1. Does the stock have consistenly increasing EPS (earnings per share), Sales and Cash Flows?
2. Does it have sustainable competitive advantage?
3. Does the company have future growth drivers in place?
4. Does the company have conservative debt?
5. Does the company have a high & consistent ROE (return on equity) and ROA (return on assets)?
6. Does the company have low CAPEX (capital expenditure) for maintenance of current operations?
7. Is the management of the company holding or buying the stock?
8. Is the stock price selling at a discount?
9. Is the price consolidating or on an uptrend?

Discover how you can invest in stocks, increase your wealth while avoiding RIBA. Download your copy of the bestselling ‘Wealthy Muslims Will Inherit Jannah’ Book NOW!

Over my own course of learning and investing in the stock market I have learned that you must use all of these strategies together to earn significant returns while reducing the risk. For obvious reasons you should start with the easiest first and then move up towards higher risk / bigger rewards.

The strategies are as follows from least risk to highest risk and from least return to highest return;

1. Buying the market
2. Value investing
3. Momentum investing
4. Options trading.

Each of these investing strategies are distinct in their nature and used for specific purposes.

Buying the market

This is the easiest strategy with the least amount of risk and the lowest return (still significantly higher than what you are earning with keeping your money in the bank or under the mattress). You just invest in the S&P 500 index, or buy a fund that tracks the S&P500 index. The easier of the two is to buy units in a fund that tracks the performance of the S&P 500 index. This will ensure you get returns equal to the overall increase of the market. This is a long-term strategy and any investment should be typically made for more than 5 years.

Value investing

This strategy is used by investors like Warren Buffet, where you identify an undervalued company, invest in it for the long term and get a profit based on the increase in the company’s market value. There are specific criteria for identifying undervalued companies that we will discuss in a future post. However because of following the specific criteria, such as the company is a monopoly, or has a monopoly over a product or service, has consistent growth over the past 10 years, has significant future growth potential, is priced below its intrinsic value etc. This strategy typically returns between 15-20% years over year. Investments in this strategy are done for an average of 1 to 5 years.

Discover how you can invest in stocks, increase your wealth while avoiding RIBA. Download your copy of the bestselling book ‘Wealthy Muslims Will Inherit Jannah’ NOW!

Momentum investing

This strategy includes an element of probability analysis based on past performance. This is used by sophisticated investors like George Soros to beat the market when it is going up or down. Just by estimating which direction the market is going to move and buying and selling on that basis. Though often thought of as speculative investing, modern traders have modified this strategy to include value investing through which you can make educated calculative predictions on which direction that market will take a value investment and buy and sell in the short term to earn profits in excess of 25%. This is typically a 3 month to 6 month trading strategy.

Options trading

Options trading is the most complex type of trading on the stock market, with the highest returns. In reality it is neither complex nor risky but it does require higher discipline and specific systems to be in place for you to make a profit. This strategy is used by highly sophisticated investors to earn returns in excess of 100% on their investments in a few days. Options trading involves controlling a vast number of shares based on a small amount of initial investment. (This is a complex trading strategy requires a more detailed explanation which will be dealt with in future posts).

Spend on credit cards and your credit score will improve, you will get more miles that you can use for vacation, the more  you spend on your credit card the bigger discounts you get (the more you spend – the more you save), or the classic ‘some things in life are priceless, for everything else there is_____.’

So for everything that has a price we swiftly take out our card and swipe it.

Here’s the question though, if you are buying a credit card, buying on a credit card, someone is selling the card as well. The company or person selling the credit card must not be doing it out of the goodness of his heart – esp. if it is a company. The company is there to make a profit.

And how does the company make a profit?

By charging you interest on your purchases. Typically 16% to 25% annual percentage rate (APR). This means that anything that you buy today for $100 will actually cost you $125 at the end of the year. I know, I know – you always pay the full balance. So far. The company gives you more credit than you make in a month, but you are a smart consumer so you spend less than you make on your credit card being sure not to exceed your monthly income. So far. The company also promotes gift schemes and points for spending on your card, telling you the more you spend the better rewards you win. This is the only reason you spend on your card – to earn the points. So far.

