Want to invest in a hotel?

We are currently working on buying this hotel below and are looking for investors to come in on a shareholding basis, the project is fully sharia compliant the hotel is already muslim owned and doesnt serve any liqour, it caters to both muslim and non-muslim and is the only hotel on the famous signal hill in Cape Town, a stones throw from the city, V&A Waterfront and other attractions. We are looking at an initial return of 9% for investors with that set to rise by at least 25% in the first two years and then levelling to 15 to 20% increase after that. The Hotel is set to benefit from the World Cup to be held in SA in 2010 and the general increase in the tourism industry in South Africa, note that for the past two years South Africa has had the highest tourism industry growth in the world and is in fact our biggest industry by percentage. If you are interested let me know, we initially wanted to finance this through the banks but after much pondering we realised our true objective, i.e to create sharia compliant investments that offer a passive income for ourself and our investors, at the same time we donate some of the shares to charitable institutions or individuals such as widows who cannot afford a share but are Islamically deserving and thereby grant them a passive monthly income.

Here is a link to the hotel's website (which we will be revamping once we take over):-

http://www.signalhillodge.com/

Contact me on info@aconite.co.za if you are interested in investing or for more information

Make your business Sharia Compliant

I found this while searching the net and had to put it in my blog, it is a transcript of a talk by Mufti Ebrahim Desai at the Launch of Shari'ah Compliant Business Campaign of Darul Ifta, Madrasah In'aamiyyah, Camperdown, South Africa.


Address - Salaam

Once again, I welcome each and everyone of you Ahlan wa sahlan to the Shari’ah Compliant Business Campaign of the Darul Ifta, Madrasah In’aamiyyah – Camperdown. May Allah Ta’ala accept this gathering and make this campaign a success, Aameen.

Before we proceed any further, it is important to understand, what is a campaign?
According to the Oxford Dictionary, a campaign means, 'a series of battles with one purpose.’ In the context of the Shari’ah Compliant Business Campaign, campaign would mean, a series of battles against those un-Islamic business practices in the business sector with the sole purpose of making those un-Islamic practices Shari’ah compliant.

When a person engages in a battle, he fights his enemy and his success depends upon his determination. The stronger the determination, the greater the success. Rasulullah (Sallallaahu Alayhi Wasallam) said, Niyyatul mu'min khayr min amalihi'The Niyyat (intention) of a believer is better than his actions.’

This is because intention is the stepping stone for a person to perform an act. In a battle, first and foremost, one is faced with the daunted task of identifying his enemy. The person must know who his enemy is in order to fight his enemy. Secondly, after identifying his enemy, he must have firm belief and conviction that his enemy is certainly his enemy. Thirdly, after having conviction in who his enemy is, he must immediately go in the opposite direction of his enemy and fight his enemy.

In the context of the Shari’ah Compliant Business Campaign, first and foremost, we must identify our enemies, 'The un-Islamic practices’ in the business sector.

Secondly, we must believe that each and every un-Islamic practice is our enemy and, thirdly, we should make a firm intention and determination to go in the opposite direction of those un-Islamic practices and address them.

In the remaining part of my speech, I propose to discuss some of the unIslamic practices in our business sector with the Shari’ah alternatives. The points of my speech have been circulated to you and I shall be discussing in that sequence. If time permits I shall discuss all the points, and if not, you may refer to the form circulated to you.
I now proceed with activity number 1 as enlisted in the copy.

