Note: The story that I’m about to share is a fiction, and not a reflection of reality in Singapore.
The story goes….
On a bright, Sunday morning at a housing estate in Yew Tee, Misnah was beaming ear to ear, excited because she is going to finally get married to the love of her life, Ahmad the following week.
She and Ahmad had diligently save money in their Al-Wadiah savings account, giving Hibah of 0.8%/annum and the money accumulated is just nice to pay for their combined wedding at a halal restaurant.
They have also bought their lovely freehold condominium with a special themed concept and successfully attain Murabahah financing.
Ahmad since the first day, he started working, had diligently, invested his money in a shariah compliant equity fund, and now making a superb profit. He is smart, because during the subprime mortgage crisis in year 2008, he did a lot of top up, thus enhancing his portfolio return by so much more. That money is just nice, for their honeymoon trip to Morocco and also to finance the renovation cost of their new house. Ahmad is smart because gain of profit through capital appreciation is not taxable in Singapore. Alhamdulillah, all the profits belong to him.
Their wedding ensued with love and a year later, they were blessed with a beautiful daughter, named Siti.
Little did Ahmad know, his wife had also been investing in shariah compliant REITs, earning quarterly dividends, enough to pay for pampers and milk.
Ahmad gets his family covered under Islamic Insurance Takaful, because he loves his family.
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They also heard that the government is building an expressway called PUE (Pulau Ubin Expressway) and just issued Sukuk based on the ijarah model.
The Sukuk or Islamic bond is shariah compliant because the returns is not from interest coupons but from the toll reapt from the specially designed ERP gantries. Once the cost of building the expressway is recovered, the Sukuk will be redeemed at par.
Meanwhile, Ahmad quit his job as an engineer to fulfil his childhood passion to run his own business. He and his friend form a musharakah partnership, with 60:40 share. To set up the factory, his partner and himself, do it via the Istisna contract with XYZ financial institution and purchase the special raw materials from a local distributor under Salaam contract.
Time flies, their only daughter, Siti has grown up and want to go to a university in UK. She gets service based ijarah financing method to pay for her tertiary education. Her parents did some savings based on non restricted mudarabah, since she was young, and the money is just enough to pay for her food and accommodation while she is studying in UK.
Upon graduation, she found her soulmate, got married and the cycle continues……
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Now, back to reality.
Many of you might have read about DBS winding down its Islamic banking unit, The Islamic Bank of Asia Limited (IB Asia).
When I chat with my friends, they told me, that this is not surprising. HSBC insurance removed its Takaful products a few years back. NTUC Income closed its sukuk fund, NTUC Income Amanah bond too. It is some kind of a downward trend. 🙁
So the pertinent question is, “Is there really potential for Islamic Finance to grow in Singapore?”
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In my opinion, Singapore is the best country in the world to establish and grow Islamic finance.
We have a strong, well respected government, and a reputable brand name of a reliable financial hub with proven track records. Our economy is sound. We are rated the top investment grade of AAA by Standard & Poor. Our finance industry in Singapore is well regulated, with competent and highly qualified financial professionals. We are honest, sincere and if contracts or partnerships were formed, we stick and hold by to it.
Islamic finance thrives in such environment. 🙂
Although some may argue that, Singapore lack the critical mass of domestic consumers for Islamic Finance products, I believe that Singapore’s Muslim population of 700,000 is quite a sizeable niche market to start on and expand from there. In fact, I believe that Singapore’s Muslim population of 700,000 is a good core to start on.
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So with all the advantages that Singapore has to offer, how can we catapult ourselves to success? What is our story that we can share with the rest of the world, when it comes to Islamic Finance? 🙂
Stay tune on my blog, to discover more. Insya’Allah… 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
Yesterday, I went to Johor Bahru to watch a Malay movie, titled “Kapsul”.
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I was very excited to watch it simply because the movie features the special appearance of 2 individuals that I respected most in my life.
Firstly, my first internet marketing mentor, Dr Irfan Khairi.
