# Tithing with the Bulls and the Bears

Question:

A few halachic questions on investments, specifically with regard to *maaser*:

- Is the interest on money (post-
*maaser*) invested in the stock market subject to*maaser*as well? I believe that it is. - If so, if I leave the money in the investment fund and reinvest the dividends, can I defer paying
*maaser*on it until it becomes liquid? - How about a Mutual Fund, which over a 10-year period experiences fluctuations in the annual rate of return? For example, if I invested 10,000₪, which grew to 12,000₪ at the end of 10 years, but during this time the annualized rate of return fluctuated greatly. How do I pay
*maaser*on this? - How do I calculate the
*maaser*if I invest 500₪ every single month for 10 years and earn interest at the end of the period? I know that my net investment (principal) over the 10 years is 500₪ x 12 months a year x 10 years = 60,000₪. If my net rate of return at the end of the 10 years earns me 7,500₪, do I owe 750₪*maaser*? This seems more problematic to me, since the rate of return here was based on different sums of money that accumulated over the months and wasn't based on the full 60,000₪, which only reached the fund in the last month. - If I designate the funds for my children's religious education and/or other needs, do I have to pay
*maaser*when I use the money for these purposes?

Answer:

- The Shach states that if a person invests his income after having taken
*maaser*from it, he does not have to re-*maaser*the principal, but any profit resulting from the investment is*maaser*able.[1] (I have already written about the minhag of*maaser kesafim*and ruled that there is no*chiyuvmaaser*and has already taken*maaser*from the principal, he should take*maaser*from the profit**after**it is sold.*Maaser*does not have to be taken each time shares are sold; one can wait to*maaser*all of one's profits at a fixed time, as will be discussed below, but it should not be done**before**the shares are sold. - Dividends can be
*maaser*ed upon payment. Alternatively, you can reinvest the dividends and defer taking*maaser*until the earnings become liquid. Calculate 10% of the dividend and 10% of the profit generated from it. If I understand your plan of action correctly, you want to take*maaser*from all the profit (generated from the principal and added dividends) when it is liquid. In that case, just subtract the principal from the total and take*maaser*from the balance. The balance would be the dividends plus the profit earned from the principal and from the invested dividends. - If you had invested in stocks, then the earliest you would take
*maaser*would be when you sold the shares and made a profit. However, it sounds as if you are discussing a fund in which you will receive payments at fixed intervals at different rates of return.In that case, you can choose to take

*maaser*at any time interval you like. If you wait until the end, it will be NIS 200 all at once. If you take it off intermittently, it will be 10% of the profit from the last time you took*maaser*until the time you have chosen to take it again. To avoid unnecessary complications it is advisable to take*maaser*when you withdraw cash from the fund for your personal needs. You will*maaser*all of the withdrawals until all that remains in the fund is the value of your principal that was already*maaser*ed. This explanation is in response to your situation in which the principal was already*maaser*ed. It would be simpler to avoid taking*maaser*on the principal invested and take*maaser*on all the withdrawals. The different rates of return are irrelevant. Ultimately you have to*maaser*all of the income. Some months the gain was less, some months the gain was more. When you withdraw the money, you take 10% of the amount withdrawn as*maaser*.[2] - You seem to be discussing a case in which the principal was already
*maaser*ed. (That is slightly more complicated and unnecessary to do.) If you withdraw all the money at once, subtract the 60,000₪ that was already*maaser*ed, and take off 10% of the balance (i.e., 10% of your income from the investment). It is of no consequence that some months you earned more than others and it makes no difference that the rate of return varied. It is all profit and is all*maaser*able.[3] - Yes, you will need to take
*maaser*from money that you plan to use for your children's Jewish education and other needs.*Maaser*money should be used for tzedaka only.[4] The Shach does quote sources that say that*maaser*can be used not only for tzedaka, but also for any*dvar mitzva*that the person is not obligated to perform and that he could not fulfill without using*maaser*money.[5] Some examples might be purchasing*sefarim*for a shul, paying a father for the privilege of being*sandek*at a bris, and donating towards a mikve or community*eiruv*. These mitzvos are not obligatory, and according to the Maharshal and Maharam, one can use*maaser*money if one does not have the funds for them. The Rema and Chasam Sofer disagree.[6] According to all opinions, if,**when the person decided to undertake the mitzva**, he planned to use*maaser*money, he may do so.[7] This is true even for one who follows the rules of*maaser kesafim*strictly.Since the custom of

