Newsletter Exclusive: 5-Week Online Masterclass

Assalamu’alaikum,

“Do you think money grows on trees.”

“Money is dirty.”

“Money should be in your hands, not in your heart.”

Any of the above sound familiar?

Each of us grew up with some narrative or story about Money…and these stories not only shape up our relationship with money but the choices we make around Money.

Consider the story of Aisha and Ahmed; two young working professionals both doing very well for themselves and have a young son. Their retirement accounts are on autopilot from the company they work for, but they don’t have anything saved for their child’s education.

If you ask them: Is your retirement account shariah-compliant? They can’t answer. And if you probe them further and ask them what’s stopping you from taking the initiative to save for your child’s education, they might say: we’re just so busy.

The reality is, for both questions, Aisha and Ahmed are afraid. They are so scared of making a bad choice. And this fear of making a lousy choice may be driven by a “money story” that tells them that “money comes, money goes, so don’t worry about it and as long you have enough in your bank account, don’t stress too much!”.

This money story might be working for them now, but what if it stops working for them? What if it hits them that after years of hard work, that they have been investing in non-shariah compliant funds, and they don’t have enough savings for their child’s education?

I’m not trying to make an example out of Aisha and Ahmed, or the thousands of couples who are perhaps living a similar reality. I understand the pain of having to decide and choose between money options and change financial habits and routines along the way – especially if this whole Money business seems like a black box. And honestly who has time to go through the fine print after a long day at work?

This is why I’ve partnered with Productive Muslim, to tackle this topic once and for all through the  Productive Muslim Money Masterclass. As an expert in Islamic/Ethical personal finance, I will walk you  through a step-by-step process to make faith-based, scientific, money decisions for our life and afterlife. Check out the video below to learn more:

One of the greatest things that you will learn in this course is how you can break through the fear of making money decisions and how to make educated principal choices that will promote your well-being in this life and the next.

Using Prophetic principles as our guide, and the latest personal finance models, we’ll help you build a realistic financial road map for yourself and family for the next 2-5 years at least. 

I hope you can join us soon. To sign up, click the link below:

https://productivemuslim.com/moneymasterclass

Video: Can I claim a tax deduction for paying my zakat?

Lots of people ask me year after year, “I’ve paid my Zakat, is it wrong for me to claim a tax deduction? Am I benefiting from my charity by taking a tax deduction?”

In this video I answer the question “Can I claim a tax deduction for paying my zakat?”

1- How tax liabilities and deductions work.

2- Charitable Deductions.

3- Claiming a tax deduction for your Charity (Sadaqa, Zakat).

 

p.s. Want the shirt? You can get it here: (https://amzn.to/2OrAWke).

Video: Can a Muslim convert inherit from their non-Muslim relative?

In this video I discuss three issues:

1- Can Muslims inherit from non-Muslims? Here I go over the classical opinions on the topic.

2- The difference between a testamentary gift and inheritance. The former being allowed in all cases.

3- The principle of the appropriate preservation of wealth that may go to waste.

 

Addendum (3 Apr 19):

In this video I cover a few issues related to inheritance & testamentary gifts from non-Muslim relatives. Inevitably, I will be asked if this position is normative in Sunni law or not. Let’s talk about that.

Inevitably I will answer “Yes it is” to that question. Usually the retort is “Well I’ve never heard that before!” Well true, you’ve probably never heard *anything* about Islamic probate law either, and probably never studied a basic Fiqh text back to front either.

So here are a few texts from the 4 Sunni schools that point about this:

  • al-Sawi al-Maliki – “Or a kāfir, his testamentary gift is valid so long as he does not gift to a Muslim something like wine (i.e., property which the Muslim may not validly own).”
  • Ibn Qudama al-Hanbali – “It is permitted from a sane adult, sinful or righteous, man or woman, muslim or kafir…”
  • al-Nawawi al-Shafi’i – “The testamentary gift of every legally liable free adult is permitted, even if he is a kafir…” Notice that the phrase “even if” is to reject the idea that doing so is illegitimate.
  • al-Marghinani al-Hanafi – “and it is permitted for a Muslim to leave a testamentary gift to a Kafir, and a Kafir to leave one to a Muslim…”

This is not to be trite, but the border-line neurotic reaction to stating things that are so normative in Sunni law they almost don’t need to be stated explicitly shows the need for more teaching and study in our community, especially from those labeled community workers/leaders.

