Book to read - The Richest man in Babylon

I have put up this post in response to the discussion that is currently going on at www.ummah.com/forum with regard to craving wealth, this book is an essential read in understanding wealth creation and also understanding why many will remain poor. Though the book references Babylon and the Jewish community and the author no doubt has links with freemasonry, the lessons are nonetheless essential to learn and a Muslim takes wisdom from wherever he/she finds it, i highly recommend this book for anyone who wants to understand what "rich" is and how to achieve it. I had originally thought i would post the sort of information present in this book in my blog but then changed my mind as these books present it far better than i could here. Instead i will focus on a'maal, the sayings of the Prophet (SAW) regarding wealth, the differences in Muslim wealth creation and other issues such as sharia compliant insurance, finance etc.

Here is the book:
The Richest Man in Babylon

A'maal which have helped me out

Just two years ago I was very dependant on my parents for income, I was brought up in a wealthy home and not realising my parents had spoilt me to the point that i had become weak and needy. Of course I had been studying as well at the time and traditionally in wealthy indian families the parents would support the children while they did this, looking back it would have been better had i been taught independance from a young age and actually this is what the truly rich do, they don't spoil their kids, instead they teach them the rules of wealth and independance, so often we see a child squandering their inheritance away in a very short time only to waste a lifetime of effort, this happens because the child was also spoilt to become weak and needy. Fortunately for myself I decided actively to become independant and set that as a goal for myself, Alhamdulillah Allah guided me to certain a'maal and I believe also to the shouq/desire for reading books on a'maal that attract wealth, and others that teach business, finance and investing. Through this grace of Allah there has been a total change in my life and outlook and i am now actively working towards being able to retire within the next 3 years so that i can spend more time in deeni activities and with my family.

I have found two books very useful on the subject of a'maal and i would recommend to you as well, the first is A'maal e Quraani by Sheikh Ashraf Ali Thanwi (Rahimahullah). I will post the particular a'maal later but i definitely suggest getting this book, it has many other a'maal from the quraan and does not focus on sustenance actually, there is another book: "How to repel poverty" by Mufti Muhammad Shafi Sahib. The information in these books is priceless. If you cannot source them contact me and i will tell you where to get them from.

Wassalam

Still promoting the fed

You would think it would be common knowledge now how the fed brings about booms and busts and parasitically destroys the wealth of all who dont understand it. I am reading the complete idiot's guide to market timing and the author does quite a good job of praising the fed, well take a look at this video and see what you think because i definitely don't agree with his praise:

http://mises.org:88/Fed

its quite an old video but nonetheless essential in understanding the hidden system behind financial matters. Of course i dont agree with their conclusions as to the solution, i would rather understand the system so that i can profit from it and then spend on the upliftment and betterment of those who do not understand and profit from it.

Keys to wealth creation (2)

Anyway, back to wealth creation, it is very simple actually, most people dont realise that due to the very strong influence of western culture and values on our way of life we are actually involved in a process of wealth destruction without even knowing it.

Many of us are neglectful in the A'maal (good actions) which attract sustenance and also those that repel poverty, our expenses go on increasing and we dont attempt to build or buy any assets with the little time, energy and money that remains.

The biggest attractor of wealth is timely performance of Salaat so this is the first thing one should work on, not for wealth but knowing that while attempting to do it for the sake of Allah a side-benefit would be easier sustenance.

In expenses, note that i said control expenses, not reduce them, its easy to reduce ones expenses, but my intention is not to make people misers, rather take a close look at your expenses, your credit card bill, monthly instalments on your new car, your mortgage payments, or maybe you didn't regard these as expenses? this may bring about a paradigm shift because you will have to realise these are expenses, your own home is not an asset, it is a liability that takes out money from your pocket every month, that money is an expense, even if you dont owe anything on the house, there still are expenses, so am i saying get rid of your house?, no, just start looking closely at your expenses. First thing in controlling your expenses is start putting away 10% of your income every month for investing, for buying/building assets, you might say that what you earn is just sufficient to tide you through every month, but you will notice that if you started doing this you would be none the poorer at the end of the month, as soon as you get it, out some away, don't touch it until you are ready to invest it, don't blow it on some impossible dream either, wealth creation is a long term process, nobody gets rich in a get rich scheme besides the schemers.

