Helping you make sense of the global economy with Islamic finance.

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Money Dreams

I always wanted to be rich.

Ever since I was young, I wanted to make money. Lots of it.

I grew up in a working-class household and whilst many around me were less fortunate, I shamelessly compared myself to those that were wealthier. Always looking up and never looking down. 

And it was all I could think about.

It’s not like we didn’t have a roof over our heads. We never went to bed hungry. We were even able to go back to my parent’s country most summers to enjoy the sun and the Mediterranean sea.

Sure, it wasn’t a luxury holiday. Nothing to boast about on Instagram.

At times we’d only have access to water for a few hours during the day. But it was still better than spending every summer day hanging out in the neighbourhood waiting for time to pass by.

So naturally, a recurrent question was: what job shall I go for?

Up until the age of 14 I wanted to become a commercial airline pilot. There was a certain prestige associated with the role and my mother instilled the idea in me from a young age.

But a simple cost-benefit analysis rendered this an ineffective way to reach my financial goals. It required an expensive education and too much time to get a “decent” salary. My idea of a decent salary then was $250,000. Yes, I know what you’re thinking. But better to set the bar high, right?

That changed when I started studying economics and was introduced to the world of finance.

That’s when I knew I wanted to become an investment banker.

I was good with numbers. I had good social skills, and I had a keen interest in financial markets and human psychology.

Surprisingly, it wasn’t just about the money.

I was intrigued by the social aspect and how humans create a system that acts in unison, to reach equilibrium, by acting in their own self-interest. I found this fascinating.

But I knew that a lot of economic theory was nonsense. This 'science' is based on a myriad of assumptions that aren’t true. The number one being that all individuals are rational. In reality we are emotional beings that happen to think rationally at times.

I say at times because it’s not hard to see how stupid humans can be.

It’s just funny how we don’t question these assumptions and just take them as given.

And most people still do.

On top of that, economists aren’t the most savvy when it comes to making money. No matter how smart they sound, their predictions are often wrong. If they do forecast correctly, it’s usually down to luck. Then you have the doom and gloom economists that are always predicting a recession.

Nouriel Roubini is a perfect example. The world is supposed to end every year if you listen to him. But even a broken clock is right twice a day.

Nonetheless, I dove deep into the subject knowing that I’ll use this as a stepping stone to become an investment banker or work in a hedge fund. The markets were fascinating to me. The idea of profiting from macroeconomic trading strategies was like a massive puzzle or a game of chess waiting to be played.

I wanted to be someone who could find pricing inefficiencies and exploit them.

I kept trying but I realised soon enough that I was up against the brightest minds with the most advanced technology that have profited from the same inefficiencies I was looking for. Way before I even found them. So, I gave up on trading my own account. Sure, I had a few wins, but I also lost a lot. In the end I was just above break-even.

That didn’t stop me from diving deeper and learning about the greatest investors and how they thought, how they operated and how they saw the world. It still fascinates me to this day.

Understanding Luck

Fast-forward some years I now manage a $100m private investment fund. We’re not your typical investment fund but we still exploit inefficiencies even though our strategy is market neutral.

Market-neutral is just a fancy term to say that whether the markets go up or down, we still make money. But no, it’s not magic. We can still lose money.

With all of this I attributed perseverance, hard work grit, intelligence, and confidence to my 'success' - success is relative and I still haven’t reached the millions I always dreamed of. But I guess I’m on the right path, alhamdulillah.

I know luck played a role too. I was lucky to be in the right place at the right time and to encounter the right people who pushed me in the right direction.

But how naïve of me.

To think that I alone was responsible for reaching this level of success. I was blinded by my foolishness of arrogantly believing that it was all up to me.

What I failed to understand was that God, Allah, is the one who decides who gets what. And this was my rizq

Rizq can be understood as your sustenance, your wealth, your benefits, or goodness that you receive in your life. In Islam, we believe that this is ultimately outside of our control.

It’s not uncommon to see someone work extremely hard all their lives and not attain success. We attribute this to them being unlucky. Or on the contrary, the young banker who closed a life-changing deal and retires in his early 30s. There was certainly a mix of hard-work, intelligence, and perseverance to get to that stage. But let’s not rule luck out.

You’d be surprised at some of the investments that made us a killing. You could say we positioned ourselves to reap this luck. But things happened that we had no control of, and it worked in our favour in unimaginable ways. I’m not playing down our success either. It’s just an honest analysis of past events. At times, we got lucky.

And a lot of people do. But in Islam, this would be rizq.

Now this doesn’t mean that one should just sit and wait for their sustenance to fall from the sky.

You also have to put yourself in the position to be able to benefit from being lucky in the first place. 

The winds and waves are always on the side of the ablest navigators - Edward Gibbon

In Islam we are taught the value of work ethic and to strive ambitiously but that we should be content with the outcome.  Because only God knows what is best for us.

It is also a test as to what you will do once you have achieved what you've always wanted. Who will you become? Can you keep your character in check?