Activity 1 - Cheating, Fraud and Lies

As a good omen to our Shari’ah Compliant Business Campaign, and in order to invoke the maximum blessings of Allah, I propose to commence with discussing the Shari’ah Compliant Business Campaign of Hadhrat Shu’ayb (Alayhis salaam) and that is reforming the business malpractice of cheating in weight and measure.
Allah Ta’ala says in the Qur’aan in Surah Hood (Aayat 84)
Allah sent Shu’ayb (Alayhis salaam) to the tribe of Madyan.
Shu’ayb (Alayhis salaam) addressed his nation,
'O my people, worship Allah. There is no one worthy of worship besides Allah. And do not decrease in scale and weight.’
(Presently) I see you are wealthy and prosperous.
I fear upon you an encompassing punishment (if you don’t bring faith and you cheat in weight and measure)
This was certainly a campaign of Shu’ayb (Alayhis salaam) because he faced a series of battles in reforming the business malpractice of cheating in weight and measure. Shu’ayb (Alayhis salaam) was known to perform abundant Nafl Salaat. In his campaign, they threw Salaat on his face saying:
'Oh Shu’ayb (Alayhis salaam)! Your Salaat is ordering us to leave the way of worship of our forefathers and do in our wealth and we wish to.’
Shu’ayb (Alayhis salaam) was determined but nothing would deter Shu’ayb (Alayhis salaam). He was committed and steadfast. When the tribe of Shu’ayb (Alayhis salaam) did not comply with the Shari’ah Compliant Business Campaign of Shu’ayb (Alayhis salaam). Allah Ta’ala punished and destroyed the entire nation.
Hadhrat Abdullah ibn Abbaas (Radhiallaahu Anhu) narrates that Rasulullah (Sallallaahu Alayhi Wasallam) said, 'Those people that cheat in weight and measure will suffer poverty.’
Poverty means to be poor and not having a supply of goods, but there is another angle of poverty and that is, there is a supply of goods but we are unable to obtain it due to the goods being very expensive or there are many restrictions in obtaining the goods. This is clearly visible in our economy. Goods are available but they are expensive or there are many restrictions in obtaining the goods. In order to get something, one has to pass so many boards and red tapes to obtain the goods. This is also poverty and one of the possible reasons for that may be cheating in weight and measure.
In our business practices, cheating in weight and measure takes place in many ways. One example is in re-packaging companies:
A person purchases 10 tons of 10 kg of anything, rice, flour, sugar, etc. He repacks it at 9kg and sell it at 10kg. On each pack, he cheats 1kg and on ten tons he cheats approximately 10,000 kg. If he gains only R1 on each kg, he will earn R10,000 for the extra kgs. That R10,000 will be absolutely Haram.
The alternative is to be truthful and honest. The power and Barakah of being truthful and honest is more powerful than the R10,000. A person may have the R10,000, but Allah will create unwanted avenues of expenses. Somebody in the family may get ill or the person meets an accident and immediately, there are new and unwanted avenues of expenses. The R10,000 and in fact more will be spent in the unwanted avenues of expenses. Remember, 'What comes the bad way, goes away the bad way’.

Activity 2 – To renege on agreements

Allah Ta’ala says in the Qur’aan,
'And fulfill your promises, verily, you will be questioned about your promises.’
If a person makes a promise and his intention is not to fulfil the promise, that is a major sin and a sign of Nifaaq (hypocrisy).
Rasulullah (Sallallaahu Alayhi Wasallam) said, 'There are three signs of a Munaafiq. He speaks lies, he breaks his promises and embezzles.’
One example of reneging on agreements in our business practice is in the Franchise and Partnership Agreement. The Franchisor and franchisee or partners in a partnership agree to be honest and transparent in reflecting the true sales of the business.
Remember, 'What comes the bad way, goes away the bad way.’
The franchisee or the active partner reneges on that and conceals the true sales of the business and that has a bearing on the commission or profit sharing. This is also a form of cheating. The income from the concealed amount will be Haraam for the franchisee or the Active Partner.
Before I proceed to the third activity of our business jargon, I want to share an incident on partnership. Once an old man and a young boy entered into a partnership of grains. There was an agreement that each one will take grains for personal use every alternate day. The old man should not take his share of grains and the young boy did not know that. Similarly, the young boy did not take his share of the grains and the old man did not know that. After some time, the young boy noticed that the heap of grains was the same and it did not decrease, so he approached the old man.
He said what Du’aa or Wazeefa you read that the heap of grains does not decrease. After insisting, the old man said, 'I should not take my share thinking I am old and you are young. You got a long way in life, so I decided to leave my share for you.’ The old man then said, but surely, the heap should have decreased at least half way if you took your share. What Du’aa or Wazeefa you make that the heap did not decrease. After insisting, the young boy said, 'I did not take my share and thought that you are old, you need the grains more than me. I am still young and can work. You don’t have that strength.’ Both partners were considerate and that brought Barakah.
Today, people request for Du’aas and Wazeefas for Barakah. Yet, there is no Barakah. How can there be Barakah if there is no consideration for the next person?
I may also advise, in agreements adopt one policy, 'Deal like strangers and live like brothers.’ Reduce agreements to writing, irrespective who the partner is, father, brother or son. That is more conducive to maintaining the good relationship. Often good relationships are ruined because of us not being clear in our dealings.