Think about it for a minute – if everyone pays the complete balance on their credit card, how does the company make money? So logically a percentage of people must not be paying their credit card bills entirely for the credit card company to make any money. This is what determines the high percentage rate on the credit card itself.

The credit card company is giving you the credit because they understand math and probabilities. That’s why they let you keep paying the whole amount of your credit card each month. Because so long as you are spending on your credit card; so long as your credit limit is higher than your monthly earning (which it will always be); so long as you keep collecting points on your card – the credit card company will make a profit.

Are you buried under credit card debt even though you want to avoid riba – Discover the best selling method of reducing your debt 10 Steps to a Clean Slate when you download your copy of the bestselling book ‘Wealthy Muslims Will Inherit Jannah’ NOW. Check out this link!

Because someone will not pay all that they spend on their card; or an emergency purchase will occur on their card; or they will unknowingly exceed their monthly earning and use some of that extra credit. Eventually.

A credit card is a credit for the company – they get the credit for selling you all of this. You buy the debt because you have yet to pay for it from your own money; money that you have yet to earn, yet to receive.

What does this dollar signify to you? What’s it real value.

Did you estimate the power of this $1 to be less than the one dollar – did you think it was just a dollar, or did you understand this was a seed for your million dollar money tree.

Just this one dollar alone is worth a million dollars. I’ll get to that in a bit. Before we do though, let’s assume for a second that whatever we have learned growing up about money is not true. Because we have incorrectly learned the mere basics of money to such a fraction and formed all the rules and thoughts around that money, that whatever we do with it is not correct.

A few realities that we have to accept before we can get to the million dollars.;

1. Taking interest is haram (forbidden by Allah’s decree in the Quran) so we will look at ways and methods which don’t involve haram.
2. Interest, even if we accept that current day interest is not haram, gives us a return of between 0% to 5%
3. The inflation rate on average is 8% year over year.
4. Based on these assumptions even if interest is not haram you lose 3% of your buying power each year just by doing nothing and keeping your money in the bank.
5. As an example if a loaf of bread costs 100 cents today (1$) – and you had 100 cents in the bank. Today if you took all you money out you could buy that loaf of bread.  At the end of the year, the bank would give you 5% interest on your 100 cents so you would have a 105 cents in the bank. However, due to inflation, which is 10%, the loaf of bread would now cost 110 cents. So even if you took out all your money from the bank you would not be able to buy that same loaf of bread that you could buy a year ago.
6. The stock market has given a consistent return of 12% since 1912 (in the USA). This is by merely looking the S&P500 index (the S&P 500 index tracks the stock markets 500 top companies in exactly the proportion in which they are part of the stock market).
7. Most large companies, like Wal-Mart, Nike, Coca Cola etc have been giving a consistent return of 15 – 25%

Now the Magic, we will look at what the $1 can do for us when invested in different places (without looking at the effect of inflation and reinvesting all profits).

Do you dream about making it big in life, making millions while avoiding riba / interest as a muslim. Discover the best selling method of increasing your wealth when you download your copy of the bestselling book ‘Wealthy Muslims Will Inherit Jannah’ NOW. Check out this link!

1. $1 invested today not invested
2. $1 invested today in the bank (giving us a 5% interest)
3. $1 invested today in the S&P 500 (giving us a return of 12%)
4. $1 invested today in a low growth company (giving us a return of 15%)
5. $1 invested today in a medium growth company (giving us a return of 20%)
6. $1 invested today in a high growth company (giving us a return of 25%)

So the simple question is – do you want to leave a legacy of a million dollars when you leave this world or do you just want to tear this dollar up. The choice is entirely yours.

Go ahead, rip this dollar into pieces, or buy a cup of coffee – same difference.

P.S. The above calculation is condensed for this post. If you want to see the actual calculation with yearly figures, return rates and the whole bells and whistles you can download it from here.

P.S.S To learn how you can invest this dollar into a million download your copy of the Wealthy Muslims Will Inherit Jannah ebook.

