [whether] a convert or a resident, so that he can live with you.

You shall not take from him interest or increase, and you shall fear your God, and let your brother live with you.

You shall not give him your money with interest, nor shall you give your food with increase.

The difference between profiting from a loan and profiting from an investment, is that the person giving the loan is positioned to receive profit (the interest payment) regardless if the borrower receives a profit or suffers a loss, the borrower is responsible for repaying regardless of the outcome of the enterprise. In an investment, by contrast, the investor profits only if the underlying enterprise profits and will take a loss if the enterprise loses money.

Another way to look at it is that the lender seeks to profit from money that belonged to him in the past but no longer belongs to him. The money lent no longer belongs to the lender; thus, the lender is not responsible if the money is lost, or poorly invested. The investor, on the other hand, maintains ownership over the money invested, thereby incurring its losses but also benefiting from its profits.   

These two models, the loan and the investment, also exist in our relationship with G-d. We can choose the loan model, in which G-d gives us “money” - potential for success, yet the “money” is considered our own, and anything we achieve is exclusively our own accomplishment. Alternatively, we can choose to experience our relationship with G-d In the investment model, where G-d is a partner with us in our work, actively participating in our efforts. When we appreciate that G-d is an active partner in our efforts, we unleash a degree of holiness, spiritual meaning, and success far greater than the limited capacity of a created, finite, being.

Adapted from the teachings of the Rebbe, Lekutei Sichos Behar vol. 3 

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