Be a Millionaire?

Q: Can you be a millionaire?
A: Yes!

Q: Why should I be a millionaire?
A: Managing your money, and growing it is, in fact, a responsibility in Islam.

Q: How can I be a millionaire?
A: Easier than you think!

Q: Is this easy and quick?
A: No! It is not quick, but it is fairly easy!

One thing you should get out of your head here and now is that there is no"Get Rich Quick" scheme that is ethical and legal and works for everyone.

For the sake of argument, let us forget the Islamic aspect of the followingactivities, and look at the media. You do hear a lot in the media of people getting rich by winning the lottery, becoming a movie star, or distinguished atheletes, or by founding the latest craze in internet startups. This media reporting is definitely biased, since they do not tell you how many people tried the same thing and failed to become millionaires!

The probability of the average person getting rich via any of these meansis almost nil.

Here are some common ways that do not work:

  • An uncle that you have never heard of died and left you untold millions!
  • A letter from a Nigerian Retired Army General stating that they are willing to give you several Million dollars for a low commission
  • The latest "work at home and make 10,000$ a month" piece of SPAM mail in your inbox!
  • A SPAM e-mail message telling you that Microsoft/Disney/Whizbang company is tracking this message and you can win a holiday
  • A letter informing you that you have been pre-approved for the Australian lottery for 1,000,000$.
  • A day trading scheme that will make you make more in one day than your neighbor make in one month
  • The latest incarnation of the "Get Rich Quick" website / book / seminar /...etc.
  • Domain name speculation

So what is it? Well, what we can say, is that it requires:

  • a lot of hardwork
  • a lot of time
  • a lot of discipline

If it can be characterized as anything it is a "Get Rich Slow" scheme...

Are you still reading? Good! You are interested!

Here are the basics:

  • Start Early
    As you have learned in the Three Variables section, time is on your side. This means that the earlier you start, the more return you will have on the long run, as witnessed in our Power of Compounding section as well.
    This is not meant to discourage those in their thirties (the author being among them!) to think that "the train has passed you". If you think this is not for you, then think again! The incentive here is to make you start now rather than later. Also think about it from your kids point of view: if you start now, you are giving them the chance to be rich, afford better colleges, or have enough for a house.
  • Define your Goal(s)
    The most common goal is financial independence: not having to worry about needing money in the future. In the western society, this includes retirement and old age. However, there are other worthy goals, such as children education, buying a house, and more. You have to define these goals before you select the form of investment most suitable to meat them. However, as a rule, you must not be short sighted: do not invest only to get that new car. You should keep your eye more on the long term and make investing an ingrained habit no matter what goal(s) you have.
  • Get An Education
    Get the best education you can afford (in terms of time and money required). Education in itself is good, but should be a means rather than an end. It is the best vehicle for getting better employment, which in turn means better pay and therefore better regular savings.
  • Get A Job
    Obviously, you have to have some source of income. The average person tends to get employed rather than opening his own business. In any case being employed is more than just "surviving" and putting food on the table. It is a means of regular savings in order to build up wealth for the future.
  • Get out of Debt
    If you are paying off loans from credit cards or other debts, then pay them off first, before starting to invest regularly. It is foolish in a way to invest and get 8% return, while paying a debt that incurrs 10% interest! It is better to pay the debt sooner, then invest without paying any interest.
  • Live Below your Means
    This is one of the most overlooked aspects of investing. If you are "keeping up with the Jones" and living it up by spending on luxury items, getting a new car every year or two, while not saving for the future, then you are making one of the most common mistakes: Not living Beyond your Means.
  • Invest Regularly
    The money that you saved from the luxury (above) should go into investment. Learn to save at least 10% of your gross income on a regular basis. I need to stress here that this is the minimum that will get you some return, and the more the better. 20% is what it should be and again, the more the better. Just make it a habit to save regularly: weekly, monthly, or quartely, it doesn't matter. It has to be regular and steady.
  • Select High Yield Investment
    Whatever you do, don't just leave the money sitting in an non-interest-bearing checking account in the bank. This will only let inflation eat into it.
    Savings Accounts and Money Market accounts are not suitable for Muslims, since they involve interest. Besides, they are low yield investment forms.
    • If you are risk-averse by nature, and do not understand the stock market, then select a low fee no-load Mutual Fund.
    • If you work for a company that offers an Employee Stock Purchase Plan, then do participate in this plan.
    • If you understand the basics of stock investment.
    • Read our tutorials section to learn more about investing.
  • Diversify your Portfolio
    As you get more sophisticed in investment, and as the years pass by (making you wiser), you will want to revisit your investment and shuffle things a little as the markets change and opportunities arise.

Still not convinced? Want to read more about the relative ease of building wealth? then read:

  • Motley Fool - Investment Basics
    Start with this eye opening basics tutorial, on the Motley Fool web site. It offers the novice much needed advice. It is very good, and required reading.
  • Motley Fool - 13 Steps to Investing
    Follow on with more in-depth with 13 Steps.
  • There is more to be found in our Tutorials section. Make sure you read them.
  • We strongly recommend that you go and borrow or buy the books mentioned below and read for yourself the deep details.

So you are convinced now? Where do you go from here?

  • Select a Broker and start investing!
  • If you cannot afford a Broker, then consider the low-cost direct investment alternative.

    Books To Read

    The links below will allow you to read the reviews on, and you can even buy thebook from there, if you cannot find it in the local book store:

    The Richest Man in Babylon describes the basics of money and finance by describing Gold in ancient Babylon. It is a very good primer for anyone fresh out of college, or getting married. The Millionaire Next Door - The secrets of America's Wealthy is truly an Eye-Opening book! You will discover that most millionaires do not show their wealth in worldly possessions (Rolex watches, Mercedes cars, ...etc.), but rather keep their wealth in investments, and live just like the rest of us. This book can really change your life.

    The secret of being financially secure Millionaire are not a function of how much you earn, but rather how much you save.

    The Mindful Money Guide describes how you can both make money and live up to your ethics and moral value.