We hear examples of people squandering their millions on fast cars, huge boats, and fake relationships and consciously we think, ‘I’ll never be like that’ – the brain think ‘I’ll never be rich’. Money-rage is what this gets us on. We are upset with people with money internally and we are upset with money itself. We become defensive when someone talks about money, and we shun people around us who flaunt their money. We look for excuses and errors in the rich. He’s corrupt, he’s a liar, a fake, a cheater, a gambler. And so we aren’t rich and wealth. It appears that these observation are very common, even popular on the TV shows that we watch and apparent in the opinions of our favorite news anchors.

These are however extreme manifestation of wealth; the fast cars, the huge boats and the fake relationships. On the other extreme are the philanthropists, like Bill Gates and Warren Buffet who have donated billions of their own personal money to charitable causes. Of course, we think to ourselves, they can do this because they are billionaires.

What most people feel near the end of their paycheck cycle is ‘being-broke-anxiety’. Each month they are nearing being broke. They know if they don’t get the next paycheck, they won’t be able to pay the mortgage, the car payments, and the credit card bills and will just be plain broke. This causes them much grief and keeps them tied to a job they don’t particularly like. Some people are so high strung on this anxiety that any disruption, even the ordinary, everyday kind (like a flat tire, or a broken glass at home) can send them into a homicidal, unthinking rage. We wonder how these people lose control so quickly and completely, and are comforted knowing that we are more rational, more balanced and better adjusted. Are we, really?

Though most of us are not on a path to self-destruction and committing obscenities when things don’t go our way; thankfully, many of us have serious problems dealing with unexpected events that require an outlay of money, even if a small amount of money. We are a nation of Jones, keeping up with each others material possessions; albeit subconsciously. Our plan is plan B; there is no plan. We rush through our monetary problems as if in a crisis management agency, rushing to take care of one problem before we get to the next. Obviously becoming adept at juggling our money management problems by pushing the thought of money management to the side each time it is mentioned.

Are you buried under debt even though you want to avoid riba – Discover the best selling method of reducing your debt 10 Steps to a Clean Slate when you download your copy of the bestselling book ‘Wealthy Muslims Will Inherit Jannah’ NOW. Check out this link!

Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!

—Lewis Carroll (1832–1898) English author, Through the Looking Glass

Here’s a simple test to see if you are suffering from ‘being-broke-anxiety’. Ask your spouse or a partner or a friend to order anything they want off of Amazon.com without telling them how much it cost, or what they can order. To start the test you give your partner your credit card / debit card and let them order whatever they want for themselves without you peering over the computer screen.

Once they are done – gauge how long it takes you to actually see what they ordered from Amazon and your reaction to it.

Did you jump to see how much it cost? Did you throw a tantrum? Did you cancel the order immediately? Did you overestimate the amount of money they would spend?

If so you’re in the majority.

The solution of escaping ‘being-broke-anxiety’ is simple – don’t be broke. Each month even before you do anything else, put aside 10% of what you earn, if that seems too big, put aside 5%, put aside even a 1$ and you are on you way to becoming a millionaire – escaping the ‘being-broke-anxiety’.

What can 1$ do for you – that’s for another post. Watch this space.

It can be said without doubt that money and it’s managements is an deeply important issue with numerous resources, articles, CDs, workshops etc catering to numerous markets and segments. The increasing number of money management resources and products reflects it’s necessity. The increased number of money management techniques and products reveals how many of us are under pressure with regards to our money. Each day, consciously or unconsciously we make hundreds of decisions regarding money.

Many of us struggle with it and have problems coping with the daily and monthly demands that it puts on us. Why do so many people have so much trouble managing their money? Why is it that people with above average incomes end up living just above bankruptcy? Why is it that people earning above the national averages still end up with little or nothing to show if they are laid off?

When any of us falls ill, we visit the doctor, when we need medicine we visit the pharmacist, when we need our clothes stitched we visit the tailor. When it comes to money we either don’t ask any advise, or we ask of it in the wrong place. We believe that money is not an issue to be discussed, most of us think of it like a hidden disease that we should not talk about and it will go away.