Activity 3 - Lies

Allah Ta’ala says in the noble Qur’aan:
'Beware, Allah’s curse is upon the liers’
'La’anah’ means '
(to be far from the mercy of Allah)
There are many examples of speaking lies in the business practice.
One example is presenting a false deposit slip.
1. A trader places an order to the company. The company requires advance payment before releasing the order. The trader presents a false deposit slip. The company thinks the trader has deposited the money in the bank and releases the goods only to realize that he has been tricked. Whatever sales the trader makes on the released order will be Haraam unless he pays the company. The sin of speaking lies still remains until the trader makes Tawbah.
2. Another example of lies is Abuse of the Export incentives. The government offers an incentive of a certain percentage for export. A person will register for export, he goes to the border, bribe the border officials to declare the goods having left the border. The trader then claims the incentive as well as sell the good at a cheaper price. The incentive received is Haraam.
In this practice, there are many evils – one is lies – Allah Ta’ala says, 'Behold, Allah’s curse is upon the liars.’ The second is bribery. Rasulullah (Sallallaahu Alayhi Wasallam) said, 'The giver of bribery and receiver of bribery, both are in the fire.’ The only alternative is to abstain from this practice and have firm belief that what is destined for me will come for me like 'Malakal mawt’ searches for a person destined to die.
It is our belief, 'wal haraam rizq’ (Haraam is also our Rizq). It does not mean we should adopt a Haraam way to earn rizq. This means that if one did not adopt a Haraam way to earn Rizq, he would still get it. One may wonder, how is that possible. If I don’t speak lies, I don’t give bribery, how will I earn the item. That is the weakness of our belief which we should strengthen. I want to share an incident of Hadhrat Ali (Radhiallaahu Anhu) with you.
Once a person requested Hadhrat Ali (Radhiallaahu Anhu) for a horse. He replied, 'I do not have a horse. When I get one will give it to you.’ When Hadhrat Ali (Radhiallaahu Anhu) got a horse, he sent his slave to deliver the horse to the person. On the way, the slave tied the horse and took a rest. The person who requested Hadhrat Ali (Radhiallaahu Anhu) for the horse and to whom the horse was being delivered, untied the horse and stole it. When Hadhrat Ali (Radhiallaahu Anhu) found out that the person for whom the horse was meant stole the horse, he said, 'How foolish is the person. Had he not stolen the horse, he would have still got the horse.’ We need to build our Yaqeen on this point.
Many people don’t regard speaking lies in business activities as a crime and sin. How can we expect the Barakah and mercy of Allah in our business when we are engaged in wholesale lies in our business?

Activity 4 – Interest

Everyone of us know that interest is expressly and explicitly Haraam. Imaam Abu Hanifa (RA) said the most severe warning given to Muslims in the Qur’aan is regarding interest. Punishment which will be meted out to Kuffaar will be meted out to Muslims engaged in interest.
Allah declares war against such a person. How can such a person survive. Allah granted us the dignity and honour of freedom, but we chose disgrace by being slaves. There are two forms of slavery, one is tangible slavery and the other intangible slavery. The tangible slavery is when the master owns a physical slave. An intangible slavery is not physical slavery but mental slavery. When a person takes an OD and pays interest, he has subjected himself to being the mental slave of his creditor. This is the worst form of slavery. Your physical self is not handed over but the most honourable part of yourself, your peace and brains is handed over to your creditor.
Apart from the conventional interest bearing transactions, one is Administration cost on OD. A person takes out an OD to service his clients of 30, 60 90 days and he charges them administration costs on the OD he had taken. According to Shari’ah, this is clear cut interest and Haraam. The solution is simple. Service your clients according to your financial ability. Do not feel ashamed to say a person 'No’ if you cannot service him. Changing the terminology does not make the deal permissible.

