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Discover my halal investment approach for those in their 20s starting with just $1000. I've got some unique takes considering we're Muslim out here!
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If you're a Muslim man in your 20s and you know you need to be investing from early
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then this video is for you. I'm not too far out of my 20s myself, but I'm going to show you
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exactly what I would do if I was still there. I'm talking about specific percentages, proportions
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everything you need to know to get started right now. And this is going to be eye-opening
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especially because I'm coming at it from a Muslim's perspective. And by the way
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Salaam Alaikum, I'm Amin, an internet business guide, coach and author, who wrote the book
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on Islamic masculinity, The Shepherd's Way. And I'm based here in Istanbul. So the first thing
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we need to think about is our whole approach to investing, because this is going to impact
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everything that happens afterwards. And it's going to depend on a lot of different factors
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but the main thing I'm going to talk about here is your risk appetite, how willing are you to
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be risky and therefore get bigger gains as well. And number two, what you actually believe about
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the world, because what you believe about the world and about reality will actually impact
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how you invest. And I'll show you the details of that as we go. So when it comes to risk
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while you're in your 20s, you're very early in your investing journey and therefore you can afford
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any losses, any loss of gains that happen along the way. So that means your risk for appetite
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should definitely be higher. Now, how high you want to go, it depends on you, on your situation
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your stability, your career, stuff like that. But generally you want to edge towards the higher
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risk side because any money that you lose now, inshallah you've got your whole life to make up
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for it, if Allah gives you that time to make up for it. This means we're going to invest a little bit less in the low risk stuff like gold, like silver, like sukook or bonds and move to more
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high risk stuff like maybe crypto, maybe some stocks, maybe investing in starting your own
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business. When it comes to being a Muslim investor specifically and actually believing in what Allah
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tells us about the reality of the world, that is going to have a huge impact on how we invest and
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it's going to help us so much inshallah. Because for example, we know from Allah and his Prophet
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sallallahu alayhi wa sallam specifically that charity is the best investment you can make
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You're investing in the next life and it's got a guaranteed return. Allah will multiply the money
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that you give in his cause and so charity is something that we should see as an investment
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and inshallah that will actually encourage us to give more and more in charity because it's an
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investment and because we believe this is the right thing to do with the money that Allah gave
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us in the end. We didn't get it, Allah got it for us. Also another part of being a Muslim investor
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is investing in your own development and your own training and education because if we have the
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right intention that I'm bettering myself for my family, for building my wealth, for building that
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wealth to help the ummah, we have all these good intentions behind it then we expect Allah to reward
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us for that as well. So when we're putting a certain amount of our investment portfolio in
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our own development then we see that truly as an investment in rewards and no doubt, no doubt, no
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doubt it will bring huge financial rewards for you as well. And likewise we're always going to look
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into the stuff we're investing in because we want to avoid any sign of any haram in our money that
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we're making, that we're feeding ourselves with, that we're feeding our wives with, our kids with, we want
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to avoid that completely. And then when we do that hard work over the research and making sure that
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it's halal, we expect reward from Allah and we expect there to be more barakah in the money that
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we actually do make. And this is another key point for Muslim investors out there that we don't just
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look at the quantity of money, we look at the quality of money and how do we kind of measure
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the quality of money, right? We just see numbers in a bank account, one pound is one pound surely, no
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it's not. Because a thousand pounds or dollars that have no barakah or low barakah in it, it could end
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up getting wasted, lost or spent in a way that causes us to get further away from Allah and maybe
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sin. But money that has a lot of barakah in it will go a very long way and it will give us more than
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expected and bring us closer to Allah. So these are some of the signs of how we can tell if money
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has barakah in it or it doesn't. And we should always be aiming to have more and more and more
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barakah in it because it's just more efficient. And later in the video I'll get into some of the
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haram halal decisions I've made in investing. But our overall approach and mindset when it comes to
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investing is very important so that's why I wanted to cover that first. So our approach is that because
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we're younger we're taking a bit more risk and also because we're Muslim we're going to be focused
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on definitely always having charity in our portfolio, investing with the right intentions
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and looking for money that has barakah in it. All right so now let's get into the exact numbers and
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the meat and potatoes that I know you're looking for. So the way I would do it is mostly by percentage
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of income. The more I earn the more I'm going to put into that, the less I earn it will get reduced
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in the same way. I just set it as a percentage. So out of the total money that comes in every month
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I would put 10% of that towards savings. Just build up some savings. First you want an emergency
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savings so it's like about a thousand dollars a thousand pounds, your car breaks down, you need
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some furniture, you need something, somebody has a medical bill, you've got some money set aside for
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that. You want to save that away first. After that's there then you just want to put aside again the 10
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and keep building that up until you've got a few months of expenses there because you never know
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what's going to happen. Next I would put another 10% of my income aside for investing for what we
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would call traditional investing like put it into certain investments that I expect would bring me
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money back. And then another 10% I would put towards charity. I'm gonna say Allah gave me 100
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of this money, I'm definitely giving 10% of that away for the cause of Allah. And then finally in
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terms of investing I would put another 10% aside for my learning and development. So we've got
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40% that we've actually allocated for investing in different ways. But now look this might seem a
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bit idealistic you're thinking 40% how could I possibly put that aside and then live off 60%
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Well let's do a bit of reality check to see if we're on the right lines or not. So let's say I'm
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25, I'm earning like a decent amount like maybe £35,000 a year and after taxes that's going to
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end up being £2,533 per month. Okay now let's take away that 40% that we're going to invest
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and we're left with 60% which ends up being about £1,500 which is what we've got left to live on
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Of course it might be a little bit tight especially at this stage in life where you're not earning as
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much as you would like. But ultimately it depends where you live, how expensive rent is and stuff
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like that. Especially if you're living with your parents or you're sharing or something like that