Photo by rawpixel on Unsplash

Debt vs. Partnership vs. Revenue Sharing: Which One is Best for My Business?

Photo by rawpixel on UnsplashThe mantra of Islamic Finance has been “Islamic Finance prefers partnership over debt.” Hammering this idea into the minds of the masses has resulted in many people using less than optimal structures for their business needs. At times its better to finance through debt, at times through partnership, and at times through revenue sharing. In this short article, I discuss a few of the pros and cons of each and when to use them.

DEBT BASED TRANSACTIONS

Loans at interest are synonymous with Riba, the pre-Islamic practice of charging a premium on a debt, whether that premium is stipulated at contract or on default. Given this prohibition, Muslim jurists encouraged the sale of assets, allowing for long term deferred debts to be created by these sales and the time value of money to be embedded in the value created by the sale. So while debt-based sales are feasible, they are not optimal for all business situations. Almost sole reliance on these contracts by nearly every segment of the Islamic finance industry has resulted in growing debt, greater default, and legal artifice that uses these structures to synthesize a guaranteed interest rate. When are debt-based sales optimal? When you are short on cash for a large purchase that ownership of will boost your business’ ability to grow and profit. Example: equipment for a construction company.

PARTNERSHIPS

With partnerships, there’s several ways they can be structured. I wrote a bit about this for Oxford that you can read here. With partnerships, there are certainly upsides. By pooling financial resources, partners talent, and sharing time to improve the business, partnerships can prove lucrative. Where they falter is when the mission and vision of the partners is misaligned. When this happens, there will naturally be a misalignment in the human capital contributed. So regardless if both of you committed funds, when someone intentionally (or negligently) doesn’t pull their weight, the partnership will experience a downturn and all partners suffer.

There are several other downsides to partnerships, the greatest one being dilution of ownership. In order to bring in capital, owners must valuate their company and solicit investors to purchase shares of that company. Problem is, the capital contributed in exchange for the shares may not be worth the perpetual return that a partnership of any form offers. Why give up 5% of your business FOREVER just for a cash injection? Why invest significantly in a business that won’t give you more than 1% of the business? This is obviously where negotiation comes in, and finding that sweet-spot means creating the market for your offer, beating the best alternative to what you are offering. When are partnerships optimal? When all partners are aligned and your efforts now have a greater net future value than doing anything else.

REVENUE SHARING

Lastly, there are revenue sharing agreements. While there were very common in the pre-modern period, due to it being almost wholly agrarian, they are not as widely used today. Any deal in which an individual receives distributions based on the revenue (i.e. the amount of money the business makes) rather than on the amount of work that was done is a form of revenue sharing. So let’s say you own a car but can’t operate it for profit, so you give it to someone to operate and share 1/3 of the revenue generated. Another example is you inject $1000 into your friend’s business for inventory, and take a little off the top of every sale until you’ve recuperated your capital and a profit.

WHICH ONE DO I CHOOSE

Each of these structures has their pros and cons. Deciding which one to use can make of break your business before it ever turns a profit. Want to discuss which one is best? Let’s talk.

Want to hear about projects I’ve vetted? Sign up to my mailing list and I’ll update you when I have something ready.



Photo by NeONBRAND on Unsplash

Do Less; Earn More – A Non-Profit Example

Ever Wonder Why You Do So Much But Achieve So Little?

Working with a non-profit client this morning, we reviewed their giving policy and services. Because previously the org tried to do *everything* for everyone, they essentially limited the funding they could secure. Why? Because it was that much harder to define exactly what they do and who they serve. Mission creep is a huge issue in non-profits. The assumption is that by doing less you somehow are less. That can’t be further from the truth. Do less, be more, and earn more. It’s all possible.

You Can’t be All Things to All People

Out of fear of losing donors, organizations will serve *all* needs instead of *unmet* needs. They induce paralysis in their donor base. Trying to please everyone and do everything simply won’t work. When faced with too many choices, customers, clients, and donors will make worse decisions or simply walk away. Pare down the decisions to what you are amazing at and what they are looking for, and you have a recipe for success.