Fifth Activity – Consumer Credit

The general practice of consumer credit where the Consumer Credit Company pays the Trader out and the consumer then pays the CCC with an excess amount which is interest. The alternative for that is, for example, I purchase an item from you (the trader) for R300 and cannot pay in one instalment. The CCC will pay you the full R300 and I pay the CCC R100 in three instalments – interest free. However, the CCC and you (the trader) may also enter into an agreement for the CCC to promote your business for a fee. All this, to pay the consumer and service the trader may be done in one transaction.
This is similar to the Consumer Credit Card practise.

Activity Six – Insurance

All conventional insurance schemes have elements of interest and gambling in them and not permissible.
Businessmen engaged in export are required to insure the exported goods. The alternative to that is to opt for FOB (Freight on Board). If the importer is a non-Muslim, he will be responsible for the insurance. The Muslim businessman will be relieved from the burden of insurance.

Seventh Activity – Taking wealth by Coercion

Allah Ta’ala says in the Qur’aan,
'O you who believe! Do not eat one another’s wealth in an invalid way but that it be through with mutual happiness.’
One common practice of taking wealth by coercion is short exchanging.
Example: I owe you R10,000. You are desperate for the money and approach me. I offer you R5000 as full settlement. Out of desperation, you accept that and I gain R5,000. This practice of short exchanging is taking wealth by coercion and Haraam I should not expect to gain Barakah in that R5000

Activity Eight – Handling Charges

According to the Shari’ah – Iqaalah – dissolution in Transaction is encouraged.
Rasulullah (Sallallaahu Alayhi Wasallam) said,
'That person who dissolves a transaction with a person who regrets a purchase, Allah will dissolve the person’s sins on the day of Qiyaamat.’
To accept a dissolution in transaction is the right of the trader. It is also his prerogative to refuse, but if he makes Iqaalah, he will be rewarded. However, when the purchased item is returned, the trader must return the full amount to the purchaser. He cannot retain any amount as handling charges. As an alternative, the purchaser may repurchase the item with a higher price like any other consumer.

Activity Nine – Purchase on Credit

Before I explain this, I wish to explain a principle: When a person enters into a transaction and there is a possibility of a contention, that transaction is invalid. Allah Ta’ala says, 'And do not dispute.’ Any transaction that leads to dispute is prohibited.
One common practice is – a person sends an order note for purchase but the terms of payment is not stipulated. That is Haraam as it may lead to a dispute. Another branch of that is the cabbage lot in the CMT (Cut, Make and Trim) practice.
The clothing factory gives material to the tailor and order 100 garments. The tailor makes 110 garments and keeps 10 for himself. That may lead to a dispute between the factory and the tailor. Therefore, the agreement regarding the cabbage lot must also be specified.

Activity Ten – Violating Gazzetted Tariffs

In principle, a Muslim residing in a non-Muslim country is bound by the rules of the government if the rules are not un-Islamic.
Members of certain professions are bound by gazetted tariffs and according to Shari’ah, they must abide by that. Besides that violating the law of the country is a crime. If a person is convicted, it is an embarrassment. Rasulullah (Sallallaahu Alayhi Wasallam) said,
'It does not behove a believer to put himself in a disgraceful situation.’
The Darul Ifta is presently researching alternatives for Forward Cover, Asset Financing and Foreign Exchanges. Insha Allah, we shall inform the public of our research once we reach finality on these issues.

The Darul Ifta of Madrasah In'aamiyah Camperdown can be reached at http://www.alinaam.org.za/

Do you live in a world of scarcity?

I did, but I have now realised that we actually live in a world of abundance.

This paradigm shift is simple but essential. If you think resources are scarce and hard to find (including money) then your thoughts will clothe themselves in their reality, you will see a world of scarcity, you will be afraid that someone is going to "steal your idea" or get the opportunities before you can. If you come from an Asian background like myself then you probably have some idea of what it is like to live in a densely populated area, where everyone seems to be fighting for "limited" resources or wealth. I was born in South Africa and grew up here just like my parents and their parents as well, yet the mindset still carried through even though the hectic marketplaces of India or another Asian city are rarely experienced here. So is wealth really scarce? No it isn't, there is enough to go around, in fact it is even mentioned in Hadith that a time will come when you will not find someone to give your charity to. Until you cannot experience this paradigm shift and realise the vastness of Allah's bounties jealousy cannot be eradicated, it is only human to desire the luxuries of this life and may Allah grant us the luxuries of both the worlds, Ameen, but in so desiring while believing that such luxuries are scarce jealousy is born, competition, rivalry and the like follow.