Many of us believe that the solution to the money management problems lies in getting additional jobs, working 2 or three jobs, working over time, or getting a better, higher paying job. We think of getting out of our situation by running faster and pushing our boundaries. Making it our goal to earn more and more, yet as our pay increases our situation remains the same. When we get a pay raise, we come home excited about being free since we now have more money, and then six months later we are back to the same situation; thinking of the next escape in the form of a new job, a new place or a new life.

We end up filling the void in our life by getting more things, buying stuff that we did not want, or that our neighbor / friend sold us on buying. Some people believe that the answer to money management is to consistently keep earning more and more by working harder and longer hours. There is a limit to that though – there are only so many hours in a day. Also, working all the time is great if you don’t have a family, personal aspirations, hobbies or relationships; or need sleep.

But that’s not money management either, atleast it’s not a healthy and sustainable way of managing money.

Do you dream about making it big in life, making millions while avoiding riba / interest as a muslim. Discover the best selling method of increasing your wealth when you download your copy of the bestselling book ‘Wealthy Muslims Will Inherit Jannah’ NOW. Check out this link!

Money management is an expense management and involves defining who you want to be, what you want to do and what things do you want to have. It involves defining your activities in terms of money spent doing them, and finding a realistic way in which to do them.

Having more money than you spend is a fool’s solution – managing your expenses to spend less than you have is the real solution. Having more money than you are able to spend is not the right attitude – spending less money that you have is the real solution.

Think about it.

Following are a few simple rules that will enable you to make the most of your investments without fear of losing your money.

a. Buy a business vs. printed paper
When you invest in the stock market treat it as an investment in the business. Do your due diligence like someone looking to invest in the corner grocery store. Treat each share as your right in the business and your right on the assets and your responsibilities of the debts of the company. Once you start looking at your stock market purchases as definite ownership of business you will start looking at it with global understanding. This is an absolute must to ensure that you treat the business as a business and not take the buying and selling of shares as the business. The buying and selling of shares and treating that as your business will lead you towards loss.

b. Buy what you know vs. what someone tells you
Since you are treating each business as your share in the business invest only in what you know as opposed to investing in products that someone tells you to invest in. This is imperative to help you make clearer, wiser decisions based on your industry knowledge. What someone tells you will usually be based on market sentiment, which is false and exaggerated. It will also be based on heresy and not defined experimentation.

c. Buy when you want to vs. broker recommendations
Similarly, buy what you want to buy. Decide the business you want to be in, that you understand and buy that ignoring your broker’s recommendations. Your broker will recommend fast-moving or climbing shares that may or may not be a good investment decision. So before you go out buying, shop around for the best return on your investment based on the valuation model, what you know of the company and the price of the investment. Buy it only then. Ignore your broker’s recommendations if they don’t fulfill these criteria.

Discover how you can invest in stocks, increase your wealth while avoiding RIBA. Download your copy of the bestselling ‘Wealthy Muslims Will Inherit Jannah’ Book NOW!

d. 10 Trades in a Life Rule vs. ticker watching
As an investment principle make it your life goal to make 10 investments in your life. Most people think that to make money on the stock market you have to keep watching the ticker and a few points up and down on their investment gives them a heart attack. You must think of investing in the stock market as a lifetime investment and stick to the 10 investments in life. Ticker watching will only lead you to financial ruin. When you invest for your lifetime you will look at companies and investment in the stock market thoroughly and make better investment decisions.

e. Discipline vs. folly of the stupid
Once you have decided the company you want to buy, and run the numbers based on the valuation model you have to wait for the price to be at an acceptable level. The market will keep going up and down because that is the natural cycle of the stock market. However if you invest with discipline your investment will keep giving you a constant return regardless of the price of the market. If the market price of your investment goes down due to sentiment, it will come back up based on the underlying fundamentals of the company.

f. Understanding vs. diversification
Investment decisions in the stock market should be based on understanding and not based on “diversification will keep me safe.” This mantra is of people who wish to make a quick buck without proper investigation. Your goal is to invest based on understanding. Once you invest based on understanding diversification will be a hurdle for you. Brokers recommend diversification because it encourages you to do more trades, which is how brokers make money.

g. Price determines return vs. penny stocks
The return you get on an investment is based on the price you pay for it. So if you get a good bargain for $500 and the return on the investment you get is 15% that is much better than buying a stock for 20 cents when the return on it is 2%. So look at the price of the stock you are buying and compare it to the return you can get on it. This should be your guiding principle of investment.

