Investroo: Invest Without Compromising Your Values

If you’d like to invest in the stock market but feel overwhelmed by the task of sifting through myriad stocks to find one that’s ethically- or Islamically-acceptable, fear not. A new tool is on its way — Investroo.

What is it? Investroo is not another online brokerage like TD Ameritrade or E*Trade. Rather, it’s a mobile application that provides investors with an interface through which to browse ethically-sound stocks on U.S.-based exchanges.

Investroo does the legwork of screening out companies in certain industries (i.e. alcohol, casinos, weapons) and based on financial data (i.e. highly-leveraged firms). The launch version of the app will only display compliant stocks, although a future version will allow users to subscribe to a non-compliant stock and be alerted if/when that stock becomes compliant.

The app will categorize stocks by sector and by social theme, making it easy to find a stock you’d like to invest in. And because it’s app-based, you can invest anytime, anyplace. Trades are expected to be just 99 cents each.

What’s more, the app will enable investors to purchase fractional shares. So if you want to buy stock in, say, a tech company whose stock price is over $100 per share, no worries. Investroo will allow you to purchase a fraction of a share for as little as $5.

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If you’re not quite ready to throw cold, hard cash into the stock market, the app will even feature a simulated trading environment in which you can practice and build a virtual portfolio. Look for Investroo to launch this fall. Sign up for updates at investroo.com.

To learn more about investing in the stock market, check out my e-book The Stock Market Made Simple on Amazon.

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Got Goals?

Goal-setting might seem like a dreaded chore, but not having goals is like driving with no destination in mind. Goals provide direction in life.

When it comes to setting goals, it’s important to be as specific as possible. Vague goals, such as “I want to get in shape,” are not likely to materialize. On the other hand, if you have a very specific goal, like losing 10 lbs., then it’s much easier to identify the individual actions needed to reach that goal.

Furthermore, writing down your goals creates commitment. Having a document you can refer back to regularly will remind you of what you’re working towards. Otherwise, goals will be out of sight, out of mind.

Goal-setting should be taken a step further with deadlines. If you wish to simply accomplish a goal “some day,” that day may never come. By setting a deadline, you will feel a sense of importance and (healthy) pressure and begin taking the actions that lead to the realization of that goal.

Here’s another way to think about it… If you work a normal office job and spend 8-9 hours at the office, don’t you (consciously or subconsciously) spread out your work during that duration? Now, what if you had to get your work done in 4 hours? It would force you to prioritize your tasks and work more efficiently and productively…and it would leave you with more free time to do the things you actually want to do. In essence, create a sense of urgency.

All the best in achieving your goals!

What’s Health Got To Do With Wealth?

It’s a fair question. To me, it boils down to two things:

  1. Staying healthy can help one be more productive in his/her work, with the energy to keep going and the mental sharpness to come up with ideas/solutions.
  2. Having good health allows one to enjoy his/her wealth and all of life’s activities.

If you happen to spend a lot of time sitting in front of a computer for work, whether at home or at an office, below are some tips you can apply right away.

  • Stand up at least once an hour. Stretch your arms and legs, and take a deep breath.
  • Move your eyes away from the computer screen every now and then. Look at something at a further distance than your monitor to let your eye muscles work.
  • Set up your computer/desk/chair ergonomically. Maintain good posture by sitting up straight, keeping your feet flat, and looking straight ahead at the monitor instead of tilting your neck up or down.
  • Try to eat a healthy lunch to avoid the afternoon slump. Keep healthy snacks as well, such as nuts and berries.
  • Drink water instead of sugary drinks. Limit your caffeine intake; green tea will provide a less harsh dose of caffeine than coffee.
  • Take a walk after lunch, preferably outside if weather permits, as you get fresh air and sunlight for Vitamin D production.
  • Use the stairs instead of the elevator for a good leg workout.
  • Park further away to increase your walk to/from the office.
  • If you need to speak with a coworker, walk over to his/her desk instead of e-mailing/calling.
  • While not necessarily related to physical health, avoid negativity and gossip. Positive energy.
  • Maintain good hygiene to avoid the cold/flu. Wash your hands and occasionally clean clean desk.

Give it a shot. Hopefully these tips will help increase your productivity, energy, and quality of life.

Muslim Investor – eBook Series Launched

I’m excited to announce that I just launched a series of bite-sized eBooks. Currently there are three books available:

  • The Stock Market Made Simple: This is the perfect primer for anyone who wants to learn the basics of the stock market and how to get started, not to mention how to analyze stocks and identify halal investments.
  • Let’s Make Some Money: This has ideas for making money on the side and launching a business, such as Fulfillment by Amazon (FBA).
  • Planning for Retirement: This is a guide to retirement planning. It has info on 401(k)s, IRAs, Traditional vs. Roth, etc.

