Zakat on Investments

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Aarij Anwer

Channel: Aarij Anwer

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payment and handling loss about doorslammer law. So in that he earned he was having him one out of the show. He said that he was suddenly angry when I looked at them in this journey of kuqali. I've been to Atlanta for Tonio hasn't, he hasn't ordered another one I said, I want to go to Can everybody hear me just fucking get a yes or no, when the audience, making sure that we're all here, please turn the light on please.

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Alright, hungry lover. Okay, so this is going to be a, I think somewhat of an involved session. So I need you all to stay with me. If you need to grab your coffee or anything, this is the time to do it.

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So we might, we might take a small break in the middle because if the topic is getting quite intense, and we're taking a lot of time, we might have to take a small break just to catch our breaths. So we'll decide that as we go. You know, we'll figure that out. As we proceed, I'm going to share my screen and shall share with you some

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some of

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some of my

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thoughts and discuss with you all are some approaches to calculating the cost on investments. This is a very important topic given that the Prophet alayhi salatu salam has told us that

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Allah Manuel de la Houma Don't forget the GLC he had tala tala who sadhaka. The translation of this hadith is the person who is in charge of the the,

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the guardian of an orphans wealth should invest that money of that orphan less Zakat eats up or consumes up that money. Okay, so now what is the most of them referring to here, what he's referring to is a very specific ruling about orphans, no doubt about it. And that's not the topic that's not the showerhead, from my mentioning this hadn't. The thing to note here is the Prophet son is actually encouraging.

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investing money that would sit around idly, otherwise, money that is maybe just sitting there waiting for its owner to get old enough to assume that the profit someone's actually encouraging the guardian to be responsible and invested, because if it sits there is going to be consumed. Every year 2.5% of it is going to go down in value by zakat. And also, now we have inflation, that's a certain percentage, you know, so your money is being devalued. If we just let it sit idly. The problem actually use the word failure, this failure is actually a command hence,

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failing, right it's actually a presidents fail within them used to imply a command, meaning that it is so important the proximus using a command tells you to give us what you can meet what's the importance of this.

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This is the the premise that we are all

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encouraged to say encouraged the same through investing because that is

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if you don't do that, the the savings that we have accumulated will keep decreasing over time because of Zakat because of inflation. The idea is let us your investments grow, invest and let them grow. And then as they grow from that you can give Zakat and then inshallah there'll be more of your money to give the card from and that will mean more Baraka more blessings a cat linguistically means a new was the other so that the God will bring even more growth in sha Allah tala and then it becomes a beautiful, you know, in a way like a feedback loop as well. Right. So, that is what the Hadith is, you know, the the, the reason for starting this off with the Hadith is to give you that

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idea, were incentivized by the person to invest, but when we invest we have to also make sure that we are praying paying the Zakat will add to haka who Yamaha saw the Quran calls the cat D, right.

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So we have to give it's due right, it's the right of the poor, that we get a share of our, our investments and our savings, it's there, right? It's not some favor that we're doing to them. So we have to be very cautious and very careful about this. Okay, let's proceed. Here is the the outline for today. I'm going to be covering the following topics with you. Firstly, the accountable wealth conditions, what are the conditions for Zakat for what conditions need to be fulfilled for as a car to be eligible

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on on a person's wealth when what is the car is paid on and what is it not paid on? What type of assets do we pay the car on?

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And what type of assets we don't like are our investments adaptable, obviously, you will be discussing this with me in sha Allah and I'll want you to be interactive inshallah on this topic, and this should be fun. We'll talk about the nature of money and Zakat a little bit simple options for calculating your zakat. Any more calculated option for copying is a cat, we'll get into it in sha Allah, you might have to bust out your calculator to keep up with me, okay?