*maaser kesafim*is not obligatory, one can undertake it in any way one wishes. Therefore, if when someone first made the commitment to take off*maaser kesafim*he intended to use the money for*divrei mitzva*, he can do so. I have discussed this in detail in other articles that can be found online.However, all this is only relevant when one is deciding what uses are acceptable for money that was previously designated as

*maaser*. The proper procedure is to assess one's total income and separate 10% as*maaser*.Your question seems to raise a different suggestion. You wonder if it is possible to subtract

*divrei mitzva***from your income**as non-*maaser*able, so that you will only take 10% of the income that you plan to use for personal needs. The answer to that question is that even the part of your income that is earmarked for a*dvar mitzva,*including the children's religious education and other needs, is*maaser*able and does not carry any special status. Therefore, it cannot be deducted from your*maaser*able income.[8]It would not be to your advantage to do it that way anyway.[9] You may have meant that you would like to consider your children's education as a dvar mitzva and use your

*maaser*money to pay for those needs.>Educating children is considered the father's responsibility and would not qualify as a

*dvar mitzva*even according to the lenient opinion.[10] Therefore, even after*maaser*has been separated from your total income, technically the*maaser*should not be used for your children's education. As noted earlier, however,*maaser kesafim*is a*minhag*one can accept or decline. Therefore, it is acceptable for a person to undertake the custom of*maaser kesafim*along with his own interpretation of a*dvar mitzva*(which may include his children's Jewish education) and still be considered to be acting admirably.

It seems from your questions that you invest in Israel and take *maaser* from your income before you invest the money. I have stated that this is possible and have answered accordingly. However, particularly when investing shekels in Israel, I recommend that you **not** take *maaser* from the principal before investing.

In Israel, one's return on shekel investments is usually linked to the consumer price index in order to counter inflation; on top of that, one earns interest. The adjustment for inflation (הפרשי הצמדה למדד) is not considered added income that is *maaser*able. The adjustment for inflation is a way of restoring the buying power that you had when you made the investment.[11] The interest that you receive is the *maaser*able income.

Therefore, if you invested money that had already been *maaser*ed, in order to calculate the sum to be *maaser*ed you will have to do the following:

- Deduct the amount of the original investment.
- Deduct the adjustment for inflation.
- The balance is your profit from which
*maaser*should be taken.

If your original investment was not *maaser*ed, then taking *maaser* is much simpler*.* Every time you withdraw cash from the investment, you take off 10%. You are taking *maaser* from the principal, the adjustment for inflation,[12] and the interest all at once, which is what you want to do if the principal was not *maaser*ed. That is why it is not recommended to *maaser* income that you plan to use for an investment in Israeli shekels.

In the case of investments for which no adjustment for inflation is factored in (as is often the case with U.S. dollars), you can invest money that was already *maaser*ed and easily take *maaser* just from the profits. Simply deduct the amount of the principal and calculate 10% of the balance.

The timing of the calculation of *maaser* is significant. *Maaser* is to be taken from the net profit, after the deduction of taxes, insurance, advertising, traveling expenses, babysitting expenses (that enable a woman to leave home to work), rental of business premises, and losses from bad investments. When can these costs be deducted? The Noda Beyehuda states that all the gains and losses of one year can be calculated together to come up with the net profit.[13] Other poskim seem to say that the period for calculating losses and gains can be decided by each individual.[14] However, once a calculation is made and the amount of *maaser* has been earmarked for tzedaka, one cannot subtract an amount to compensate for a loss that took place **after** the date on which the *maaser* was calculated. That loss must be included in the next *maaser* period.[15] A person can decide to *maaser* his money once a year, twice a year, or more, at fixed intervals or according to arbitrarily chosen periods.[16]

Not only a financial loss in the fund the person is making his money in should be deducted. Even a loss in another endeavor can be factored in. Should someone suffer a sizeable loss in a **different** investment after having invested previously *maaser*ed money, he can only deduct that loss from the interest on the principal, not from the principal itself. If the loss exceeds his entire profit from all his investments and business transactions, he cannot deduct that loss, as he would have been able to do had he waited to *maaser* the principal and interest as one unit. Since the entire amount (principal plus profit) exceeds the loss, the loss would have allowed him to deduct more of his *maaser*able income and he would be paying less *maaser*.[17]

Therefore, it is simplest to invest un*maaser*ed money and to *maaser* it after it has been withdrawn for personal use.

