Some of you might have known me as the financial consultant that help Muslim families, plan their finance in a shariah compliant way in Singapore . You might have seen me in the papers, on national TV, dispensing financial advice specifically for Muslims in Singapore.
(Snapshot of my recent interview at a show, “Demi Cinta” in Suria. Picture from Toggle.sg)
One of the most common questions that I always get, is how do I get the motivation.
The strength.
The energy to push forward, in my journey to promote Islamic Finance in Singapore.
I have to admit, that it seems an arduous task ahead.
As an entrepreneur running my own financial practice, sometimes, my business is up.
AND sometimes, my business is down.
When I feel down, I read on the translation of the Quran and Seerah (biograghy) of all the messengers of God, from Prophet Adam to Prophet Muhammad (May Peace and Blessings Be Upon Them All).
Here are some learning nuggets that I learnt, that motivate and inspire me to continue to work hard to promote Islamic Finance in Singapore.
…………………………………………………………………………………………
………………………………..
1) Follow the power of focus of Prophet Noah (Peace Be Upon Him)
When I am feeling down, I remembered reading about the story of Prophet Noah (Peace Be Upon Him).
Allah S.W.T commanded him to build a ship.
“And construct the ship under Our Eyes and with Our Inspiration and address Me not on behalf of those who did wrong; they are surely to be drowned.” (Quran 11:37)
Prophet Noah (Peace Be Upon Him) chose a place outside the city and far away from the sea to build his ark.
Some mocked and laughed at him.
Making comments about the ship’s location, far from any water source.
………………………..
..
They had no comprehension of the power and magnificence of God.
SO they could not understand why Prophet Noah (Peace Upon Him) would build a ship, on the top of a hill, far away from the ocean.
They called him crazy and laughed out loud.
The ship began to take shape and when it was finished, Prophet Noah (Peace Be Upon Him) patiently waited for the command from God.
…………………………………………………………………………………………
…………………………………
When others said, many Muslims in Singapore don’t mind taking riba (interest)… The market is not big enough… When others questioned me on why I need to talk about Islamic finance, I remember the story of Prophet Noah (Peace be Upon Him)
I ignore these voices. I stay focus.
If I can help even 1 client plan their finance in a shariah compliant way, I have done my job.
If I can show 1 client, how they can reduce their riba/interest payable by even 1%, I have done my job.
Even if I meet with rejections upon rejections, after proposing shariah compliant initiatives, I have done my job as a Muslim financial consultant in Singapore.
2) The Importance Of Planning
Prophet Muhammad (Peace be Upon Him) planned very well when doing his Hijrah from Mecca to Madinah.
The Hijrah of Prophet Muhammad (Peace Be Upon Him) is one of the most important episode in the history of Islam.
Allah S.W.T could have just instructed the Angels to carry Prophet Muhammad (Peace Be Upon Him) from Mecca to Madinah, without effort.
However, we all know that the Hijrah does not happen that way.
Our beloved Prophet Muhammad (Peace Be Upon Him) had strategies and plans, in place. Some of them are….
– Asking Sayyidina Ali (May God Be Pleased With Him) to replace him at his sleeping place
– Went out of his house, when the sun is scorching hot, something that those who were travellers wont do at that point of time
– Choosing Sayyidina Abu Bakar Assidiq as his companion for hijrah to Madinah
– Choosing alternative route to Madinah which is further and not the route commonly used by others
– Asma’ bt Abu Bakar and Abdullah Bin Abu Bakar to send information and food supplies while he is hiding at at Thur cave
– Amir bin Fuhairah, the individual to remove the footprints of Prophet Muhammad (Peace Be Upon Him) and Sayyidina Abu Bakar
(Source: “Panduan Cashflow, Apa Yang Kamu Tuai Simpanlah Bersama Tangkainya” book, by Suzardi Maulan (Pakdi))
………………………………………………………………………………………..
……………………………………………………………………………………
My take is that if our beloved Prophet Muhammad (Peace Be Upon Him) planned very well when he is doing his hijrah, we should also have a plan, in doing anything in our life.
Everyday, I think of strategies.
Strategies on how, to get more people to plan their finance in a shariah compliant way in Singapore.
How to get more people plan their finance the shariah compliant way in Singapore?
Facebook marketing.
Blogging.
Words of Referral.
Making Educational Videos etc2…
I work hard to introduce these systems in place.
