MCC does not give financial advice or have a list of financial advisors. Please seek professional consultation.

Please watch the above videos from MCC Board of Trustee Zeeshan Mukhtar. Bay Area community leader Safeer Mohiuddin has also provided tips on the list below (via https://muslim.finance).

 Keys to Financial Peace

1. Decide on a budget and understand where your money is going. Too much focus is placed on investing instead of budgeting/saving.
2. Save 20% of your salary each month.
3. Prioritize eliminating debt vs investing.
4. Contribute to 401K. Most employers match, and there are tax advantages.
5. Set goals for what you need (house, tuition).
6. Invest. See our investment strategy.

 How to Save Subconsciously

1. Create a monthly budget (rent, car payment, etc) and add a buffer for miscellaneous spending.
2. Create a secondary checking account (won’t collect interest and no restrictions on transfers)
3. Split your direct deposit paycheck. The budget goes to the main account and the rest to the other.
4. Pay all expenses from your main account and forget about the other one.
5. Have a big expense or emergency? Borrow from your other account.

Ex. Salary $70K, paycheck after taxes and 401k: $4000

•  Main account: $3000
•  Secondary: $1000

 Keys to Investing

1. Decide your Islamic principles and stick with them.
2. Please keep it simple and to what you know.
3. Long-term rather than short-term.

Few things matter more in investing than understanding your own time horizon and not being persuaded by the price actions caused by people with different time horizons.
– Morgan Housel, The Reasonable Formation of Unreasonable Things (a must short read)

Understanding Money

I recommend reading Morgan Housel’s The Psychology of Money. Understanding the role of one’s behavior toward money and investing is critical.

What should I invest in the stock market?

I’ve made my portfolio public if you want to see what I invest in.
You can invest alongside me. If you do so, please subscribe to my investing newsletter for the latest updates.

My basket of stocks contains:

• QQQ is the top 100 Nasdaq-weighted index of stocks. Nasdaq consists mainly of the top tech companies (such as Amazon, Apple, Google, etc.). I have added the top 65% of QQQ and filtered out the noncompliant stocks (based on Zoya).
• A few handpicked stocks across the technology sector make up the remaining 35%.

Technology stocks have performed well and will continue to perform well in the next few decades. Due to the digital landscape, these companies are fast growing and have much better profit margins.

Additionally, I recommend:

• AMANX – Amana Income is a halal mutual fund that invests in stable, dividend-paying companies.
• AMAGX – Amana Growth invests more aggressively, primarily in tech companies.

If you have a Fidelity 401K, see the 401K section on how you can invest in these there.

Zoya – Find halal stocks

Should I buy individual stocks?

Index and mutual funds have historically performed better than a selected basket of stocks. Investing most of your money in these types of funds is highly recommended.

When should I invest?

There will always be ups and downs—nobody can time the market. I recommend setting up automatic monthly contributions for the majority of your investing budget.

Balancing Investments

Many people focus only on the stock market when thinking about investing. Consider investing in other avenues, such as real estate. Real estate forces you to be long-term, and there are many tax benefits. When evaluating rental homes, prioritize cash flow with some appreciation rather than just appreciation.

Bitcoin

Bitcoin is important in the new digital world because trust in government-backed currencies continues to disappear. The world is struggling with currency devaluation. Buying Bitcoin is a good hedge against inflation for those in the US. How Bitcoin materializes into a currency is still to be determined, but its importance and need couldn’t be stronger. I set up automatic weekly purchases with the Cash App, just like the stock market. Is Bitcoin halal?

401K

A 401K is an account provided by employers for retirement with several benefits and tax advantages. 401ks are directly funded from your paycheck, and many employers match contributions up to a certain threshold (typically 2-5%). Many 401k’s only allow you to choose from a handful of Vanguard funds. If this is the case, pick the most tech-heavy and equity-based fund. This will be the most Sharia-compliant and long-term performance. If you can choose any stocks, see our recommended basket of stocks.

Make sure to contribute the minimum your employer needs to match (it’s free money!). Note there is a contribution limit of $19,500 per year for 2021 (there are exceptions if you are over 50). Is your 401K with Fidelity?

401K: Traditional vs Roth

Education Savings Account (ESA)

ESA accounts allow you to save for your children’s education expenses. Once put in an ESA, money can grow tax-free – no taxes are paid on the gains. Contributions are limited to $2000 per year per child. You are only eligible for an ESA if your AGI (gross income after deductions) is less than $110K for single and $220K for joint filers.

I recommend opening an account with Saturna and investing 50/50 in Amana Income (AMANX) and Amana Growth (AMAGX). Once you have the account, we highly recommend setting up automatic monthly contributions.

Buying a home

• Neeyah*
• UIF
• Guidance
• Ameen Housing

Charity and Zakat

I recommend using CharityVest to streamline your donations. CharityVest also makes it easy to donate stocks, which allows you to deduct the full market value and avoid capital gain taxes if you sell them.

• Zakat Calculator

Wills and Estate Planning

• Islamic Inheritance
• MyWassiyah

Student Loans

• A Continuous Charity

Do you have questions or need advice?

Please email me. Note: I am not a financial advisor. Seek professional consultation as needed.

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*Affiliated with Cordoba Funds, a real estate fund co-managed by the author, Safeer Mohiuddin.
Note: Any investment is speculative.
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