(Dr Irfan Khairi and me 10 years ago)
I went to Dr Irfan’s “Jutawan Internet” seminar when I was still serving my national service, travelling all the way from Singapore to Kuala Lumpur by bus. He is the one, who gave me the inspiration to set up my blog, HelmiHakim.com when I first joined the finance industry.
Secondly, Tun Dr Mahathir, Malaysia’s former Prime Minister.
(Tun Dr Mahathir and me 5 years ago at an Islamic Finance seminar in Singapore)
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Tun Dr Mahathir inspired me with his authentic, robust and no nonsense style of leadership. .
He is a firm advocate of “berani kerana benar” (fearless due to truthfulness) principle and is a visionary leader.
I am also impressed with his sheer determination and commitment to uplift the economic standard of the Malay community, at large, even at his old age of 90 now.
When I studied for my finance degree years back, I had some difficulties to understand certain financial jargons and how the economy works.
I referred to a lot of Dr Mahathir’s brilliant speeches on the world economic crisis. Dr Mahathir’s ability to simplify complex subject matter, compound with his excellent communication skills, his honest, yet unorthodox, mind blogging interpretation of the finance world impressed me, a lot. A respectable leader, one its kind.
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So when the movie is out, I jump at the opportunity to watch it.
The movie itself presents an excellent and creative way to look back at history, the struggle of the Malays since pre-independence.
In the movie, a high tech security expert Zohri Ibrahim makes a bet with a few friends to steal a time capsule planted by Tun Mahathir which contains his vision for year 2020.
Once the capsule is activated, Zohri is taken on a journey through time where he learns about the struggles of the generation before him.
It shows how helpless our forefathers were during the Japanese Occupation, during the reigns of power of the communist, and fighting for independence from the British.
I was emotionally touched to see the pain, the struggle, the sacrifices of our forefathers, and a sense of gratitude overwhelmed me, appreciating how lucky we are today, living in a country where we can call it, our own. Never to be subdued, subjugate by foreign invaders.
The part that touch me the most is when Zohri comes back to the real world, and meet Tun Dr Mahathir in real person.
Tun Dr Mahathir gently touch Zohri’s shoulder and said, “Ingat orang muda. Perjuangan kita belum selesai…..”
In English translation, it translates as, “Remember young man… Our fight has not ended”.
I can feel the hairs on my body standing. A gush of emotions overwhelmed me. I can relate to this, because I see myself working hard everyday, finding methods, strategies on how to uplift the economic standards of my community through financial planning.
It is an uphill battle that I am fighting day and night. It a very tiring, yet rewarding experience.
Tun Mahathir’s words of wisdom transcend beyond countries, and is an excellent advice to many youngsters to appreciate what we have today, yet continue to work hard, upgrade ourselves and strive forward for the betterment of our community.
It personally evokes and injects motivation within me. Congratulations to the producers for the movie well done! Considering the steep budget allocated to this movie, it will be a special and memorable memento and a reminder for our future generation to come. Amin… Insya’Allah…. 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
Occasionally, I received whatsapp messages, from prospects who get to know me online, asking me for instant financial advice over the phone.
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“Which investment plan can give me the highest Returns On Investment in Singapore?
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Now, my investment make money. Should I buy more, sell or hold on to my position?
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Is insurance halal or haram for Singaporean Muslims?
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I have medical complications. Diabetes, heart problem, cancer. Any insurance that can cover me?
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I just started working. What plans should I take now?
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I am going to retire. My money not enough. What should I do?.
I want to go Haj. Can you help me take my money out of my CPF? If cannot, how can you help me?
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Now Singapore government introduce Medishield Life. Should I terminate my existing private hospital insurance plan? Why???? Why not???
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I am a government civil servant. If I go hospital, government cover me fully right? How to know and confirm?”
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A lot of questions. Most of the time, I decline to answer them immediately and ask them to arrange for an appointment with me at my office in Woodlands Civic Centre.
This is because, I believe every individual is different when it comes to financial planning. Some of you are single, young and adventurous.