For some, it may be in their best interest not to attain this level of material success. 

You may dislike something although it is good for you, or like something although it is bad for you: God knows and you do not - Qur’an (2:216)

At this time, I wasn’t a stranger to Islam either. I considered myself Muslim. I observed Ramadan. At times I prayed. But that’s it. What I said, what I did, and what I supposedly believed in were not in line.

I cared more about my desires. So, over the years my practice wavered as did my heart.

There would be periods where I was quite religious and periods where I wouldn’t even think about God.  Naturally getting up to all kinds of mischief. I’m sure you can use your imagination as to what a young good-looking guy can get up to.

I’m joking.

But not really.

It’s nothing to be proud of, but understand that I wasn’t a good Muslim. At all. Knowing what I know now, I think it was disrespectful to call myself a Muslim.

A Muslim is one who submits completely to God. And I didn’t submit to God. I was submitting to money, girls and overall hedonism. But that’s now changed, alhamdulillah.

Now why am I sharing this? Because you may be in a similar situation. You may feel alienated by the Muslims around you. They may seem too religious, practicing, or out of touch and you that you have nothing in common. But you'd be surprised.

Everyone has their own journey. You just need to have the intention and be true to yourself.

My problem was that I wavered from side to side because I was a boy. I wasn’t a man. I wouldn’t be set on something and stick to real principles. Nor did I have the discipline to sort my lifestyle out. But I learned. It took time. And anyone can. You just have to want it enough.

Money was my God

Now I don’t mean this in the literal sense. I’ve always believed that there is one God, and one God only. Allah.

What I’m trying to say is although I believed this, I did not act upon this belief. I did not put my trust in Allah. I did not call to him. I did not thank him. I just went by my days, chasing my desires and thinking about money.

A basic philosophy that I have come to learn is that everyone worships something. Some worship God. Some worship multiple Gods. 

Others worship their desires.

Even if you don’t believe in God. You worship something. You might not realise it, but deep down, there’s one thing that’s always on your mind. That you look up to.

As I learn more about Islam and create a closer connection with God, I realise that the work I am doing is not in line with my belief and practices. I would be lying to myself if I thought it was ok to continue like this.

Whilst we don’t deal directly in riba (interest rates) there are some components that are impermissible from an Islamic point of view, and I realise that now. I knew a while back that interest rates are a strict no-no in Islam – it is sinful to pay, receive, and be a witness to a contract that involves interest rates – but I lied to myself thinking that I can get away with it. I’m not giving out interest-bearing loans, so it’s not that bad. I can make my money and then leave.

But when what you say, what you do, what you think and what you feel are not in sync, you will never find peace. So, whilst I had a lot. I didn’t have peace. 

And that can’t be bought.

Something needed to change.

Even though we don’t deal with interest rates directly, some aspects of what we do would be considered impermissible.

But it’s not only that.

Finance is an industry where most players care about one thing and one thing only: money. It doesn’t matter how they get it (as long as it’s legal – but this debatable and legal doesn’t mean moral, so any loophole will be exploited till infinity).

And I get it. Everyone is ambitious and everyone wants to make money and we all want a better life.

Don’t get me wrong, not everyone in this industry is evil. I work with amazing people, but the incentives make it so that morality comes second, and money comes first.

If you’re in a corporate job, how many times have you heard of someone, or been in a situation, whereby you did something that was immoral - but legal - and could get away with it? It doesn’t even make us flinch. Sometimes it’s even seen as a desirable character trait. ‘Cunning like a fox’ we say.

But ambition must be reigned in. It can’t be at the expense of everything else.

Life cannot be a zero-sum game.

This will be a net-loss for the world. Look at the world as we know it. Look at the level of inequality. It’s only getting worse. Yes, we have progress but it is coming at the expense of what makes us human.

Not only that, but I just don’t view money in the same way anymore. Now that I have seen it, felt it, spent it, I ask myself – what’s my purpose? Is this it? Do I just keep accumulating more money? Surely there’s more to life.

And I haven’t even reached the millions I used to dream of. But knowing what I know now, my priorities have changed.

Am I just going to accept the world as it is and assume that some people get lucky, and some don’t and be happy with myself on a yacht?

I’m not saying that we should eat the rich. I’m not pushing a communist or socialist ideal. Hell no. I’m a capitalist. I’m a trader. I like to make money and I will always like to make money.

The prophet Muhammad (peace be upon him) was also a businessman, and a successful one. Islam promotes capitalism, but a socially and ethically responsible one. Now, we can argue about what real capitalism is as new regulation is always introduced to reign in our animal spirits after every financial scandal but that’s for another time.

Not only that, but prophet Muhammad (peace be upon him) refused to establish price controls for produce that were in short supply because he wanted to tackle the root of the problem and not its effects. I’m sure capitalists would appreciate this laissez-faire approach.

But capitalism must come with limits and I, as all Muslims believe, that God, Allah, has set these limits for us.