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investment types, all the ones that I have listed here, you know, different different instruments that you can invest in stocks, ETFs, mutual funds, bonds, investment properties, metals, crypto and NF T's Holy moly,

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investment accounts, what other types of investment accounts, what are the ones that we can invest in? This is not an exhaustive list. There's a few missing here, but I'm sharing these as like a guideline for you. If you have other type of investment accounts, then inshallah you can use what we have discussed and projected on to those, for example, maybe you have a holding company, or something, or when we discuss things such as

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how we are going to talk about rsps and TFSA. I think that you can transfer over to your holding company as an example. Okay, all that said, let's get cracking

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is a countable wealth. This is a word I'm going to use a lot the capital, okay? Meaning this is a, this wealth is accountable means you have to pay zakat on it. It's the right of the poor, that you take out its Zakat and give it to those who are deserving of it. There are some conditions that need to be met, you have to have complete ownership and accessibility, the wealth that you have, you have to it has to be owned fully accessible fully. The scholars say one of the condition here is still Corrado, who ate the mammal milk, he still Joomla it has to be demand, you have to have full ownership and access very important this one I would like you to keep in mind, because it's going to

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come again and again, when you talk about investments meets the nisab. The nisab is the lower the the floor.

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Anything below the nisab You don't have to pay zakat.

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As long as you're above the nisab you have to pay the zakat. The sub, you know used to be calculated on different asset classes, you know, as we'll discuss the there are four main asset classes there's a cat is do one and each of them would have its own sub now we value our wealth in dollars in money. And in as such, now when we take the new software, in essence, we're choosing between the nisab of gold or the Saab of silver nisab of silver to figure out what is the correct nisab they say in the books of faith for example, the Habilis

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will go on with the heavy lifting, but if I mean in the song, they said that you actually can put the two together to reach the nisab The idea being you should be able to

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you know calculate in a fair manner, in a fair manner whether the God is do on you or not. What that translates for us is that we make sure that we take account of all of our accounts and then we are paying Zakat on a we don't exclude something knowingly so that we can fall under the nisab that is, you know contrary to the letter of the law and the spirit of the law nisab as we have these two standards, and you can choose either of them ends at F recommend using the goal of the SOP which would mean that if all of your assets are above this amount, 5085 grams of gold which is about $6,000 then Zakat is due upon you Okay, that is an assault in possession for one lunar year. You

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know this is what the Hadith a version of Iran has says that the money that you have, either

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she said no one has afforded a pop salon that last Saturday morning. Hola la Hill hollow that there was no soccer do on wealth until the year has passed. So that is the idea that once the money has

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your the savings of your savings, an ear has elapsed already. That's when Zakat is due and of course, free from haram income because the problem said that last part Allah in the Lucha evil naiop Balu Illa Allah is pure and he only accepts that which is pure. That means that Zakat should be given from only halal well because it's given to Allah, Allah as our as an offering. So that does not mean that a person says you

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I'm just gonna learn how to earn income and I don't have to worry about that gather anything. The point is you should stop your income and get rid of it insha Allah and then earn halaal and then give the halaal and enjoy the blessings of halaal Okay, that's the idea there will lawanna I can't see your chat unfortunately so whether Zaid or erasure Can you please like read to me if something is said by somebody because my I don't have my second screen today? Unfortunately, if you can, one of you can do that, that will be awesome inshallah.

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No problem in Sharla. Just to quickly set it didn't mean to interrupt the shape and there will be q&a inshallah tada towards the end of the presentation. So all of your questions will be compiled, and I will be fielding the questions and I will be presenting them to our rich Zawinul. Okay, a lot of you actually even the comments right now someone is typing something. If there's something interesting, kindly just shared with me without hesitation, I will notice your mic will become unmuted, so then I'll pause and then you can say what you have to say. Oh, inshallah. So you're, you're giving me permission to interrupt you. I am actually here.

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Locally, okay. As that gap is paid on, there is four categories of man that he was the guy to FISA image, the self image, the behemoth and also the general homeless man alluded to, it's more categories of wealth that the fuqaha have qualified, that is where the car is due. Okay, cattle and livestock. And this depends on animal type and this is a very extensive study in old books of fit which we will not get into if you're a farmer. Mashallah email me afterwards, I'll tell you how much I got is due on your livestock crop yield 5% if you are if the if you're irrigating your crops 10% if your crops are naturally irrigated FEMA set for the summer or a little shovel. But that is

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separate excursive are a separate category of wealth needs to read and frankly, don't apply to us the two categories of

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the two categories of the

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sorry, one sec. I don't know what's happening here.