Some of you are sole breadwinners supporting your wife and kids. Some of you have been working for the past 30 years and are looking forward to your retirement.
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I use this special formula when helping my clients to plan their finances. It is called FLAIR. 🙂
FLAIR – the acronym for Financial Objectives Liquidity Affordability Investment time horizon Risk profile
These are the few, simple, yet very important steps that I followed diligently when helping my clients plan their personal finances. Only after applying the proper process to gather these pertinent data, I will be able to formulate, develop and propose the most appropriate financial instrument to my clients.
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Financial Objectives To Be Established
I simply ask them, “Thanks for meeting me. What do you want to plan specifically today?”
Some people will like to plan for their child’s education. Some will like to plan to save up for their retirement.
Some will like to save up for emergencies, to improve their living standards or perhaps save up to accumulate, grow their wealth.
What is your financial objective? 🙂
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Liquidity
I ensure that my client has sufficient liquidity that he can call on in an emergency (minimally 6 times of monthly expenses).
This is important, because in the event he fall sick and in need of money, he will not be forced to liquidate his insurance or investment plans at a loss. Most insurance or investment life plans require a long time commitment. If you liquidate the plans early, you might lose money.
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Affordability
I draft for my clients their cashflow statement. After determining that they have a positive cashflow, I ask for their budget.
Through this process, I ensure that my client will not be over committing in the premium that he/she has to pay for the financial instruments that I recommend.
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Investment time horizon
If my clients want to plan for their retirement, I ask the, how long more are you going to work before you retire?
If my clients want to save for child’s education, I will ask for their child age, and the university, they will like their child to enrol in?
If my clients want to invest and accumulate their wealth, I will ask, how much time they can wait before realising their profit?
In short, what is your investment time horizon? Planning strategic financial objectives for an investment time horizon of 5 years is totally different than planning for long term financial objectives for 15 years or more.
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Risk Profile
I ask my clients a few relevant questions to determine my client’s risk profile.
Are their risk profile, conservative, moderately conservative, aggressive, moderately aggressive?
This will ensure that my client will feel comfortable with the recommendation that I proposed.
If you need advice on financial planning in Singapore, do whatsapp me at 96520134 for an appointment. Every week, I meet 5-6 individuals just like yourself online, and I hope to share my financial planning expertise with more of you out there. See you around. Insya’Allah. 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
Latest, hot and spicy news!!! 1st Singapore Idol winner, Taufik Batisah is getting married!!! 🙂
I was humming, Singapore Idol’s Taufik Batisah, latest song, “Awak kat mana”
which means “Where are you?” in Malay….
The song is so catchy and the dance moves are so slick, cool and contemporary…. Nevertheless, sometimes, it can be annoying, when people keep repeating, “Awak kat mana? Awak kat mana? Awak kat mana?” :p
And as a financial consultant, everytime I hear this song, it reminds me to ask myself,
“Where Am I FINANCIALLY?” 🙂
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I used a few financial indicators and ratios to determine my financial bearings.
After doing my cashflow statement and my networth statement, I used these financial ratios to determine, if I am financially okay or not. I encourage you to use it too.
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1) Basic Liquidity Ratio
Basic Liquidity Ratio indicates your ability to meet your monthly expenses and other emergency needs.
Basic Liquidity Ratio= Cash/monthly expenses
Like a Malay proverb which says, “Sediakan payung sebelum hujan”, which literally means ‘Prepare your umbrella before it rains”.
In my own words, you need to prepare some liquid cash in your bank, that you can take out anytime you need, without any hassle.
As a rule of thumb, if you are an employee, I encourage you to have at least 6 months of your monthly expenses in your bank, ready for use during emergency.
If you are self employed, where your income can fluctuate up and down, have at least 12 months of your monthly expenses in your bank.
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2) Liquid Assets to Net Worth Ratio
Liquid Assets To Net Worth Ratio calculates the amount of net worth you have in terms of cash.
This is important because in an emergency situation, it may not be easy to convert your assets into cash, without any hassle.
