Entering text into the input field will update the search result below

Add A Pinch Of Salt And Yeast To Your Portfolio: Financial Advisors' Daily Digest

Mar. 05, 2018 12:13 PM ET2 Comments
SA For FAs profile picture
SA For FAs


  • In which your correspondent derives investing lessons from the kitchen.
  • Jeff Miller discusses the risk of a new trade war, and the problem with hiking tariff rates.
  • Yuval Taylor discusses the factors predictive of EPS growth.

Please excuse today's random commentary, but I saw a passing reference to "salting away" one's wealth, and it got me thinking a bit about this curious phrase. Of course, I understood that salt was used in ancient times - and even in some places in the world currently - as a preservative. But I didn't know how salting meat or fish prevents spoilage, so I looked it up and discovered that the salt - by drawing out the water - fosters an environment unsupportive of bacterial growth.

This bit of food chemistry enhanced my appreciation of investing. Sure, "salting away" money for the future means saving money. But the "how" adds insight. Using the above analogy, we see that the effort to preserve something paradoxically requires a diminution of something else. When we desiccate our deli, we get to eat corned beef.

And so it is with wealth, which we get to keep by "drying out" the vitality which surrounds it; in other words, the risk to which it is put. A nice juicy growth stock can rise in value; when hit by a swarm of bad news, it can spoil. Take out it out of the water - i.e., remove it from risk, by converting it to cash - and it doesn't do much of anything, but you get to keep it as is. Other ways of removing risk might include working longer or late claiming of Social Security, both of which dry up the succulence, and risk, of an early retirement.

Going a little further with the food theme, yeast struck me as the relevant metaphor for growth. For those who would like some more "dough," it's this little leavening agent that makes our bread rise. The single-celled organisms feed off sugars (i.e., the sweetness of your principal investment that you worked so hard to

This article was written by

SA For FAs profile picture
GIL WEINREICH - Author of "The Mentor," a unique parable for financial advisors and those who aspire to become one. I have worked in the FA arena since 1997, and during that time, the New York State Society of CPAs twice awarded its prestigious Excellence in Financial Journalism award to me for a monthly column I wrote on business ethics. Previously, I reported on international news for Voice of America (where I was awarded a newsroom writing award) and prior to that worked as an editorial assistant at U.S. News and World Report. I live with my wife and children amidst the verdant and vibrant hills and dales of Jerusalem.

Recommended For You

Comments (2)

Jacob Rothman, CFA profile picture
Mark Kurlansky wrote a best selling book on the history of salt. I just finished it. It is very long, but good. http://amzn.to/2FXmrR7
Balance is the key and knowing thy self and your reality. If you are young you can try yeast only because you have time to recover. If you are old, you need to salt some fish away unless you have already done so or are extremely wealthy like Buffet or Gates and what is a few billions to you. As a former avid fisherman, you don't want your investments to smell like unsalted dead fish on the beach.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.