We should aim for success and try our best. But we need rules because we never learn our lesson. Again and again, we fall victim to our own hubris, and relive the tale of Icarus.

Discovering my Purpose

So I’ve decided to change things.

And I’m going through those changes right now, as I’m typing this, thinking what next? I’ve just decided to be true to myself. I pray to God that he makes it easy for me.

As someone who loves business, economics and financial markets, I know I can add value whilst doing something that is in line with my beliefs. This is why I want to dive deeper into Islamic finance.

For those that are new to Islamic finance, the main principle is that it does not deal with interest rates (as well as investing ethically – so no investments in harmful industries such as alcohol, tobacco, gambling, pornography etc.) and bans the commercialisation of money. You can’t make money by lending money. Money is not a commodity. It’s just a means to an end.

For the non-Muslims out there, you should know that Aristotle, Plato, Cicero (and many others) espoused the same ideas; that money is a means to an end and it is immoral to charge interest.

Islamic finance also promotes profit-sharing and risk-sharing.

A traditional bank, when lending money against the collateral of the borrower, barely takes any risk. Whether the borrower succeeds or not, you can rest assured that the bank will be made whole. On the other hand, if the borrower invests the proceeds successfully and makes a huge return, they will only need to pay back the principal and a fixed amount of interest that was predetermined. That’s unfair to the bank.

I bet I got you there.

You think banks don’t need to be treated fairly?

Well, that’s what Islamic finance is all about. Every single party involved in the transaction should be treated fairly, and every party should reap the rewards or benefits depending on the size of their investment.

You see, it requires a rewiring of the brain. It is no longer “ok how do I maximise the return on this investment by not giving a single thought as to what happens to the other side as long as I’m protected” to “how do we make this a win-win-win transaction where buyer, seller and society benefits”.

It flips finance on its head.

Modern finance is predicated on extracting as much profit as possible but letting society deal with the negative externalities. Governments eventually catch up and impose new regulation but it’s always a game of cat and mouse.

And no offense to government workers, but the smarter ones follow the money. Again, it’s our incentives-based system.

The issue is that a lot of modern Islamic finance is based on the conventional interest-rate based system. There hasn’t been much innovation. They just took what was done traditionally and slapped on some Arabic names. Et voila.

So clearly this must change. It requires ingenuity, creativity, and pragmatism to deliver real practical solutions without compromising our beliefs. Some are already doing it.

I must highlight that I am not an expert in Islamic finance. I have a lot more to learn. But I’m sure I can make your life easier by decoding the current economic and financial system.

By speaking to Muslims and realising that many were left confused as to what is and what isn’t permissible regarding investments and/or financing, I realised that I could put my experience to good use. I’ve always had a knack for teaching, explaining, and breaking down complex topics in an engaging manner.

After dealing with complex financial products for so many years, you tend to know how best to break things down pretty well.

This is what I set out to do with Islamic finance. I want to make it accessible to all. And not only that. I also want to help Muslims and non-Muslims alike understand our current interest-rate based system because it underpins the world economy. It’s important to know what’s happening there to understand its effects on everything else. Including shariah-compliant investments.

This will help you in navigating the economy and teaching you how you can invest your money and what your priorities should look like.

I also want to work with funds and businesses and help them structure investments that adhere to real Islamic finance principles. I’ll be sharing my journey on this as I go along. There's a big gap for real halal investment products and shariah-compliant investment strategies that are both true to the spirit and form of what Islamic finance ought to be.

I want to use this platform to educate the public on what Islamic finance really is and how it can solve the economic problems we face today. The same problems that will exacerbate if we don’t fix them. But it requires challenging the assumptions that we take as given.

Like questioning the use of interest rates.

Compound interest is seen as the 8th wonder of the world, as supposedly quoted by Albert Einstein. A genius - we can all agree to that. But even his genius failed to meticulously dissect interest rates and their contribution to global inequality.

I want to start by changing your perspective on this matter.

I want to make you question everything you know about finance and economics.

This is for Muslims and non-Muslims alike. There will be a lot of references to Islam, the Qur’an and the Sunnah (i.e. the prophet Muhammad’s – peace be upon him - sayings and his way of life) that are paramount to understanding Islamic finance but this should not distract you from the message.

I’m not trying to convert you.

Or maybe I am?

Jokes aside. But approach this with an open mind and open heart. We can even call it something else. Call it ethical finance or sustainable finance for all I care. Spiritual finance has a nice ring to it.

And bear in mind that I am no scholar. I am just a Muslim who has many interests and has something to share with the world.

Just another guy that wants to make a meaningful dollar. To make the world a better place. One article at a time. Who knows where this could lead to.

I’ve always wanted to tap into my creative side. So here it goes.

Follow me on this journey and keep your eyes open for the next article.

P.S. If you have any feedback, positive or negative, or you would like me to discuss certain topics in future posts, feel free to email me or DM me on twitter.

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About Me

I manage a $100m private investment fund and I explore Islamic finance and economics through a personal lens. I help simplify financial markets from a Muslim perspective.

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