You wont caught up in a situation, as my mum always say, “nak terberak, baru nak siapkan jamban” which literally means “wanna shit, then you want to dig a hole.”
Therefore, it is necessary to maintain some assets in cash.
Liquid Assets to Net Worth = Cash / Net Worth
I recommend you to have at least 15% cash in proportion to your networth.
(measure the proportion of ‘take home’ income, net of CPF contributions, used to make regular repayments of debt)
Debt Service Ratio = Total monthly debt repayments / Monthly take home income
I recommend youto have a debt service ratio of 35% and below. It means you have enough take home pay to service your monthly debt repayment.
Anything above than that is unhealthy and will put a financial strain in your life.
You will not want to live life, waking up every morning, only to work and slog hard like a slave just to earn enough to pay your debt. Have some financial buffer and live life comfortably! 🙂
(calculates the proportion of income the one sets aside as savings for the future)
Savings Ratio = Savings / Gross Income
Personally for me, if you are still single, don’t have much financial commitments, I highly recommend you to save as much money as possible. The higher your savings ratio, the better it is!!! 🙂
If you are married, have kids, and aged parents to support, target to save at least 20% of your gross income.
((This Year Income – Last Year Income)/ Last Year Income) X 100
As you know, I am self employed and I make money by earning commissions when I provide my clients with financial planning advice. I have an excel spreadsheet where I monitor my commissions earned every month, cumulatively every year.
I expect my change in income ratio to increase steadily by at least 20%/year. This is imperatively important to me and also my clients, because they know, that my financial planning practice does well, and I can stay in the business for long, to service them, as long as they live! Alhamdulillah, my production improved by 32% last year and for the first time in my career, I become the top 85 financial consultants in my insurance cooperative in the whole of Singapore. 🙂
If you are self employed or running your own business, I encourage you to calculate your own Change In Income Ratio too! 🙂
and by the way, if you are still wondering, what’s the Taufik Batisah’s song that I have been talking about earlier, tune in below! Enjoy! 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
Alhamdulillah…. A lot of you, have contacted me. I have 5 mentees taking exams now, to join me as a financial consultant and many more visitors from my blog who express their interest to support Islamic Finance in Singapore by subscribing our shariah compliant financial instrument.
I will love to interact with more of you out there, readers of my blog, thus I will like to throw a short quiz. This quiz will test you on your understanding of fundamentals of Islamic Finance in the most practical sense. You can email me your answers at helmihakim@hotmail.com and I will revert you with your results.
(Don’t worry if you are unsure of the answers. Just give it a try!) Insya’Allah… 🙂
1) Ahmad changes $SGD 100 to RM$250 on the spot with a money changer at Raffles Place shopping centre. Is the transaction
Halal or Haram?
2) Salim buys 5 gram of gold online at $150, paying immediately via bank transfer and collect it from the seller, 1 week later. Is the transaction
Halal or Haram?
3) Ramli went to his friend, Muthusamy Mamashop to buy 2kg of dates for break fast in the month of Ramadan. He promises to pay $20 on the 1st day of Shawal. Is the transaction
Halal or Haram?
4) Yusof went to the car dealer at Commonwealth and test drive some second hand cars. He got interested with Honda Civic Hybrid and immediately paid $20,000 cash. Nevertheless, he collects the car 7 days later, after settling season parking application with HDB. Is the transaction
Halal or Haram?
5) Idris owns a Samsung handphone. His brother owns an Iphone 5. They decided to exchange phone as Idris is an Apple fan whereas his brother is a Samsung fan. Is the transaction
Email me your answers at helmihakim@hotmail.com or whatsapp me your answers to 96520134 (if you are lazy…hahahah)and I will revert you with your results! Look forward to hear from you soon! 🙂
p.s. By the way, if you wish to discover a simple & halal way to create a positive monthly cashflow and calculate your net worth for FREE, then please click here…
A certified financial consultant, Helmi Hakim has won praise for his patience, perseverance and practicality when solving his clients’ financial concerns. For more information on how you can manage your finances better, contact Helmi Hakim at 96520134.