Just imagine now that your mindset changed to the mindset of abundance, who would you be jealous of? who could be jealous of you? anyone can have what they wanted, riches beyond measure because Allah's treasures are unlimited.

And to think I learnt this lesson from someone who is not even Muslim! When I started reading books on wealth and wealth creation and exposing myself to property websites etc I was surprised and to a certain extent dumbfounded by the nature of the individuals involved, they would share all their secrets of wealth creation without a hint of that common voice "they will steal your idea". I was suspicious at times, echoing the sentiments of the cynics who say "if it is so easy why don't they do it themselves, they are just making money off the books and seminars" but when you look into it, they are actually doing what they are saying (at least those who I am familiar with), the real reason they share is because they know that there is so much to go around it is not going to take anything away from them and there is so much to go around that they couldn't possibly take it all themselves anyway.

I invite you to enter the world of abundance, abundance of wealth, abundance of happiness, abundance of good, abundance of opportunity, abundance of whatever you desire. If you believe in abundance, you will see the world changing around you.

Business - Raising capital - videos from planHQ

I use planhq.com for my business planning and found it to be an excellent tool, was on their blog today and found these great videos on raising capital, essential to know if you want to get rich.

Part one takes you from the groundwork you need to do BEFORE starting discussions, through to the introduction and how to gain initial trust


Part two walks you through doing the deal, from convincing investors this will be a mutually beneficial relationship, through to negotiating the deal and avoiding 11th hour surprises.






Part three explains some common and easily fixed ‘things to avoid’.

ISLAM - Will help rid the world of poverty

May Allah forgive me for not spending enough in His path and may Allah give me the ability to spend much more.Ameen. This video and others like it really make me feel guilty about the life of ease I live, I wish i could help so much that it makes a difference, I live in one of the most disparate countries in the world when it comes to wealth, just a stones throw from an area filled with millionaires you can find dire poverty, As a Muslim it is unacceptable that a neighbour can go hungry while we have food on the table, may Allah make me realise this and help me fulfill my goal of becoming the best muslim philanthropist of our time and may Allah make us all realise that we have to start now.

Expectations, desire and the power of thought

I am currently reading Think and Grow Rich: The Landmark Bestseller--Now Revised and Updated for the 21st Century, the book is centered on the fact that thoughts translate into reality as it is the thoughts that come first, the book does discuss a lot of other concepts that go with this in order to "transmute" thoughts into reality.

I found this discussion very much related to the hadith qudsi which goes to the effect that Allah treats a person according to the person's expectations from Him. This is very much related to yaqeen and Imaan. Napoleon Hill also mentions such states as essential for success in his book, i.e. having "faith" that one's desires and plan to achieve them will result in fruition.

As a Muslim there is a state of mind or rather heart referred to as ihtisaab, which means roughly to do an action with complete conviction that whatever is promised for doing it will be granted by Allah Subhanahu Wa Ta'aala. This ties in with having good expectations from Allah, couple that with the a'maal that has been given to us through our Prophet (SAW) and we have a sure recipe for achieving wealth and success. As an example it is related in ahadith that whoever recites Surah Waqiah in the evening will never be afflicted by poverty, this is so powerful we don't even realise, the fear of poverty is a major stumbling block in achieving success, so many people dwell on this fear and live with a poverty mindset that it then becomes their fate. By acting on this amal with ihtisaab, i.e the conviction that what Allah has promised will come to pass ones fear of poverty can be totally eradicated and one can develop a mindset away from poverty which then because if one's expectations from Allah will transmute into reality, Alhamdulillah I myself have realised the wonderful effect of reciting Surah Waaqi'ah every evening, besides the barakah I have seen in my wealth I have absolute conviction that as long as Allah grants me taufeeq to continue this practice I will never be afflicted by poverty. Allahs promise is never broken.