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you could definitely make this happen. But ultimately it just depends kind of on your
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situation. Like I looked at a medium priced city like Birmingham in the UK and it said you need
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about £2,000 to live on per month there as a minimum. But they were including a lot of things
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that we don't necessarily need. Therefore we might be able to make this £1,500 work. And you've got
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to keep in mind that we're investing now in the early days to make the later days easier. And so
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if your wife you know is not really on board with this, she's struggling with it or if you're getting
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married and you're telling her straight up front like look I invest a lot of money and that's not
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so we live uncomfortably today, it's so we live okay today but in the future things will be very
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very good and this is the wise thing to do for you, for our family, for our kids, for everyone. So yeah
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living on 60% of your income if it is possible then definitely make that happen. If it's a little
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bit difficult still make it happen. And if it seems really impossible then of course some of those 10
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we can turn them into 5%. But the charity one I want you to really stick to that and make sure that
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10% of your income is going to charity. But straight away it's amazing you're now investing
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and you're investing a good chunk of your money and this is going to definitely play out well for
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you in the medium and long term. While most people are not investing in their 20s, you're investing
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in your stability by giving 10% to saving. You're investing in the air and even your financial
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stability as well by putting 10% to charity. You're investing in your development so you can
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make more money in the future so you can become an asset to the ummah in the future by putting 10
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to your development, your education, your training and of course you're putting that last 10% into
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what people would call traditional investments. But the question is what are those traditional
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investments? What would I do for that 10% that portion? Okay so this is how I personally would
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split that 10% off. I would put 10% of it in gold or silver, about 30% in bitcoin and then I would put
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the remaining 60% in some sort of real estate vehicle. Whether it's crowdsourced, whether
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someone has a rent to rent opportunity or if you really just have to save up a little bit to then
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go in with other investors on a property with say five or ten thousand pounds. And let me break down
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why I'm doing this. So the 10% that goes to gold or silver, this is just so that I have something
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that is not affected by inflation and it's just preserving that bit of wealth so it's a little bit
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like savings as well. And it's something that I can physically hold that people cannot take away
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from me. The bank can't lock me out, the crypto exchange can't take that away from me or I lose
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my key or whatever it is. I've got that physically with me and it's 10% it's a small amount. Now
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bitcoin of course it has a lot of volatility in it. It is one of those higher risk things and we're
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young so we're doing that kind of thing. It also has potential for huge upside and at the same time
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to be honest with you there are very few investments that I found to be accessible to most
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people and that's also why this is here as well. And then finally the real estate side of things
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This is something that's not so high risk it's more medium risk and it has a good opportunity to make
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you some good money in the medium and long term. So that's why I've put that there. Now how do you
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get into crowdfunded real estate? Well there are a few options out there. There's yielders in the UK
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although I looked into that and I found that the amount that they take as a service fee was too
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high for me and the returns were too low. Then there's something called smart crowd which is
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you could buy slices of properties for as low as £100. And then for example I came across
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opportunity recently where the minimum investment was £10,000 and so if you're saving up over years
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you could put something like that down. You could also go in with your brother or your father or
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your friend to put that 10k together and that's something you might build up and save over time
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So you're putting that 60% over the 10% aside for the real estate even if you're not spending
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every month you're building up so that when the opportunity comes you've got some cash there to
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put it into it. So yeah that's what I would do personally. Now a lot of you might be wondering
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where's the sukook which is like Islamic bonds? Where are the stocks? Where's the other stuff
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the normal stuff that everyone talks about? Well to be honest with you I really couldn't
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get over the haram factor. Pretty much all of these companies they have a certain portion
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of their income that is haram, that is from riba or from something that is illegal in Islam. And
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I looked into, this is where the research comes in, I looked into the reasoning as to why many
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scholars have said that it's actually okay to invest in it as long as you purify the income
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you get from it and it's lower than like 5% of the company's income. I looked into the reasoning
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behind that and I personally couldn't be convinced and so I just said look I'm staying away from
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stocks so that's why I have no stocks in there. When it comes to sukook or bonds these are things
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that are lower risk, lower income and so as a young investor you're probably not going to be
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that interested in that. I would personally do quite a bit of research on if that is even halal
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or not. Although sukook are called Islamic bonds but not everything that's labeled Islamic is of
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course Islamic. So I would just look into that but like I said it's kind of on the lower side of
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risk and lower side of reward as well so probably not relevant for a 20 something year old investor
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Even crypto was something that I considered haram for a long time. I was following the fatwa of a
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certain scholar and since then a lot more information has come out and so I looked into it recently and
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I was okay with bitcoin specifically. Other coins and ethereum and stuff like that I need to look
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into that if I'm comfortable with it. But right now I feel comfortable with bitcoin at least so
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that's why I've put that in my portfolio. So yeah that's quite important thing for me to say because
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if you're investing in anything you need to know the ruling on it. Is it halal? Is it haram? If you
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have any doubt of course look into it further until you find comfort in the ruling that you
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found. Because wallah bro if you don't invest in something for Allah's sake then know that Allah
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has prepared something even better for you. Even if that thing ended up being halal the fact that
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you didn't invest in it because of your fear of Allah then you have no worries about the return
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you're gonna get on yawm al qiyamah and inshallah in the dunya in the form of more barakah in the
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money that you do have. So again we're looking at that quality not just quantity of money. My biggest
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and most successful investment in my life has been investing in my own development, my own learning
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my own business acumen and that's actually how I make all of my money today. So if you're interested
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in how I'd get started in business if I was starting from zero today then watch this video
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next to see how exactly I would do it. I'm talking about the exact steps what I would do
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and how I would do it so check that out right now
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