A Life Without Bank Accounts (Sort Of)

A Shady Bank

I've been wondering if it's possible to live without the services that banks provide. Why you may ask? Two reasons.

And of their taking usury when they were forbidden it, and of their devouring people's wealth by false pretences, We have prepared for those of them who disbelieve a painful doom. 

 4. Surat An-Nisa (The Women); 161

First, our money is part-taking in things that may not agree to our beliefs or personal stance without our knowledge. I've heard true stories from people who work in bank's credit card unit. Stories of people who are unofficially on payroll from the banks through credit cards. The bank gives a monthly credit limit to these people that becomes like their monthly wage, charge on anything for a month, at the end of the month the card will return to zero balance.Why those people? They're influential or important people who lobby for laws, decision makers and so on. It's probably near impossible to do so in developed countries, but there may be loopholes.

O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba (usury) (from now onward), if you are (really) believers. 

2. Surat Al-Baqarah (The Cow); 278

Second, Ctrl+c, Ctrl+v wikipedia, a bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. That's what's a bank supposed to do and resulting of that is riba. The second reason actually goes back to the first reason as well.

Is it possible? Yes. Both sides, having a bank account and not having one, will cost you.

What's my solution? I still need a bank account since I use it for payroll, but this situation further strengthen my current money management in pulling out remaining cash on account after I do my deed of paying bills and so on.

If I had the option to become underbanked, I would probably choose a prepaid card system with the most transparent and cheapest in fees. I don't know about regulations of prepaid cards, but an article from Forbes explains that deposits on prepaid cards aren't allowed to be lent out. Citing from the article; “Banks make money by taking in deposits and lending them out at higher price. A pre-paid debit card doesn’t allow Walmart to do that.  There’s only one way for Walmart to make money off the pre-paid card and that’s the monthly fee. Meanwhile banks make money in plenty of other ways so it’s unfair to compare them.” 

May Allah help me become successful in my efforts.

Tom Fortino tells you about Finding out who is the best Financial Planner for you

Earning money, saving it, buying a house is all a big effort for you. Wouldn’t you want to ensure that your hard earned money is safe and making your life easier? This is why it is important to choose a good financial planner. It may take time and effort, but then you are talking about trusting somebody with your future plans.

What do you want? 

Before you choose a financial planner, it is essential that you decide exactly what you want.

• Do you want to focus on making your retirement secure
• Are you saving towards a new home
• Do you want to focus more on securing your kids’ education
• Do you want to plan all of the above in one big package

There are financial firms that specialize in one particular planning area, and then there are those who provide everything from planning your taxes to real estate. If you have a narrow focus, such as those mentioned above, then it is better to choose a specialized planner. General financial planning is not as efficient as optimizing one particular area.

Make sure they are professional 

To be clear, a professional is not just a person who has an office and a company name, professional financial advisors go through rigorous training in specialized subjects. They know about their area inside out. There are people who get certified in planning retirements, and others who specialize in taxes.

You can identify good professional planners by the certificates they hold. Before you choose a firm:

• Talk directly to the person who will handle your finances
• Ask for their certificates and learn about what it does
• Make sure that they have planned finances for people who have similar requirements to yours

The financial planning works has plenty of armchair experts who can keep throwing technical terms at you, but won’t be able to tell you how much you will save and earn with your investments and taxes. When it comes to serious financial planning, always stick to the professionals.

How do they benefit:

Some financial planners earn their money solely on the fee that they charge you for their services. Others also make their money by endorsing financial products from certain companies in the form of software and investment plans. In the latter case, there can be serious conflict of interest.

If a person is being paid to sell you a financial product, it is difficult to see why he or she would advise you to go anywhere else. As a result, you may end up with the decisions that are designed, not necessarily to save your money, but to serve the planner’s interests instead.

Conclusion: You choose a financial planner only once or twice over your lifetime. Take your time to research and find out about financial planning in general. Don’t jump the gun on any particular planner and select a planner who has your interests in mind and will help you achieve your financial goals.

Why We Can't Save

Blindly spending - Image from Wired.com

Based on my own experience, the one reason why I don't routinely save is because I didn't plan to save. Once I planned, I started saving though it's not a significant amount but it's still saving. Some people might feel that saving is only for people who are in a privileged position to do so, but that's very far from the truth. Everyone must save. Everyday I pass by beggars and I wonder how they they eat for the day. They save for it. And they probably budget too. They know how much they need to live for the day, and save the money they have for tomorrow.