To ensure you get the best deal on your stock market investment. Decide what you want to buy, and then wait for the price match the return you are looking on it.

No matter what your strategy for investing in the stock, you have to devise your own system of investment and then stick to it. This will ensure your success in the long term – alternatively you can download the Wealthy Muslims Wealth Mastery ebook and get the system all ready for you.

Before talking about what is the difference between ‘Traditional Western Mortgage’ and ‘Declining Equity Real Estate Partnership Arrangement’, let’s just get into what exactly these two are so we can continue from there.

Traditional Western Mortgage

In the traditional Western mortgage the interest-rate is the driving factor, the industry rates define the amount of interest that is going to be paid on the principle. Lets look at a few terms that are used in a traditional Western mortgage.

First is the down payment

Second is loaned amount

The third is the interest

So if you get a house for £400,000 and you pay 10% down payment which is £40,000, the remainder of the £360,000 is the loan amount. Assuming that the interest rate on this mortgage is 5% and the mortgage will be paid in 30 years. The monthly payment that is going to be about £1,933. So in total of 30 years the total payments made will be around £695,000 out of which £336,000 will be the interest paid on this home mortgage.

In a traditional mortgage payments are determined based on the interest rate and the annual term. If you change the interest rate the payment will go up or down and if you change the number of years the principle again will change up or down. The problem with this loan mortgage is the bank takes all the rewards and none of the risks.

Declining equity real estate partnership.

This is a term that is used in the islamic banking circles and has been used a lot of muslim halal home mortgage providers. The logic they present is that the loan amount they put up is their portion of the investment in the house.

This seems like a very feasible very reasonable and Islamic method of buying a house which is absolutely correct as long as the following conditions are met:

a. the monthly repayments are not fixed

b. There is no penalty on early termination

c. The rental is not calculated based on interest rates

d. If at any time the mortgage is terminated both the bank and the mortgagee receive equal portions of any gains and losses.

e. There are no late payment surcharges.

f. Rental is calculated based on market rental rates and apportioned according to principal investment in the property.

If the above conditions are met then it is a full form of declining equity real estate partnership method. However, in most cases banks don’t follow these conditions. They usually base their rental income on current interest rates because they are looking for a solid return and are looking for a constant stream of income. Also at the time of termination of the mortgage, if it gets early-terminated, they will recover their own outstanding portion before they will pay out any gains or losses to the mortgagee. Most of this is mentioned in the fine print so people don’t get to read it until they are emotionally vested in the mortgage contract.

Another problem that occurs with the declining equity method based home ownership/partnership as applied by banks is then the repayments are not calculated based on market rental rates. They are in fact calculated based on a fixed interest rate or a variable market interest rate decided at the time of the contract.

As an investment the risks and rewards should be consistently shared between the mortgage and the mortgagee. This principle implies that the rental value of the home should be evaluated after a certain period of time to bring it inline with the current market rental value of the house. An acceptable time duration maybe two years or five years for revaluation of rental amount, which can be agreed between both parties.

Learn an in-depth system to avoid the pitfalls of traditional mortgage – plus receive a viable, accessible, alternative solution for Muslims to own their own home. Click here to learn more.

If you are wondering
✔ how much to save, and how to save it?
✔ how to make a little go far with family obligations?
✔ whether there is a limit on how much wealth you can have in Islam??
✔ how to increase your wealth based on Islamic principles?
✔ how to donate money to charity – rather than spending on a lavish wedding?
or
✔simply how to just manage money?

If these are some of the questions on your mind then keep reading!