With regard to he book itself i would caution readers not to take the chapter on sex and its relation to success too seriously, i can see where the author is coming from with regards to the powerful emotions associated with it though i would rather take the lessons that he describes regarding how many have become unsuccessful because of their overindulgence in it in wrongful and harmful ways. As a practitioner of Acupuncture and Chinese Medicine it is interesting to note though that overindulgence in intercourse does lead to a weak mind and willpower both of which are essential for the achievement of one's goal and purpose in life. The rest of the book presents a concept not easy to pick up if one is reading such books for the first time, in fact as a primer to this book i would read this book first;

The author is a fellow South African, not that i am really nationalistic, he one of the best motivational speakers in the world at the moment and I have to say his book really inspires me to break my mental barriers and push myself to achieve what otherwise i wouldn't even have dreamt of achieving, he has many Muslim friends who no doubt have had some influence on his thinking as well.

Bottom line is thoughts are important, yes, they do tend to transmute into their reality, napoleon says it nicely: "Thoughts have a tendency to clothe themselves in their physical reality", really powerful, negative thoughts bring about negative consequences, positive thoughts bring about positive consequences,

Its interesting also that when Shaytaan will be blamed by his followers on the day of judgment he will reply that he is not at fault as he only whispered the thought in the heart of the wrongdoer. I'm sure now you can see how powerful thoughts are, may Allah guide us to fill our minds with thoughts of khair and goodness and protect us from evil thoughts. Ameen.

Lets work the numbers - Ponte

I said before that I prefer to invest for cashflow when looking at properties. Property is an easy way to get rich at medium speed but its important that the numbers should be right, every property should be looked at as you would a business and when doing so there are some very important things to consider:-

1. Will the business/property give me a profit/money in my pocket from day one?
2. If not how long will it take to reach breakeven point?
3. Do I have enough extra funds to carry the business/property until it reaches that point (where it can pay itself)?
4. In the case of property - is it in an area where i can expect a good rental demand for the property?
5. what are the long term prospects for the property/business?

With regard to the ponte property it will not be profitable from day one when looking at the apparent numbers, the unit i booked costs 750 000 (I'm not saying what currency), the rental expected is approximately 7750, the levy will be about 800 and if i get it fully financed the instalment will be approximately 8200, lets look at that more clearly:-

Rental income from the unit: 7750

levies: -800

Instalment: -8200

Shortfall: =-1250

which is equivalent to 15 000 for the year, so why in my right mind would i take this property, well for one, if i were young which i am i suppose i could fund the shortfall from my other businesses but there is another reason, because the building falls in the urban development zone i can get an accelerated depreciation on this building of 20% of the refurbishment cost (1/3 the price) in the first year and 5% for every year thereafter for 17 years, that would in effect reduce my personal income tax bill as follows:-

1/3 of 750 000 = 250 000

20% of 250 000 = 50 000

considering a tax rate of 35% = saving of 17 500 less the original shortfall of 15 000 leaves me with a positive cashflow of 2500 in the first year.

in the second year my yearly shortfall (with a 10% rental increase) would be -6768 and the tax saving 5% of 250 000 = 12 500 * 35% = 4375 which leaves me with a shortfall of -2393 less the 2500 of the previous year = 107

What this essentially means and why i prefer cash flow positive properties is that they pay themselves.

Creating wealth through property is the easiest and most assured way of becoming rich and financially free, just make sure the numbers are right and your financing is halaal. Some people say they would rather pay cash and i would say to such people that it is okay to pay cash but then you lose out on leverage, if you had the cash why not put down 10% deposit on 10 of these properties and secure yourself an income for the future, as Muslims yes we should be ready for death should it come any moment but that definitely does not mean we should not prepare for the financial safety of ourselves and our families should we live to see it or worse leave nothing behind for them when we leave. One category of martyr in Islam is he who passes away while striving in pursuit of halal sustenance so that his family does not have to ask from others.

May Allah assist us and guide us. Ameen.

(I share this in the hope that others and myself will learn the important lessons of wealth creation and Islam's view on it that we rarely learn elsewhere)