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There you go. The two categories of cattle livestock and crop yield. I'm trying to find a pointer here. Just give me a second. There is the pointer pointer.

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All right, now I feel in charge.

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Okay, so these two don't really apply to us. These two on the other hand, apply to us and that is going to be the crux of our discussion inshallah. Cash gold and silver. The Zakat on these is 2.5%, as is from the hobbies of many, many hobbies, but the habito Panisse that is a minnow in Boko Haram Muslim, he says, karate, Roshni.

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That is, you know, Roberto, OSHA is one out of 14 and that is 2.5% All right, that is in gold, silver, and whatever is taking the place of gold, silver, which would be cash and as we will discuss many investments will fall in this category. Business commodities and Arabic They call them are a little too Jarrod rule rulebook to JIRA, and rule the JIRA, there is a lot of details classically about what counts and what doesn't count how you sell and what what you don't sell. I'm going to get into that, but I'm actually going to take a more

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contemporary classification of this, okay. Because we're talking about investments, I'm not going to talk about a person's business necessarily, I'm going to talk about it from an investment perspective, and how we can take investment instruments and projected upon business commodities the way the fuqaha have described it. So let's say for the purposes of investment, you can break down a business's assets the company like a publicly traded companies assets into current assets and fixed assets, current assets, also known as short term assets, they are considered to be liquid. Okay, and our subject is that got fully fed, they're subject to the cat fully at 2.5%. Okay, fixed assets,

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also known as long term assets are considered to be illiquid and as such, there is no Zakah to be paid on them. Okay. So

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as an example of this is that if there's a bakery, okay, and you're investing in a bakery, for example, you would not be suckered on the input equipment in the store, for example, the oven, you don't pay zakat on that that is a fixed asset, you know, or a long term asset okay.

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Whereas, the profits from the bakery, the bread soul from the oven, that is what will be subject to is a cat that is what will be socketable this is

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classification I want to come back to in quite a bit of detail because this will play into how we calculate these occurred on stocks. Okay. This is going to be an important discussion, but I wanted to at least mention it here. Okay. We talked about was the goddess paid on? What is it that is not paid on demand? Ahmed says he says in his explanation, he says well as I get the fee,

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okay, outside of what's mentioned, there is no second in it, meaning once those four categories have been outlined, everything else is exempt. So as a cat is, is restricted by nature, it's not like the God is doing everything. It's by default, it's everything's exempted from Zika by default, everything is exempted from Zakat only when it is included in the list of items that we have that is agreed upon that is when we say that God has do or not do okay examples are what the God is not paid on just to give you you know, a bit more of a context loans okay loans payable, you know, loan that you have to pay somebody that that you owe, okay.

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There is a way to calculate this how do you calculate your short term and how do you tell vigil long term? That's a different webinar, a different discussion and on the nzdf website, you can find a spreadsheet that I had put together for for last year that actually allows you to put your long term debts and it can calculate for you What is your year's worth of debt, inshallah, okay, so that is that but it is a cat is not payable on it, because it is considered as if that money is not yours, and that's money, that's someone else's money, so you don't pay zakat on their money. Okay. Residential or investment property, okay.

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He says something very interesting. He says,

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In the ad the property there is no Zakat on it. Well, I mean, surely they thought Farben, even if a person is purchasing a lot of property to flip homes. Okay, not that Amanda is condoning that behavior or encouraging that behavior, but he's giving an example. That property is exempt from Zakat, even if a person has a rotten intention. And of course, Allah, Allah is the one who holds everybody accountable, you cannot run from a loss problem. Okay. So that is the principle. But the idea is any type of property residential investment property we don't pay zakat on, there is some detail about property that you're maybe flipping, you're buying to sell, or property that your land

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you have purchased, we'll get to that. But the general principle is this, that property is exempt. If you include some property for the good, there's got to be a good reason for it, which we'll get to a little bit later in accessible wealth. Okay, wealth that you cannot access that is exempt from the cat, the cat will be due on it once you are able to access it, this is the rule this is the principle

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that we have once you have full access that is when you give the cat when you don't have access you don't give us a cup. Okay, that is this part and examples of this are here and we're going to come to this in a lot more detail. Precious precious metals outside of golden silver. Okay, they're not to be considered for Zakat, even though they have some sort of intrinsic value diamonds perhaps a person has you know, a diamond

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diamond jewelry for example, right diamond itself even though it's a precious metal is not considered for his

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cars, etc. As a car is not paid on these items will laputa either. Okay, that's it.