So, if we feel like we can't save, there's probably an amount that we can save but seems too insignificant. In the end we choose not to save. Or, we actually lack the knowledge of how much we can actually save because, like I did for the past 10+ years I didn't plan to. Budgeting or planning is a duty implicitly mentioned in the Quran.

They ask you about wine and gambling. Say, "In them is great sin and [yet, some] benefit for people. But their sin is greater than their benefit." And they ask you what they should spend. Say, "The excess [beyond needs]." Thus Allah makes clear to you the verses [of revelation] that you might give thought.

2. Surat Al-Baqarah (The Cow; 219)

When people are asking how much they should spend on charity, the answer was "the excess". How much is excess? We wont know if we don't write it out on a piece of paper and break down our spending. Not planning is intentionally blindfolding yourself from your money. And if you blindfold yourself from your money, you are risking of going in circles doing what you've always done with your money. Which was not an ideal situation for me.

Three Rules to Change Your Life

Changing at all.

As my previous blog post mentioned, I've often been plagued with having multiple projects to do and no time to do them. To compound the issue further, I tend to have more dreams and no means to accomplish them. As I get older I realize the time for grand overreaching dreams, while still useful to believe, need to give way to more realistic ambitions and goals.

For many years I've been struggling to improve myself. My ultimate goal is to achieve mastery over myself. The goal is to be no longer be dictated or determined by whims but by conscious action. It's hard to imagine, for myself, such a lofty goal. But I do believe it's there.

So I created 3 criteria to help me choose the correct habits and goals that will hopefully align my life.

1. Whatever habit or goal I choose, it must be easy to follow. This means a clear, concise and consistent routine. Something I can do daily that will become habit.
2. Whatever habit or goal I choose, it must be simple to maintain and to understand. Goals can have multiple levels of complexity and so can projects, but ultimately they must be a simple progression from point A to point B.
3. Finally, the habit or goal must be minimalistic. This represents the idea that any habit or goal cannot add more complexity to my life without allowing me to be creative. Learning to program is inherently a complex undertaking, but it takes creative thinking to manipulate the code into a workable program. Mathematics is inherently a complex subject, but he takes creative thinking see the underlying patterns beneath the surface.

Ultimately these 3 criteria well me determine what is best for my life. Tonight, while I should be in bed resting, I am drafting up a blueprint that will ultimately decide my fate. Alzheimer's runs in my family along with certain forms of cancer. I have pre-hypertension in my pulse hasn't been below 70 in a couple weeks. I'll be the father of the 2nd child within a month and a half. I have many dreams and ambitions I wish to complete, but it will never be able to reach even if I cannot master myself.

Timeful: Time Management for the Stressed

Like many people I struggle with too much to do and too little time. Each day is an epic battle between my dreams and what others require or ask me to do. I am swamped and at times feel like drowning in the depths of all the chaos that dwells behind every corner and lurks behind every email or phone call. 

"Can you do this? Can you take care of that? You need to do this. This is required ASAP!"

Haven't we heard all of this from either family, friends or employers? Each day is a fight. A stress fueled day of endless chaos and struggling to get a head. 

Like many others, I tried to find salvation in my gadgets and gizmos. Omnifocus, Zippy, Reminders, Remember the Milk, GTD, Evernote, Pen and Paper list, I can continue forever with the tweaks and hacks I've tried. Yet. Nothing has worked so far. 

No system, no gimmick, no hack, no rules, nothing. The wireless network went out, which sends me rushing to patch the issue while it destroys my Pomodoro. My son has a cold and I need to monitor his temperature, which knocks out my plan.  I got sick with the same cold, now my daily habits are all gone. I know sleep 8 1/2 hours day which kills my early morning routine.

Just like everyone else, we set out with good dreams and intentions. Yet, life always has something different.

So I decided to try a new app. Timeful. It combines iOS 7 reminders and calendar together. It offers an unique feature which the app will recommend task to do that you haven't scheduled. Its focus isn't on time management but brain management to quote David Kadavy.

I just got accepted into their Beta and I am trying to see how it fits in my life.

From the start, this isn't a project management tool, but could be used with Evernote to coordinate projects. It isn't a cheap gimmick to do list, because it allow scheduling and keeping on top of your events, meetings, and to dos. 