Then keep your eyes open for assets, things that put money in your pocket.

Can't decide, rent, buy, stay put

Just sharing some thoughts here, i often find it difficult to make decisions and naturally the best thing to do at that time is make istikhaarat or mashwera so this is a bit of mashwera (consultation) and im going to do istikhaara later. I recently moved to Cape Town from Johannesburg and currently living in an apartment that is part of a larger shopping mall development, there is a dentist in the complex who has a fairly large room fro subrental which i thought would be convenient to use for my own private practice (I am an acupuncturist by profession) and also for my medical supplies business, i spoke to the dentist earlier and he is asking 3 times more than i expected, so that has putten me in a fix, before coming i did plan to find a house, purchase it and use for the practice and business as this is an excellent way of getting into the long term benefits of property ownership while at the same time fulfilling my needs for the business and practice which in turn would pay for the property. Thing is that i may be passing up a great opportunity as there is a massive amount of traffic at the mall, thats what goes on in my head often and the other thing is the convenience factor, i just have to walk downstairs to the business and practice. On the other hand though is the fact that a medical practice is not as reliant on location, location, location as other retail businesses are, people tend to seek you out and i have experienced this in joburg where i had patients coming from quite far off, so thats the dilemma, i suppose writing this blog itself helps to clarify it for me, why pay the same in rent as you would if you bought your own place and not suffer any loss in your income anyway, of course it would mean that i wouldnt be able to walk to my business but maybe that will keep me more focused while i am there?

3 keys of wealth

These are the three keys for wealth:-

1) Doing such A'maal which attract sustenance and repel poverty
2) Controlling ones expenses
3) Building/Buying Assets


I wanted to put this here succinctly as they can be expanded upon later. The formula is simple, and i heard once that for complex problems there are simple solutions while for simple problems there are complex solutions. Join me in the coming posts while i go into detail on these three keys, i dont intend going into extreme detail on business practices, stock trading, real estate investing etc. but rather want to detail the "how to get started", the methods and principles and guide you and me both to relevant resources for the rest of the information that is needed once a path is chosen. Remember that the underlying theme here is that it is okay to be rich and the moment you accept this and dont feel guilty about it is the moment your outlook to life, Islam and money will change.

Why you should be rich?

I was reading Virtues of Trade by Shekh Zakariyya (Rahimahullah) and came across the well know hadith that to earn is fardh (i.e compulsory) after all the other fardh obligations (salaat etc.), with the further explanation that it is no longer fardh once a person has an income by which he can pay his/her expenses, through rental property or inheritance for example. On first reading this one would think that the encouragement is towards not becoming wealthy but when you examine it closely and think about the definition of wealthy then you realise it is exactly the definition of wealthy and the acquirement of it that is being encouraged.

One of the greatest benefits of having a passive income that comfortably exceeds ones expenses (i.e being wealthy as per my definition) is that one is able to devote oneself to islamic devotions and actions including such varied things as prayer and other ibaadaat, spending time with family, visiting ones relatives, travelling in the earth and admiring Allahs creation, spending on ones relatives, the needy and on other good causes , taking time to learn deen etc. To do this in any considerable way means one of two things, either that a person has so little expenses that it does not require much time to acquire the necessary income or that a person has enough income to cover his/her average or above average expenses.

Now taking either scenario into account it is important to consider that the income being achieved is not really passive income and the person is working for money instead of having money work fo the individual. We work for money either by having a job or being a solo act, money works for us when we have a business that runs itself and/or we receive income from investments, i.e for example shares, rental properties etc.

So if one were to in addition to working, put aside money to buy/build a business, buy income generating shares and/or purchase other assets that produce passive income a time would come when working/earning would no longer be fardh and you could spend your entire time in ibaadaat or coninue working if you like as it would be your choice and you would have the freedom to do so.

I see so many people around me who are good muslims, working hard day in and day out and the fact is that they cannot continue until death in this manner and sooner or later they or those they leave behind will face difficulties or relying on someone else to pay their expenses. Remember that in Islam we are encouraged to be independant and as much as there is encouragement towards austerity the warnings regarding leaving enough inheritance for ones family and being independant are too often neglected.