BookID: 2 Chapter: 249

[1] ש''ך יו''ד רמ''ט סק''ב.

[2] You don't have to take it off at the time of withdrawal; you can wait to calculate your* maaser* at a fixed future date and calculate the total gain vs. total loss.

[3] I don't really see a difference between this case and the case described in question 3. In the case described in question 3 there were annual interest payments that were compounded to the principle. The rate of return for the second year is going to be based on a higher sum than the first year due to the compounded interest. It is even possible that the larger sum will be a factor in setting a higher rate of return for the second year. Every subsequent year the rate of return will be based on an even larger sum due to the compounding interest. In question 4, you are adding NIS 500 to the investment every month. This may seem more obvious to you that the ROR is based on a different sum but apparently the same thing is happening in the case described in question 3, just that there it is regarding compounded interest and in question 4 it is a cash deposit.

[4] ערמ''א רמ''ט ס''א ואין לעשות ממעשר שלו דבר מצוה כגון נרות לבית הכנסת או שאר דבר מצוה רק יתננו לעניים עכ''ל (ונראה דה''ה לכל דבר שהוא בכלל צדקה אף שאיננו לעניים).

[5] ש''ך רמ''ט סק''ג.

[6] עיין ח''ס יו''ד סימן רל''א, ולשון הרמ''א הנ''ל, יו''ד רמ''ט ס''א, לא משמע כוותייהו.

[7] עט''ז רמ''ט סק''א.

[8] ואין לומר מאחר דיש אומרים דיכול ליתן ממעות מעשר לדבר מצוה אף אם לא קי''ל כוותייהו ובעינן דיתן לצדקה דוקא, מ''מ מאחר דאינו אלא מנהג ויש להקל בספיקות כמו בדרבנן, א''כ י''ל דעכ''פ כדאי לסמוך עליהם בזה שלא נחשיב הוצאות לדבר מצוה כהוצאות לדברי רשות, וכל סכום המעות שצריך לשלם לדברי מצוה לא נחייב אותו להפריש עליו מעות מעשר, ז''א דהרי הוסיף הש''ך לשיטתייהו דאי''ז אא''כ לא יוכל לקיים המצוה מבלעדי שישתמש במעות מעשר, והרי אין אנו מתירים לו להשתמש בהם ממעות מעשר, ובכ''ז הוא רוצה לתת לדבר מצוה, ועל דבר מצוה שיכול לשלם מכיסו מעולם לא ס''ד דחשיב כצדקה.

[9] If you earn $1000 and therefore owe $100 in maaser, of which you spend $10 on a dvar mitzvah, you owe $90 to tzedaka. If you earn the same $1000 and deduct $10 to be spent on a dvar mitzvah before calculating the maaser, you're left with $990, of which you owe $99 to tzedaka. It's the difference between a tax deduction and a tax credit.

[10] עיין אהבת חסד פרק י''ט ס''ב דכיון שחוב עליו ללמדם או לשכור להם מלמד נמצא פורע חובו ממעשר, וע''ע שו''ע הרב הל' ת''ת פ''א ס''ז. וע''ע באגר''מ יו''ד ח''ב סימן קי''ג דבמקום שיש חוק מצד המלכות לשלוח בנות לבית הספר שוב הוי כדבר שבחובה ולא יוכל לנכות הוצאת חינוך בנות ממעות מעשר עכ''ד. ולפ''ז אפשר דהאידנא דחוקי המדינה נותנים רשות ללמד ילדיו בביתו יוכל לשלם לבית הספר ממעות מעשר דמי הוצאות חינוך העולים על מהשהיה צריך להוציא עליהם אילו לימד את בתו בביתו. ופשוט דרק אותו חלק של השכר לימוד שמיועד לחנכה לתורה ולמצוות אבל אותו חלק שמיועד ללימודי חול ולהסעות ולאוכל ולינה וכדומה אינו בכלל דבר מצוה. אלא דכ''ז רק אליבא דמקילים וכ''כ דאין לסמוך ע''ז אא''כ התנה כן בשעה שנתחייב לביה''ס או בעת שקיבל ע''ע מנהג מעשר כספים.