Do you dream about
✔ having multiple streams of income
✔ spending in the way of Allah to the extent of hundreds of thousands of dollars
✔ saving yourself from interest in this day and age when everything seems to be interest-based
✔ always being ready to help those of weaker means
✔ going to a charity or a local fundraiser and being able to donate the entire amount needed (for the sake of Allah)
✔ become a wealth model like Khadija (RA), Abu Bakr (RA) and Usman Ghani (RA)

My friend, these are not just dreams – they can become a reality for you if you follow some very simple steps. I’ll tell you what these steps are in a few moments. But first, think about these questions…

✔ Have you ever asked yourself why some Muslims have money and others don’t?
✔ Have you noticed that some Muslims have more money than you but they don’t necessarily earn more than you?
✔ Do you wonder how you can make you money do more for you than just paying bills?
✔ Do you ever get a shock from a lack of money near the end of the month or when you get your credit card bill?

The Experts Do It and They Don’t Tell YOU!

You can read a book, attend a workshop, become a regular at all the seminars you want to, but without this secret your chances of success are highly diminished. Just by implementing this simple secret in your life and following it through with action – you are guaranteed results 7x times faster.

In just a moment I will share with you this principle that all wealthy Muslims are implementing in their lives – making their lives free from financial stress, being able to implement their financial goals better and doing more from their wealth.

Successful Muslims in a long line of Muslims have had a coach…. their ameers, leaders and other prominent people of their tribes would coach each other to attain success.

However, in our day and age finding the right coach, or even finding a coach in the first place is a most difficult job.

Before you go find a coach, here are a few things your coach must possess

*Your Wealth Coach must be a MUSLIM

A non-Muslim will not respect your views and will teach you to invest in interest which is HARAM… as Allah says that He will destroy RIBA.

Non-Muslim Wealth Coaches encourage investment in interest-based and other non-Islamic practices. It is a norm to look for means to increase wealth by investing in speculative investments (which is gambling), or interest based-investments or using techniques which are haram in Islam.

Your wealth coach must not compromise your Aakhira (hereafter) to gain the dunya (this life / world).

*Your Wealth Coach must encourage you to seek Allah’s pleasure

Too often your Wealth Coach will tell you to seek whatever you want and increase your wealth through haram means, like stock market speculation, haram mortgage and investments in fixed interest bonds. But we know as Muslims that our ultimate goal must be Jannah.

* Your Success Coach must encourage obedience to Allah.

Gaining success must not mean that you incur Allah’s wrath. A non-Muslim coach will not know what Allah’s disobedience is. If your Wealth Coach tells you, “Ask that god within you” then that is shirk. Your Muslim Wealth Coach will know the difference between shirk and emaan.

* Your Wealth Coach must be qualified in financial managment

If your Wealth Coach is a generic qualified coach, you will not be able to invest in specialised investments, increase your streams of income or develop an appropriate financial plan with your coach.

Your wealth coach must be a qualified financial professional who knows the ins and outs of business and is able to guide you to the best way to increase your wealth for your purposes.

*Your Wealth Coach must have have the right tools to support you

If your coach is always busy and unable to answer your queries when you need him, it becomes frustrating and your results will be affected.

Before signing up with a Coach make sure that they have the right tools, and are able to support your queries whether they be business related, stocks related or to motivate you in the right direction.

Your coach will…
✔ personally coach you on all the habits that you need to become a wealthy Muslim
✔ develop a system for you that works for you to increase your wealth
✔ enable you to combat negativity and overcome financial stress
✔ equip you with clarity on your personal wealth goals, including charitable goals.
✔ help you reconnect with the core principles of Islam – the principles as adhered to by the Prophet (SAW) and his companions in their business dealings

Normally, having a personal coach who will guide you through the process of creating outstanding wealth for you would cost you an arm and a leg.

Just having an additional stream of income which produces anywhere from £780 to £2,756 per month is reason enough to invest in this program immediately.

And if you had to research the information yourself it could take you years to sift through all the available information and develop your own system of wealth habits.

Wouldn’t you agree that it makes a lot more sense to make your future a riba / interest free, wealthy future following the steps and techniques that are already proven to bring results?

✔ than to fumble and fall around on your own, and waste months experimenting with the wrong information, investing in products that could actually harm your emaan?

If you’ve decided that you are not going to let your time pass by and lose out on your wealth, then your time is NOW!