When everyone is doing everything, it becomes that much harder for donors to understand where their choices will be the most effective. Let’s say you are a non-profit focused on hunger. You’d think that your mission is pretty simple: find hungry people and feed them. Its easy to get caught up in the ancillary needs of your community or even your target group. Feeding the hungry becomes clothing them, leading to sheltering them, leading to financial assistance, leading to a ton of operational overhead that you don’t need. You’re most probably duplicating other organization’s services, diluting their effectiveness and your own.

Guide Your Clients, Don’t Cower to Them

So if you want to retain dedicated clients/donors, you have to guide their choices so they are most effective. Think of it like a restaurant. Ever go to a restaurant that has a GIANT menu and offers a cornucopia of items, only to actually make one or two things constantly? How did your restaurant get to this point? Someone probably showed up and said “I want fish!” and you attempted to meet that need, then everyone else did the same. Soon after you were serving 100 items but really only making 10. In reality your customers, after scrolling through your ginormous menu, feeling the pressure to choose quickly (so the line isn’t held up), and seeing so many things they’d rather not take a chance on, will pick what’s familiar and easy.

So you’ll make lots of sub-par plates of Biryani, Hamburgers, Shawarma, or similar. Each item will cost you more as well, because your cost of goods to make at any time all those items is too high. You’ll make lots of less than happy customers due to the anxiety related to the process. Make your menu smaller, and your customers will choose faster, your cost of acquisition will be less, and you’ll make more on volume.

Saying No is a Superpower

So what’s our hunger non-profit supposed to do if their clients need clothes? Say no. It’s a superpower. It takes a lot to say no (here’s one of my favorite books on the topic). It takes even more to say no and know how to direct that client or donor’s energy afterwards. So if it was a client being served, you’d either refer them elsewhere, partner with a specialist, or make a pilot program to spin off into another entity. If it was a donor asking to earmark funds for something you don’t do, you’d either refuse, hone your pitch to convince them of your mission, or send them to a referral partner.

So while to most it seems paradoxical, by focusing on the 2-3 core things you are great at, you can devote more time to serving more people, and by extension bring in more money to do so.

Want to discuss your non-profit or business? Hit me up on Clarity and we’ll chat through it.


Giveaway: 7 Rules for Financial Success eBook

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This eBook covers topics including: memorializing your values, investing in yourself, the only secret to making more money, and others.
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Is Every Suicide a Transgression? – Suicide in Islamic Thought Part 4

When is Killing Transgressive?

When is an act of killing considered oppressive or transgressive? Certainly when that the killing is intentional and malicious. Under Islamic law, there are three categories of killing that are crimes that may be sentenced in court:

1. Intentional malicious killing of another person (al-qatl al-ʿamd al-ʿudwān)
2. pseudo-intentional killing (shibh al-ʿamd)
3. Accidental killing (qatl al-khaṭaʾ)

I mention these here not because they are directly related to the topic of suicide, but because the idea of intentionality is core to approximating the status of the person who dies by suicide. More on this later. What’s important here is that all three of these types are related to one discerning, sane adult killing another person. They do not relate to instances of a discerning, sane adult taking their own life or instances of a person of diminished mental capacity taking their own life. The core differentiating factor here is intent. What did the person who died by suicide intend?

Demonstrating Intent

For intent to be demonstrated, certain conditions must be present. When a person exhibits any diminished capacity (they are clinically insane, chronically depressed, or any similar condition that impairs their judgment and sense of self) then their culpability for the act of killing must be abated. What’s that mean? If a person kills another or even themselves when they are not in their right mind, they may not be morally blameworthy for the act, although they would be legally responsible.

In the case of killing another person, they would pay compensation (see details of pseudo-intentional and accidental killing here). In the case when a person kills herself, there would be no compensation or legal effect per se, but understanding their mental state helps us to understand how post-death legalities are carried out (funerals, etc.)

Competing Notions of Suicide in the Hadith Literature

This tweet thread is by no means exhaustive or comprehensive to all of the text related to this topic. But let’s look at two more Hadith on this topic.

In Bukhari, the Prophet said about a man before battle “he is from the people of the fire.” That man then fought valiantly in battle, but was badly injured, then died. Someone said “that person you said was in hell fought valiantly, then died.” He replied “To the fire.”