Alhamdulillah…. Till date, I have over 600 clients who trust their finance with me, not only from Singapore, but also from Malaysia, Indonesia, Bangladesh, India and many other countries… 🙂
Remember, my friends.
Anything you do, plan and prepare in advance.
If you don’t have a plan, you will go haywire. Create a plan and stick through your plan. Follow the footsteps of our beloved Prophet Muhammad (Peace Be Upon Him).
……………………………………………..
….
.
3) Motivation to get out of debts with interest
I adviced my clients on strategies to reduce riba, yet I have to admit that I am still servicing my housing loan. In Singapore, there is no murabahah financing, so its darurah, for us to take loan with interest to get our house.
We need a roof over our heads.
Everyday, I make doa/prayers/supplication to Allah S.W.T. to grant me the strength, the rezeki to accumulate as much cash as possible so that I don’t have to take loans with interest.
My motivation to stay away and get out of debts also propel me to me to work hard everyday, because interest/usury is haram. In addition to that, I need to walk my talk as an ambassador to promote Islamic Finance in Singapore.
I am also a firm believer of the ‘Man jadda wajada’ principle which means whoever puts in the effort, God willing, they will get what they work for.
Make doa. Put in a lot of effort and focus on your work. Tawakkal….
Insya’Allah…You will get what you work for.
4) Motivation to help my community grow strength by strength
Everytime, I read the news, I see Islam being potrayed in a negative light. What I learn in my part time madrasah (religious school) and what I see in the newspaper is totally different.
Of course, to explain the beauty of Islam is the jobs of our Islamic scholars. We seek their leadership to guide us, on how to live our life, in accordance to the Quran and Sunnah of our beloved Prophet Muhammad S.A.W.
I am glad that Asatizah Recognition Scheme (ARS) is now made compulsory, to ensure that our religious teachers and scholars are reliable guides for our community.
We need their expertise. We need their guidance. Reading and interpreting the Quran (God’s words) is not like reading a story book. We need… We depend on our Islamic scholars to interpet the verses of Quran and Hadith and apply them in Singapore’s context.
Nevertheless, I feel everyone has a role to play. Even in my position as a financial consultant in Singapore, I have a role to play. Empowering our Muslim community with financial knowledge is crucial. My job is real.
I advice my clients and their children, that whatever we do in life, we give our level best. Aim to be the best. Prophet Muhammad (Peace Be Upon Him) says, “The best of people are those that bring most benefit to the rest of mankind.” (Daraqutni, Hasan)
I hope, in the future, some of the children, I plan for becomes a scientist, becomes a lawyer, becomes a school teacher
or even become an Olympic Champion!
I hope, some days, I can see, my clients’ children names on the headlines of the newspapers, bringing glory to our community by being the best in their specialisation, in their chosen field.
………………………………………………………….
………………………………………………….
………………..
With the following reasons above, I am more determined than ever to help with the development of Islamic Finance in Singapore.
Takaful.sg serves as a platform for me to educate. Empower.
AND reach out to more Singaporeans who are interested to know more on the practicality and relevance of Islamic finance, in Singapore’s context.
………………………………………………………………
…………………………………..
In Takaful.sg, you can sign up for “Your Financial M.A.P” session (Worth $500) for FREE.
“Your Financial M.A.P. Model” is A Standard Step By Step Guide.
To grow your money.
AND wipe off all your loans with riba,
using Shariah Compliant Financial Strategies.
……………………………………………………….
……………………………….
You will also learn on how you can calculate your net worth in less than 10 mins, which allows you to fully understand your financial situation and create a master plan to get started on your journey to achieve the financial freedom you desire.
You will discover bulletproof strategies on how you can increase your savings by 20%, even if you have not saved a single dollar before (It’s like having money growing from your pocket out of nowhere)
I will share with you 8 financial ratios that acts as a financial compass, giving you the direction to the oasis of financial promise land.
I will also share with you a Quick way to save up money for emergencies. This will give you a peace of mind, rather than panicking and trying to scramble up money from nowhere. You know, you have a safety net to protect you 100%.
Go to Takaful.sg now and sign up for your FREE session today! Insya’Allah… 🙂
In a few more days, we Muslims, all over the world will celebrate Hari Raya Haji.
Also known as Hari Raya Adha. Great Day of Sacrifice! 🙂
The festival marks the end of the Haj, which is the Muslim pilgrimage to the holy city of Mecca in Saudi Arabia.