[11] נראה דאין המדד הוא משקף את ההפרש בדיוק כפי שההלכה מחייבת, אמנם מסתבר שהוא בערך נכון. באג''מ יו''ד ח''ב ס''ס קי''ד כתב דצריך לשער לפי פירות שקונים זה ביותר רוב בני אדם ובדברים הנחוצים וקונים תמיד כעניני אכילה וכדומה שהן צרכי החיים ממש לחיותם, כי הדברים הגדולים כבתים וקרקעות והדברים שקונים אותם רק מהרוחה גדולה שיש לאדם לא שייך לשער בהם כי לדברים האלו יש הרבה טעמים שמשנים את השיווי שלהם ולא שייך לשער בהם עכ''ל. וכמדומה שהמדד נקבע כפי ממוצע של כמה דברים יחד, וביניהם דברים שאין לחשב אותן לדעת האג''מ. ומאחר דכתב באהבת חסד פי''ט ס''ג בהגה''ה שיפריש בצמצום ולא באומד, וכ''כ בשו''ת חות יאיר סימן רכ''ד וע''ע בפת''ש יו''ד רמ''ט סק''ב ובכנה''ג שם, ואין לנו דרך מדוייקת לשער היוקר יש עוד טעם לא להשקיע כספים שכבר הופרשו מהם מעשר כספים, ובפרט שיש חשש שלא יפריש מספיק דאולי לפי המדד ינכה יותר ממה שמותר לנכות מהריוח. ע''ש דפסק דמי שקנה בית לפני עשר שנים במאה אלף דולר ועתה מכר אותו במאתיים אלף דולר אולם יש לאותם מאתיים אלף דולר כח קנייה של מאה עשרים אלף דולר של שעת הקניה, שמחשב הריוח שלו עשרים אלף דולר בלבד. וע''ע בשבט הלוי ח''ט סימן ר''א שהצמדה למדד אינו בכלל ריוח.

[12] Even though I have stated earlier that one does not need to maaser the adjustment for inflation, nonetheless, I have included it here as maaserable. The reason is that the adjustment for inflation is restoring the buying power of the principal. Therefore, when discussing a case in which the principal was already maasered, then the adjustment for inflation does not need to be maasered. If the principal was not yet maasered, then when maasering the principal one also needs to *maaser* the adjustment for inflation. They are viewed as one unit.

[13] שו''ת נו''ב יו''ד סימן קצ''ח.

[14] שו''ת שער אפרים סימן פ''ד וחות יאיר סימן רכ''ד.

[15] ראיתי בספר צדקה ומשפט פ''ה ס''ק ל''ח דפליגי פוסקים הנ''ל בציון 9 על הנו''ב. דלפי הנו''ב זמן המוגבל לחשבון מעשר כספים הוא פעם בשנה ולפי שאר פוסקים הוא כפי ראות עיני כ''א ואחד להחליט מתי שרוצה. ואפשר דלא פליגי אלא דכו''ע ס''ל דיחשב לכה''פ פעם בשנה אולם גם יכול לחשב בתוך השנה מתי שירצה.

[16] בדרש משה על ט''ו בשבט הרב משה פיינשטיין מייעץ להפריש מעשר כספים לכל הפחות פעם בשנה.

[17]For example, Zevulun invested $1100 in a stone company and earned a profit of $200. During the same period, he invested $700 in a restaurant and lost his entire investment. If the $1100 invested was not maasered, he calculates $1300 of maaserable income and a $700 loss, which leaves $600. He should then give $60 to tzedaka. However, if he had originally invested $1100 that had been maasered, he has already given $110 to tzedaka. In this case, the $200 profit is totally nullified by the $700 loss, but overall he gave $50 more to tzedaka than he would have if he had invested unmaasered principal.

After giving *maaser*, one is permitted to donate more to tzedaka, but one should specify that the additional money be for plain tzedaka and not *maaser*. See the note on Ahavas Chesed 19:3.