While people were doubting what was said and wondering about his fate, someone approached and informed that he did not die in battle, but instead had been fatally wounded. Instead of succumbing to his injuries or seeking help, he fell on his sword and killed himself. In another narration he tried to kill himself with an arrow, then used his sword.

This Hadith and those like it, such as the one in Abu Dawud where a man cut his wrists in frustration with his sickness, indicate those who killed themselves did not do so out of desperation or despair, but merely out of frustration, shame, false pride, and righteous indignation that they did not deserve to live with such an injury or sickness, that such was beneath them and they knew better what they deserved.

Contrast this with the Hadith in Muslim of al-Tufayl b. Amr al-Dawsi.

A man from his tribe migrated to Medina, but then fell ill due to the weather. He fell into depression and grief and so one night he took a blade and cut open his knuckles, and bled out until he died. TufayI saw him later in a dream yet he was covering his hands. He said “What did God do with you after you’d gone?” He replied, “He forgave me due to my migrating to the Prophet.” He said “Why are you hiding your hands?” He said “I asked and was told we won’t fix what you damaged.” Tufayl informed the Prophet of this dream and he raised his hands in supplication and said “Lord God, even forgive even his hands.”

This Hadith is cited universally as proof that one that died by suicide is not unequivocally in the hellfire and is additionally deserving of prayer and forgiveness. So even by doing the sin of killing oneself, it doesn’t follow that one is a sinner or committed the sin of killing oneself.

Substantive Differences between the Two

Let’s take a look at some of the substantive differences between this Hadith and the one of the man who threw himself on his sword. In those that mention the phrase “nahar bihi nafsahu” or “qatala bihi nafsahu” there is an indication of false pride and righteous indignation at being afflicted with sickness or injury.

In the Hadith of Al-Tufayl, the phrasing is different: “He fell ill, into depression, then took a blade he had and cut open his knuckles then bled until he died.” The key term here being “hatta maat,” meaning his own death was not directly attributed to him but simply a result of his action. i.e. death was not by active intent, but due to desperation and depression. He did not take his life due to pride or displeasure with God’s will, but instead did something he thought may make his pain subside. Understanding the mindset of the person who is suffering from a particular illness, medical condition, or mental state is key in rehabilitating their condition and helping them improve beyond suicidal thoughts.

This is a key differentiation that many do not take into consideration and because of this they cause considerable pain to both those who have suicidal thoughts as well as those who are left behind after they die by suicide.


Article One: Suicide, God’s Oneness, and Theological Precepts related to suicide.

Article Two: God’s Attributes, The Sin of Killing, & Is Suicide a sin?

Article Three: What Effect Does Sin have on Faith?

Article Four: Is Every Suicide a Transgression? (This Article)

Article Five: Summary and Resources (TBD)

2018 Year in Review – Community Activities Report

Salam Alaikum,

Last December I decided to go on a social media hiatus, allowing myself time to reevaluate my priorities and focus on self-care. Looking back, what I found was that 2018 was a year of both growth & loss, a year of challenge & improvement. By taking time away and allowing myself the ability to look inward, I was able to re-calibrate my mental and emotional state, my physical well-being, and my spiritual health.

As the year closed, I decided to look back and see what I had accomplished over the year and where I could best situate myself vis-à-vis my current activities. Was everything I was doing meaningful? Was it effective? Was it serving myself and others? What did you all think of it? Was my focus on financial engagement in the Muslim community having an effect? Did my promotion of mental health awareness meet the needs of those in need? Were my outreach activities meaningful and transformative?

Essentially this all boils down to one question: How can I improve in 2019?
The answer: create a baseline to measure 2019 with.

So I decided to reach out to you all, to close friends and mentors, and answer these questions. These answers were all compiled into a word document, which I then shared with close friends and advisors for more input, and then gave that to the Studio of Kung Pik Liu to turn all this data and input into a community activity report to distribute to all of you.

Below is the “2018 Community Activities Report”. You’ll need to join my newsletter to read it. It tells you a little about who I am, what I’ve been up to during 2018, what some of my 2019 plans are, and how you can support the work I do. I’ve also included details of the activities I was part of and your testimonials.

Here’s an alternative link as well: 2018 Year in Review – Community Activities Report

Thank you all for your continued support, encouragement, and engagement. I look forward to an active, faith-filled, and engaging 2019.

Enjoy.