The best part is that each one is only 99 cents and available for immediate download in Kindle format. If you don’t have a Kindle, no problem. Amazon has a free Kindle reading app for many devices.

Check out the series on Amazon.

Fulfillment by Amazon (FBA) as a Business Opportunity

I recently began looking into Fulfillment by Amazon (FBA) as a business opportunity. It sounds like a good way for someone to start a home-based online business while utilizing Amazon’s large customer base and distribution network.

How does it work? One would first choose a product to sell. It should be something you have familiarity or expertise with. If you’re unsure of what to sell, you can look at Amazon bestsellers in a category of your choice. From what I’ve heard, products costing $10 to $50 tend to be ideal choices. Think about what you’d buy online versus what you’d buy at a local store. Lightweight, simple products seem to be a better choice. If you try to sell something high-tech or expensive, it could prove to be more difficult in terms of customer service & satisfaction.

After deciding what you want to sell, you have to find a supplier that can make the product on your behalf with your own branding. One option for finding suppliers is to use a site like alibaba.com and look for Verified/Gold suppliers.

Suppose you want to sell gourmet coffee. You can do a Google search for “private label coffee supplier” or something similar. After interviewing suppliers and choosing one, you’d have to acquire their label template file and design your brand label (or hire someone to design it using a website like fiverr.com). The supplier would then produce the product with your label and ship it directly to Amazon.

Then you need to set up a seller account on Amazon, which does have a monthly fee. Plus, there’s a fee for storing the items in inventory. Amazon would store the product in its warehouse, and ship to customers after they purchase online. Amazon takes care of the grunt work, essentially. For their work, Amazon takes a commission, or cut of the profits. Thus, the product must be priced to account for your cost of manufacturing + Amazon’s profits + your costs for having a seller account.

To market your brand and product, you can use social media and offer free samples to people. You can’t explicitly ask for product reviews in exchange for free samples, but product reviews will help with visibility and ranking on Amazon’s site, and it helps build credibility for your product. Also, be sure to have high-quality photos of your product on Amazon’s selling page, and verbiage that specifies what benefits the customer will receive by purchasing your product.

I have not personally tried Amazon FBA. However, it sounds interesting and I’d like to look into it further. This is just a primer of what it is and what it entails. You can learn more at this link. If you have experience with it, please share your thoughts.

If you’d like to learn about other money-making opportunities and how to invest and build wealth in a halal way, check out my book: Open the Door to a Wealthier Life. It’s available on Amazon and Barnes & Noble.

Charity Does Not Decrease Wealth

In Islam, we believe the charity does not decrease one’s wealth. We also believe that it’s our duty to help our fellow human beings out of the blessings God has bestowed on us. Prophet Muhammad (peace be upon him) stated:

“Charity does not in any way decrease the wealth and the servant who forgives, Allah adds to his respect; and the one who shows humility, Allah elevates him in the estimation (of the people).” (Sahih Muslim)

Hence, I’m proud to announce that half of all royalties from the sale of my book will be donated in charity, insha’Allah.

Halal vs. Haram Investment Choices

Muslims should strive to have earnings that are pure. This means that the money one earns comes from halal sources, without gambling, and without cheating or scamming anyone. Money can’t be earned by working for, or running, a company that provides a forbidden product or service. This would include, for example, alcohol, pornography, and pork, among other things. Additionally, interest, or usury, is prohibited in Islam, so earnings can’t come from giving out loans or interest-based investments.

As far as investing, let’s first look at some examples of what is not considered halal. Bank products are typically not allowed. For example, savings accounts, money market accounts, and certificates of deposit are all interest-based. In short, each of these investment options involves the individual giving money to the bank which the bank turns around and loans out to others. The bank earns its own interest, and gives a small cut of the profits to the individual.

Bonds are not allowed either. This includes both Treasury bonds and corporate bonds. Bonds are basically loans that the investor makes to the government or to a company, and that entity makes an interest, or coupon, payment to the investor.

So what is allowed? Trading stocks is permissible, but you do have to be careful. It’s not allowed to buy stocks for companies that produce products or services forbidden in Islam. Plus, you have to review the company’s leverage, or how much debt it has, as well as the company’s level of liquidity, or how much cash and cash equivalents it holds.

Real estate is also allowed. This can be either as a house that is purchased, fixed up, and sold at a profit; or, a home that is purchased and rented out to others for an income stream.

Sukuk, or Islamic bonds, are another option. I have a separate post that explains what sukuk are.

Additional options include venture capital, or investing in other companies, jewelry and precious metals, as well as fine art and collectibles. If & when those things go up in value, the investor can sell.

A couple of investment choices that I consider gray areas are commodities and foreign exchange. The problem with commodities is that they’re a speculative investment and might take advantage of others’ economic hardships. Also, commodities investing is often done via futures contracts, which I consider to be like gambling. As for foreign currency (or FOREX) trading, it’s not forbidden, but it’s typically done via leverage, or money that’s loaned to the investor by the broker.