It also commemorates the willingness of the Prophet Abraham (Peace Be Upon Him) to sacrifice his son Ismail in an act of obedience to Allah S.W.T.
Prophet Abraham (Peace Be Upon Him) was commanded to offer his son Ismail up for sacrifice to Allah S.W.T. Though it grieved him greatly, he made ready to perform the task.
However, as he was about to strike his son, God stopped him and revealed that it was a trial of his devotion to the Lord.
Ismail’s life was spared and a ram sacrificed in his place.
………………………………………………………………………………………………………..
…………………………………………………………………………………………………………
During Hari Raya Haji, we Muslims go to the mosque for our morning prayers.
Then, we went visiting our parents and in laws.
(Myself and my wife in our traditional clothes, visiting our family)
………………………………………..
………………
…
One of the main rituals of the festival is the korban, which involves the sacrificial slaughtering of livestock such as lambs and goats.
The animals are slain in accordance with the proper religious rites, such that they suffer minimal pain.
An individual or a family will donate the sacrificial animal, and Muslims from a particular community will gather in fairly large numbers to help out in the slaughtering and distribution of the meat.
Recipients include the poor and the destitute and other Muslims.
Today’s post, I will like to focus more on methods of slaughtering according to Islamic guidelines.
When I dine out with my Non Muslim friends, they often asked me, “This restaurant don’t have Halal logo, but they never serve pork. You can join us or not?”
I usually agree to join them, on the note that I will only drink, but will not eat.
Then, they will ask me, “Why never eat? There is no pork? Only chicken, beef, mutton and seafood”
Then, I will start explaining…. This post might be educational for you too. 🙂
There is halal chicken and non halal chicken. There is halal beef and non halal beef. There is halal mutton and non halal mutton.
So, what is the difference that makes the difference?
It all boils down to the method of slaughtering. To attain the Halal logo, there are sets and procedures that we have to abide to.
………………………………………………………………………………………
………………………………………………………………………………………
Summary of conditions for Halal slaughter
Islamic law requires that animals intended for human consumption be slain in a certain manner.
The conditions for Halal slaughter can be summarized as follows:
1) The animal to be slaughtered must be from the categories that are permitted for Muslims to eat.
2) The animal must be alive at the time of slaughter.
3) No electric shock, bullet or any other means should be used before slaughtering.
Using any such method may lead to the death of the animal before it is cut. Islam prohibits Muslims from eating any meat coming from an animal that is dead before slaughter. Muslims are also advised to avoid eating anything doubtful.
………………….
………..
4) The animal must be slaughtered by the use of a sharp knife. The knife must not kill due to its weight. If it kills due to the impact the meat may not be permissible.
5) The windpipe (throat), food-tract (oesophagus) and the two jugular veins must be cut.
6) The slaughtering must be done in one stroke without lifting the knife. The knife should not be placed and lifted when slaughtering the animal.
…………………
………..
7) Slaughtering must be done by a sane adult Muslim.
The name of Allah must be invoked (mentioned) at the time of slaughtering by saying:
Bismillah Allahu Akbar. (In the Name of Allah; Allah is the Greatest.)
If at the time of slaughtering the name of anyone else other than Allah is invoked (i.e. animal sacrificed for him/her), then the meat becomes Haram “unlawful.”
If a Muslim forgets to invoke the name of Allah at the time of slaughtering, the meat will remain Halal. However, if he intentionally does not invoke the name of Allah, the meat becomes Haram.
The head of the animal must not be cut off during slaughtering but later after the animal is completely dead, even the knife should not go deep into the spinal cord.
Skinning or cutting any part of the animal is not allowed before the animal is completely dead.
Slaughtering must be made in the neck from the front (chest) to the back.
The slaughtering must be done manually not by a machine, as one of the conditions is the intention, which is not found in a machine.
The slaughtering should not be done on a production line where pigs are slaughtered. Any instrument used for slaughtering pigs should not be used in the Halal slaughtering.
………………………………………………………
…………………………………………………..
………………………….
Customary and Desirable Practices When Slaughtering
Water should be offered to the animal before slaughter.
AND it should not be slaughtered when hungry.
The knife should be hidden from the animal, and slaughtering should be done out of sight of other animals waiting to be slaughtered.