I am looking forward to using this tool more extensively in the next few weeks and will report back the observations.

How to Invest in CD with Proper Knowledge?

The best thing about long term CD investment is that the interest rates are high. Short term strategy will attract even smaller interest rates. A Certificate of Deposit (CD) investment has always been a reserve for the wealthy but things are changing. If you are the type of investor who is future oriented, you will want your investment to earn better interest over time. CDs are good for long term investments and the risks are negligible. In order to ascertain whether or not CD is right for your investment portfolio, you need to look at two distinct factors:

• Time Horizon: As an investor, there are times you are short of cash.  With CD investments, you need to determine when you will cash out. It is recommended that you cash out when the investment has matured, otherwise you will be attracting unnecessary penalties which could be detrimental to your investment strategy.

• Interest Rates: The interest rates can be used as an indicator on just how long you are suppose to keep the money in the CD. If inflation rates are sky rocketing, it is advisable that you go for short term CD. If inflation is falling, long term CDs will be the best option since the interest rates are high.

Before you decide to invest your money in CD, you need to consider:

• Annual percentage rates (APR) - This is rate is usually pegged to the bank that you are buying the CD from. You can have a look at cd rates prophet to compare the rates.

• Annual percentage yield (APY) - This basically shows you the CD potential earnings in multiyear life considering the compounding rates.
Compounding is a mathematical computation process where the interest rates are charged based on the total earnings of a given set period. It could be monthly, quarterly or annually.

Once you have all this knowledge in mind, the next big question is on which term to choose. There are generally two terms. If you are a long term investor, you can go for long term CDs. If you depend on your CD investment, then you can opt for short term.

Having chosen the type of investment that suits you, next step is to assess the rates. This you can do by going through different banks. You can always use the internet to your advantage.

Laddering

This is a risk free strategy that enables you accesses the cash even if inflation rates are soaring high. An example is let’s said you have $30,000. By laddering, you will only be investing $10,000 of the total investable amount. It goes year by year and you will be able to cash out once one part of the investment matures.

With laddering, you do not have to worry about penalties because the system was invented for such eventualities. The interest rates are favorable since it is a long term investment which has been divided into segments. You can always have a chance of even better interest rates if you were to re-invest the profits.

Let's Talk Money

Anything For Money

 Money, good or bad, moves people. When I was young, I did not want to spend my time studying. But when there's money involved, boy did I work hard to push my grades up to Bs and As. One thing for sure though, it's a rather unsustainable motivator. It didn't build any positive habits in the process (for me at least) and a burden for parents to pay up.

 It's a relationship that I don't want to build with my kids, though my wife had promised my daughter a toy of her choice if she can read the Quran and she's almost there. I haven't offered my daughter, seven years old, anything in return for any achievement.  I want her to discover her emotions of being proud of herself and any other positive outcomes from her experiences.

 The relationship that I do want to build on, and what I think every Muslims should, is to talk about money rather bluntly with their kids depending on their level of understanding. A survey done by Visa found that families in Brazil and Mexico (38 and 42 days respectively) spends most time talking about money, Asians are best savers, young people aren't learning about money but Brazilians get an early start at the age of nine. These are very key things that as a parent should do, talk and teach about money and how to save.

“God commands you as regards your children’s (inheritance): to the male, a portion equal to that of two females; if (there are) only daughters, two or more, their share is two-thirds of the inheritance; if only one, her share is a half.  For parents, a sixth share of inheritance to each if the deceased left children; if no children, and the parents are the (only) heirs, the mother has a third; if the deceased left brothers (or sisters), the mother has a sixth.  (The distribution in all cases is) after the payment of legacies he may have bequeathed or debts.  You know not which of them, whether your parents or your children, are nearest to you in benefit; (these fixed shares) are ordained by God.  And God is Ever All-Knower, All-Wise.” 4. Surat An-Nisa (Women; 11)

 The ayat focuses mainly on the distribution of wealth. But underneath, I think highlights an importance in communication of wealth. Most people will find it appalling, offensive or taboo to talk about distribution of wealth after death while still alive, but I think it's a must. Especially since debt can be passed down. Money becomes a family affair. If you choose to take on debt, know that your family might take on it as well if you die in debt.

And, DEBT!