This was a very brief overview of investment choices, but to find out more detail, check out my book: Open the Door to a Wealthier Life. It’s available on Amazon in paperback and Kindle format. Thanks for reading.

Islamic Home Financing: How Does it Work?

Have you ever wondered how Islamic home financing options like University Islamic Financial and Guidance Residential work, and how they are different from conventional interest-based mortgages?

First, let’s review how conventional mortgages work. The home buyer takes out a loan with a bank, for instance, and a fixed or adjustable interest rate is applied based on various factors. The monthly mortgage payment is made up of principal, which is the actual cost of the home, and interest. Earlier in the life of the mortgage, interest makes up a greater proportion of the mortgage payment. As the loan progresses, a greater proportion of the loan is principal.

Now let’s look at Islamic home financing.

With University Islamic Financial, or UIF, they buy the home on the individual’s behalf by paying 100% of the purchase price. Then UIF marks up the price and sells it back to the individual who actually wants the home. UIF basically provides an interest-free loan to the homebuyer. It factors in its profit up front and calculates equal monthly payments for the individual to make.

Guidance Residential has a different model called the Declining Balance Co-ownership Program. It’s easier to explain with an example. Suppose someone wants to buy a home that costs $100,000, but only has $20,000 saved up. Basically what happens is that the home buyer enters into a partnership with Guidance. The individual puts down $20K, and Guidance covers the rest. The home is now co-owned by the individual and Guidance, with the individual owning a 20% share of the property and Guidance owning 80%.

Next, the individual begins to pay down the $80K balance that Guidance currently owns. The payments may go through a bank, but the bank simply acts as a bill collector and forwards the payments to Guidance. Over time, the home buyer’s share of the property increases, while Guidance’s share decreases.

For helping the individual purchase the home, Guidance does charge what it calls profit, for use of the property. You can think of this as rent. Guidance owns a chunk of the property, but is allowing the actual homebuyer full use of it.

I hope this helps clarify how Islamic home financing works. To learn more about purchasing a home for personal use or as an investment, along with many other topics related to building wealth in a halal way, check out my book, Open the Door to a Wealthier Life. It’s available on Amazon in paperback and Kindle format. Thanks for reading.

Conventional Bonds vs. Islamic Bonds (Sukuk)

Conventional bonds include corporate bonds sold by corporations and Treasury bonds sold by the government. These are considered debt investments.

Basically, the investor is making a loan to a corporation or the government. The investor will receive a principal payment after the bond matures, or expires, but will also receive regular interest payments during the life of the bond. Because of these interest payments, or coupon payments, conventional bonds are not considered halal, or permissible, investments according to Islam.

There is another option for Muslims, though, called sukuk. Sukuk are sometimes called Islamic bonds. Sukuk are typically sold by foreign governments or companies. As with conventional bonds, these governments and companies sell sukuk to raise capital, promising to pay back the principal amount, but they also pay out small distributions during the life of the sukuk. These aren’t fixed or guaranteed amounts, so technically it’s not an interest payment.

Sukuk are completely asset-backed, and those assets are being used to generate the income that allows for the distribution payments. Additionally, there is shared risk between the entity selling the sukuk and the investor.

Sukuk are considered a capital preservation investment. Sukuk provide a great way to diversify one’s portfolio so you have money invested in something other than the stock market. They won’t have high returns, but are relatively safe and definitely a better option than letting your money sit in the bank and lose value because of inflation. If you are setting aside money for a down payment on something or a college education, sukuk might be the right choice for you.

To learn more about sukuk and how to invest in them, check out my book, Open the Door to a Wealthier Life, available on Amazon in paperback and Kindle format. Thanks for reading.

Open the Door to a Wealthier Life

As-salaam-alaikum and welcome to my blog.

As Muslims, we have restrictions on how we can earn and invest money. It may seem like we are limited in our options, but in reality, the purpose of prohibitions is to keep us from harm. Plus, it actually simplifies things.

If you are looking for halal ways to make money and halal investing opportunities, you’ve come to the right place. I recently completed my book, Open the Door to a Wealthier Life. I not only explain how to get started in investing based on Islamic and ethical principles, but so much more.

What you will learn:

  • How to enhance your skill-set
  • How to maximize your income
  • How to minimize your expenses
  • What investment choices are available
  • Why to even bother investing your money
  • The difference between various investments
  • Which investments are considered halal and which are not
  • How to get started in investing on your own with minimal cash
  • How to finance a home without paying interest
  • How to prepare for retirement

A wealth of information awaits. Are you ready to open the door?

My book is available on Amazon in paperback or Kindle format.

Click here to purchase the paperback version.

Click here to purchase the Kindle version.