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Should we base the gut on investments? What do people think? Yes or no?

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What do you think? Should we base our investments?

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People?

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I'm glad to see that Yes.

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I'm glad to see you moving Yes, good. Mashallah, yes, we should pick out an investment, absolutely. We should pick out investments because investments are analogous right? They would be analogous to either cash gold or silver or business commodities, okay. What that means that

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the investments that we have today, right, you could take them and classify them as one or the other, okay. And that is why we include them in our calculation for giving zakat. Okay. Now, let us let us explore this topic and this idea a little bit more. There's some key questions that we ask ourselves

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determines the Catherine investments. Alright. The first question, very important question, is the investment fully accessible, partially accessible, or inaccessible? Hmm, that's our first question.

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The second question is,

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let me, let me let me underline this as well.

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The second question is did you voluntarily contribute to this investment?

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This investment account, this is something that will become very important, these two questions are linked to the investment accounts rsps, TFSA, rsps these to determine the, whether we're being suckered in these accounts or not, okay, this is what the investment account if you like to call it as such, okay, these other questions or this particular question, for example, and negotiators, right here, right? This particular question is more like how do you value an investment instrument? To calculate its account? Okay, do you value it as cash, gold or silver? Or do you value it as a business commodity?

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That is a term that is going to be how do you view stocks? How do you view ETFs? and mutual funds? How do you view crypto, etc, etc? All of those things? This is that question that's going to be answered Question four is a very specific question that I'm going to get to later, which is, are you living off your investment? Or are you building your investment? That's really a question and I'll get to this particular one at the very end because it's a very specific situation or a specific case. Okay, now,

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let's proceed. Should we pay the capital investments? We've got our key questions, I want you to remember this, these questions. I'm going to keep reminding you of them. Okay. Let's go through the accounts, the investment accounts, okay. Again, these two questions, accessibility and contribution voluntary or not, okay, accessibility and contribution. Alright, you did not voluntary contribute to your investments and cannot access the investments, then this account is the money is not the capital, for example, CPP Yes. cpp you know, your pension,

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you are unable to access them money until you have become reached a certain age. And it's not voluntary, you don't choose to contribute your employer takes it the government takes it from you, you have no choice in the matter. Okay. That is money that is not the capital. Okay, because the other minister could on the other Mr. Coronavirus, because you are, you don't have full unhindered access. And also, it was taken from you, you didn't voluntarily put it there. Alright.

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Let's flip the script, you voluntary caught voluntarily contributed and can fully access the investment than the entire amount is adaptable. And the example for that is a TFSA. Okay, you have full access to it, it is fully liquid, by law, you have access to it 100% you can liquidate it, and you know, get the cash if you need to.

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And you are putting in money putting in money into that account.

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by choice, okay, it's fully by your choice. So it is completely entirely the capital. Alright, now let's get into like the middle scenario, a scenario that's like new yet like the, the two polar opposites. Let's get in the middle scenario, you voluntary contributed.

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But and you can access the investments but not fully, you're partially able to access them. Alright.

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What now? Well, the portion that can be collected after subtracting taxes and penalties is zero capital. This would be the prime example of this is self directed rsps, self directed rsps we contribute to them voluntarily. This is different than even group rrsps, which we'll come to in a little bit.

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And but if you were to take out money from your self directed RSP, you're going to lose a percentage of their money in withholding tax, whether that's 10% 20% 30% after $15,000 when you withdraw, you lose 30% of it in taxes and then at tax return time, they will see how much of that you will get back point being immediately at the point of extraction, the point of the drawing, you are going to lose 30% of that investment right away. So it is so that you when you are whatever partial amount you're able to access because you weren't really contributed to it, and you have partial access. You pay zakat on that amount only

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Alright,

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if you voluntarily contributed, and you cannot access the investment. Now, there are some details to explore, which is going to be the last thing we'll talk about and that is our ESP s. And we'll lumped in with this group RSP as well. Okay, this is going to be an interesting one and I'd like to hear your thoughts on it, when we get this, these these, you know, these these scenarios that I presented to you this was in compliance with the international assignment had me and this is from one of their chapters, chapter one, Article 16 inshallah, you can reference that for later on inshallah. Okay. So

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now then,

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let us meet, let us continue.