Animals should be killed in a comfortable way. Unnecessary suffering to them must be avoided.
The knife should be re-sharpened before slaughter.
Storage, Processing and Transport of Halal Meat
Meat chilled or frozen for export to Muslims should be stored in separate cold stores other than those in which pork or other non-Halal meat is stored.
Meat minced or processed for Muslims should not be minced in the same machines used to mince pork or other non-Halal meat.
(Summarised from halalcertification.ie)
I do hope your learn something from my sharing. 🙂
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… My mentees and I, financial consultants from NTUC Income Cooperative were honoured to be invited to Islamic Banking & Investment Asia/Middle East Congress 2016 a few months back. 🙂
I received a lot of requests on my Facebook for me to share takeaways and learning points from the 2-day congress – but there was too much to share and I was really busy.
The event by itself, was really awesome! 🙂
……………………………………..
…………………………..
…..
As most of you might have known, I work as a financial consultant that helps Muslim families, plan their finance in a shariah compliant way in Singapore . So being able to interact face to face with industry leaders who champions Islamic Finance in the world is a dream come true for a financial practionioner like me in Singapore.
(My mentees and I)
There are really a lot of learning points, and I will try to share with you one by one… I will also add on my perspective, in the context of myself as a financial consultant helping out with the development of Islamic Finance in Singapore. 🙂
……………………………………….
……………………
……
1) Understand Islamic Finance background
Firstly, let us speak about the status quo as of now. Islamic Finance is 42 years old.
Considering its size of $2 trillion Islamic Finance over $460 trillion conventional finance, Islamic finance is still considered very small.
38 million Muslims touched by Islamic Finance according to Ernst & Young study and about 90 per cent of the Islamic Finance (IF) assets globally sit in six countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.
It was argued during the session that OIC members are not using Islamic Finance extensively. Part of the reason is because laws and regulations of the particular countries are not matured and developed. To their governments, Islamic Finance requires changes in laws, introduction of new things, and that is the main hindrance.
………………………………………………………….
……………………….. Financial Consultant, Helmi Hakim’s Perspective:
I agree that there is an enormous opportunity to grow Islamic Finance further.
The very fact that only 38 million Muslims are touched by Islamic Finance, less than 1% of the global Muslim population, only means that there is a lot of work that needs to be done to educate and empower Muslims itself to undertake Islamic Finance products.
There is a huge opportunity for dakwah and it also means that there is a huge business potential and a relatively untapped market.
There are largely poor countries amongst the OIC countries, and I believe Islamic Finance noble principles and initiatives should be used to uplift the financial standard of the countries through economic and entrepreneurial activities/developments that will benefit the residents at large.
…………………………………………………………..
…………………………
………………………..
2) Islamic Finance Positioning
The experts brought 2 salient points in terms of Islamic Finance positioning.
Firstly, the experts discussed that the brand, “Islam” itself has been a hindrance towards the globalisation of the Islamic finance industry.
A number of Non Muslim countries react rather adversely to that term. Even in China – where people are not averse to Islam but to religion in general – the pitch for Islam becomes difficult. We tend to use the term “Islamic Finance” globally even in places where people are not comfortable with it.
The second salient point is the usage of Arabic terms to all the contracts. In Malaysia, the population do not speak Arabic. However, when we talk about contracts, all the terms are in Arabic. The panel argued that the idea is not feasible in places where the locals cannot even pronounce the terms. In some countries, they don’t have the Arabic alphabet kh-aa and H-aa.
The panel suggested that we should call the terms, as it is. It is participatory by nature. Call it participation banking. Or call it risk sharing.
In addition to that, we should educate everyone that that Islamic Finance is good for all of mankind.
The experts proposed what the industry ought to do is to pitch Islamic Finance as it is and suggested that if syariah compliant instruments went by a religious-neutral name and with less Arabic terms, it would open more interest beyond the Muslim market.
………………………………………………………….
………………………..
………………………. Financial Consultant, Helmi Hakim’s Perspective:
To a certain extent, I agree that we have to be flexible when marketing shariah compliant principles, financial products in the market. To me, the main thing is that the financial products need to be free from riba, maysir and gharar.
When I market shariah compliant financial products to Muslims in Singapore, I educate them how it works with all the Arabic jargons and substantiate them further with Quran and Hadith.
However, when I promote to non-Muslim clients, I use universal noble principles like transparency, putting people before profits, concept of profits and risk sharing etc2, which are consistent with the principles of Islamic Finance.
I educate that Muslims cannot take usury/interest because God told us in the Quran. We believe Quran is God’s words.
For those who never heard about Islamic Finance at all, I skip through all the jargons, and cater my presentation specifically for them using simple examples. The keyword here is know your target market, speak their language and “Be Flexible”! 🙂
………………………….
……………………..
……………..
3) What Islamic Finance Advocates and The Status Quo Now
Islamic Finance has been known as profit and risk sharing.
Nevertheless, the current status quo, in the Islamic Finance world, 90% of the Islamic Finance transactions are of Murabahah or Ijarah, which is predominantly known as Debt Financing.
Only 10% of the Islamic Finance transactions are Musyarakah or Mudarabah (Equity Financing)
The panel discussed that, since Islamic Finance is all about profit and risk sharing, the industry itself should move more towards Musyarakah and Mudarabah.
………………………………
…………
Why are all the financial institutions still advocating Murabahah or Ijarah?
We have to understand that Islamic Finance Institution are subject to the same liquidity capital requirement as conventional counterpart, similar to Basel requirements.
In transactions like Musyarakah, the capital charge is 400% on the Bank’s risk-weighted assets.
Whereas, in Murabahah, the capital charge is only 8% on the Bank’s risk-weighted assets.
Bank Regulatory capital charge is simply the amount of capital that the Banks are required to hold against their assets.
It is understandable that equity financing has more risk, and because its more risky, the capital charges, the capital cost are thus higher than debt financing. It is understandably too expensive to run a Musyarakah, thus most financial institutions will prefer a Murabahah or a Tawarruq.
………………………………………………………….
………………………..
………………………. Financial Consultant, Helmi Hakim’s Perspective:
I understand. Musyarakah and Mudarabah are more reflective of the essence of Islamic Finance. It is more reflective of the nature of risk and profit sharing advocated in Islamic Finance.
Thus, I come out with a 2 throng strategies on how this can be done, over the long term.
……………………………………………………………….
…………………………………………
………………………
Firstly, the Islamic Finance industry that operates itself in markets with predominantly, high percentage of Muslim population should start to focus in developing and promoting shariah compliant instruments that are of Musyarakah and Mudarabah in nature aggressively.
Those countries with lower percentage of Muslim population, can start of with Murabahah, Ijarah or Tawarruq.
Its because, we would not want a situation where you try to promote more of Musyarakah and Mudarabah in countries with lower percentage of Muslim population, they see that it is not feasible, the whole idea of introducing Islamic finance instruments will not even proceed.
Like a Malay proverb says, “yang dikejar tak dapat, yang dikendong keciciran“, which means what you’re running after, you do not get and you lose what you have.
Countries with high percentage of Muslim population, should lead the way. 🙂
………………………………..
………………………….
………………..
The second strategy, to bring more of Musyarakah and Mudarabah is to educate the local population of the benefits of equity financing and at the same time growing their money through investment in equities or participating in commerce activities.
Encourage entrepreneurship, the concept of profit and risk sharing, the concept of doing research before investing your money, the concept of SWOT (Strengths, Weakness, Opportunities, Threats) analysis.
The very concept, we invest our money, when we make profits, we share it 70%:30%, or maybe 60%:40%, instead of regardless, we make profit or loss, I will get a pre-determined rate of return (profit rate) of 10%.
It is because, we do not want Islamic Finance to be seen, just as a replicate of conventional finance with a shariah compliant label on it.
……………………………………………………….
………………………………………….
I hope you learnt from my sharing above and do appreciate if you could share this blog post with your family and friends. Jazakallah Khayran… 🙂
Today’s topic which I will like to share with you is “How To Save Money During The Month Of Ramadan?”
You see, Ramadan taught us Muslims GOOD VALUES like….
1) Peace (Brings you closer to God, thorugh your night prayers, taraweh)
2) Patience (control your hunger from dusk till dawn, break-fast)
3) Empathy (think of how the poor survive without food)
4) Moderation
5) Charity
Yet, we see a lot people in the month or Ramadan splurge instead of saves. Why? Because it is easier to splurge than save. The desire to spend is there.
…and the desire to spend INTENSIFIES when…
…you take a look at the wide choices of buffet advertisement in the papers, with a hungry stomach
….you take a look at the HARI RAYA PROMOTIONS that is going on, especially with no money downpayment needed
…you went to the bazaar and entice with so much, delicious, sweet, colorful, tantalising kuehs, and end up buying more than needed.
I will like to introduce you a simple, yet powerful concept that you can use to avoid OVERSPENDING in this fasting month. The concept is….. 3Rs…
REDUCE,REUSE,RECYCLE
REDUCE wastage
When buying food to break your fast, see for yourself, whether you can finish eating, what you buy.
You do not want to end up throwing away excess food. It is against the spirit of Ramadan.
REUSE and RECYCLE
When you shop for hari raya, differentiate between needs and wants.
Do you need to spend few more thousands for the curtains decorating the windows of you house, or is it okay to REUSE and RECYCLE, the one that you still have?
Do you need to buy with ZERO downpayment needed that very comfortable sofa, to fit in your main hall, or is it okay to just hold on to what you currently have?
I just came back from my holiday trip to Europe a week back, and I received a lot of emails, whatsapp messages, asking me specifically on retirement planning in Singapore. I am still following up, one by one. 🙂
……………………………………….
Since the Rebecca Lim’s fiasco, many of you have asked me on how to calculate how much you need to save today, so that you have enough money to retire comfortably in Singapore, and the best part, how to do it in the shariah compliant way. 🙂
(My mum and dad approaching their retirement years, relaxing at Table Mountain, in South Africa)
………………………………………………………..
……………………………..
……………..
I always share with my clients that how much you need to save today, is dependent on the type of retirement lifestyle that you want to lead when you choose to retire.
You choose whether you want to lead a sedentary lifestyle or a lavish one when you retire, or simply maintain your existing lifestyle.
Many of you, if you have been spending, example, $3000/mth today, you would not want to drastically reduce your spending power to $1000/mth when you retire right? Simply because you are not working and there is no cashflow coming in as before. 🙂
You will want to MAINTAIN your lifestyle.
……………………………………………………………………………….
…………………………………….
Today, I am going to share with you a very simple yet powerful retirement planning concept.
Let say you are 30 years old now. You would like to retire at the age of 60. Mortality age for average Singaporeans is about 90 years old. (Of course, there are people who lives much longer, but we take the age of 90 for this example.)
The period from 30 to 60 years of age is what we call the Accumulation Period.
Whereas from 60 years old to 90, is what we call the Retirement Period.
My question to you is this: When you retire, how much do you want to spend every single month?
If you ignore inflation, and you ignore investment return on your savings, how much exactly do you want to spend every single month?
$3000/mth? $5000/mth? $10,000/mth?
Write Your Answer On A Piece Of Paper: I want to spend $________ every single month when I retire.
Now take a look. Your ACCUMULATION PERIOD is 30 years and your RETIREMENT PERIOD is also 30 years.
Ignoring inflation and investment return, if you want to spend example, $3000/mth, when you retire, you have to also save $3000/mth today, for you to retire.
Right? 🙂
How much you need to save today, is dependent on the type of retirement lifestyle that you want to lead when you choose to retire.
You choose whether you want to lead a sedentary lifestyle or a lavish one when you retire, or simply maintain your existing lifestyle.
……………………………………………………………………………
…………………………………………..
When I share this concept with my clients, most are astounded. It is a very simple, but profound concept that you can use to calculate, how much you need to save now, every month to have the DESIRED retirement lifestyle you can have in the future.
Of course. After you know roughly, how much to save, the next question is how to grow that money, the shariah compliant way in Singapore.
Many of my clients understand that I build a long term advisor-client relationship with them to help them grow their investable assets (go download and read my book, if you don’t know what is investable assets) and at the same time grow their networth the shariah compliant way in Singapore.
……………………………………………………………………………
…………………………………………….
……………
In Singapore, there are a few ways to grow your investable assets, the shariah compliant way.
Firstly, buy shariah compliant stocks, direct from the market. (recommended only if you have the financial knowledge)
For me, this is a good long term strategy to include shariah compliant stocks in your portfolio to grow your money for your retirement.
Have a watchlist of shariah compliant stocks, and start doing your homework.
Download the companies’ annual report. Know how the company makes money. Calculate their profitability, gearing and investment ratios. Analyse deeply the trends, if the gross profit margin, the net profit has increased consistently for the past 10 years.
If the sales has increased, gross profit has increased, net profit has increased over the years, go through the company’s cashflow statement, to check that the company do not just have credit sales (close sales but customers owe them money in credit) , but can also are able collect money (cold, hard cash) from their sales.
There are many fundamental analysis that you should do when analysing and choosing shariah compliant stocks. The above is just 1 example. Learn about them first, before investing your money direct to the stock market. This is important because you would not want yourself to involve with maysir (speculation), when your niat (intention) is already to grow your money the shariah compliant way.
………………………………..
……………. Secondly, buy commodities like physical gold bar.
I see this more of a wealth preservation strategy. In your effort to accumulate your wealth, it is good to diversify and commodities like gold.
However, make sure that you buy gold bar, you can sell immediately to the seller if you urgently need money.
By the way, I wrote a 4000 words report on investing in gold. If you are my existing clients, and you are interested to learn more, you can request it from me (and get advice when you meet me for financial review). 🙂
……………………………….
……………..
Third strategy, which is my favourite strategy is investing your money in shariah compliant funds. This is my favourite strategy because I can do it passively.
I will skip my explanation on what is the difference between shariah compliant fund and conventional ones. What is riba, maysir, gharar. Imam Nawawi Riba rulings etc2…. (If you are interested to learn more, just fix an appointment with me, and I will share more)
…………………………………
…………………….
In this blog post, I will share why investing in equity funds are different that investing in stocks. I will speak in the perspective of making money ONLY. Usually, when my clients plan for their retirement, they will have a long investment time horizon. Perhaps 15-25 years.
The thing about investing in stocks, specifically penny stocks (small caps stocks), the stock price can go up and can go down, and can even go bust.
A professional manage shariah compliant fund works differently. The fund price can go up and it can go down, however, long term wise, it will always go up. Why?
Firstly, inflation. Example, you love drinking coffee. You drink it everyday.
(An “atas” coffee, I made for myself… )
……………………………………………………………………………..
……………………………………..
How much did you pay for your coffee? $1?
Another 10 more years, will your coffee still cost you $1?
Definitely NO, because the price will have increase because of inflation. Similarly, because the price of the coffee increase, when you check the trading, profit and loss statement of the coffee company, the sales will increase, the gross profit will increase, the net profit will increase, everything in the financial statement will increase, thus the stock price and in effect the fund price will also collectively increase.
…………………………………………………..
2nd reason, human population growth. Now, maybe in Asia Pacific, I assume, 10 million people drink coffee everyday. Another 10 years, will the figure remain the same?
Definitely NO.
Due to human population growth, more people will drink coffee. Similarly, because more people drink coffee, when you check the trading, profit and loss statement of the coffee company, the sales will increase, the gross profit will increase, the net profit will increase, everything in the financial statement will increase, thus the stock price and in effect the fund price will also collectively increase.
…………………………………
………..
3rd reason, you have professionals to manage your fund. There is a set of rules (qualitative and quantitative) for fund managers have to follow when selecting stocks specifically when it comes to shariah compliant fund.
One of the examples, if that the gearing ratio cannot be above 30%. Thus diligence is exercised when the fund managers select shariah compliant stocks in the shariah compliant equity fund.
If the stocks does not meet the criterias, and at the same time, are not performing well, it will be removed by the fund manager and replace by a better performing one. That is why shariah compliant fund price, specifically, can go up and down. However, long term wise, it will always go up.
……………………………..
………………..
……….
4thly, specifically for my clients, you have me to rely on, giving you advice when to do a top up, when the fund price is selling cheap. Example, you buy apples today. Price of an apple cost you $1. One day, it drops to $0.99.
$0.95.
And $0.90. What will you do? Just ignore it. You dollar cost average.
However, when the apple price goes down to $0.70, $0.60, financial advisors like me, will ask you to buy more apples, so that when the price goes up back to $0.90, $0.99 or even $1.10, you make more money. You enhance your portfolio returns by so much more. 🙂
………………………………………………………………………..
…………………………………………….
Alright….. I hope you benefit from my sharing. This is a recording of a video (which I recorded 6 years ago) , of a simple way on how to gauge how much money you need to save so that you can retire comfortably in the future.. A simple yet powerful strategy on retirement planning. Watch it now!
P.S. : If you find my sharing beneficial, do share this blog post with your love ones. Insya’Allah… 🙂
P.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.