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Before we proceed, and dive into talking about

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how we're going to calculate the carton investments, okay, so let's make a quick note, because this is going to be an involved seminar. Please understand, there's a cat, it's called the cattle man, right? That's what the Arabic terminology is. When you look at the book, for example, it says, I got the cat that's given on your man on your money. If the nature of money changes, then the nature of the cat will change as well. When money was simple, Zakat was extremely simple. If a person's investments and lifestyle is very simple, there's a cat is going to be very simple as well. But as money and the investment instruments to make money evolve over time, the cat will also evolve over

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time, as well. Okay, which is why you will find, you know, like a spectrum of opinions, you'll find maybe a lack of consensus on certain topics. Or maybe even you would find many uninformed opinions, unfortunately, you will find people you ask them about something, you they will give you an uninformed opinion because maybe they know the cat, but they don't understand the, the mal the instrument of investment that you're using. Okay? So it's important to keep this in mind whenever you are talking about investments and Zakat on it because it's an evolving thing. It's a changing thing. And for someone to be able to understand or to be able to calculate the cat correctly they

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have to understand both as a cat and part of it equally. Alright. That is just a quick note for you. Okay. Let us proceed to the next part, which is the simplest option of calculating zakat. Allahu Akbar, we have simplicity as well.

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What is the simplest option, step number one, you combine the value of all your investments, the entire portfolio, whatever, wherever this might be, you take 2.5% of it, and you pays that Zakat and Alhamdulillah you are done. Okay. That is a simple option. That's a very good option. There was also Hobie, who once came to the Prophet alayhi salatu salam and the cat was due his account was due in camels, okay. And his camel the camel was due that that was due on him was called been Tomahawk. It's a lower type of camel, okay, but he didn't want to give like a lower type of camel. In Zakat, he gave a higher type of camel, winter Lagoon, as Zakat and he said this is more befitting and more

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becoming of my sadaqa of my Zakat and the prophets the most pleased with this man. And he was happy that this is how this man was interacting or this how he was donating for the sake of Allah subhanaw taala The point is, if a person is to give more for men powassan for who are higher Allah, the One whoever whoever does, so whoever does more voluntarily than that is good for them. Hello Jessa on the sunny side Quran says the reward for Kenda reward for excellence be anything but excellence. So that tells us that it is okay. for someone to just do take the simplest option here. They don't want to bother themselves. They take the simplest option 2.5% they give it their overpaying zakat. 100%

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they'll be overpaying Zakat, but when they do so all of the overpay is going to be a sadhaka a source of blessing, a source of goodness, and a source of happiness in Java. So that is the simplest option. What will happen all right

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now,

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but we also have the calculated option if you'd like to calculate, and that's what we're here today to do.

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So what is the calculated option? I chose to call it calculated I didn't choose to call it complicated.

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Okay.

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So what does he got? option? Let's break it down. Let's break it down by investment account and investment type. Remember the questions accepted

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When the tea and voluntarily contributing or not, right, that's the investment account piece. We'll come to that in a little bit. But let's talk about investment type right now. What is the the investment resemble the most? Okay, what does it resemble most closely? Is it cash? Or is it like a business commodity? Okay, let us go into it one by one these are the types that are going to cover and if there's anything else other types of investments you can ask me or you know, maybe what we just discussed here, you can take that and apply it to those types that we didn't cover it this is not an exhaustive list but this is I think would cover the vast majority of people's investments.

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Okay, it's investment type we're gonna come to accounts in a bit but let's talk about investment types Okay, let's go let's let's look at them stocks ETFs and mutual funds, these are in the markets bonds also in the market property generally out of the market, okay, precious metals can be both can be purchased in like a registered account. You can purchase certificates or you could be just putting it under your bed or something not recommended. Maybe crypto lfts crypto cryptocurrencies and NFT are called non fungible tokens a type of a cryptocurrency Okay, these are the basic investment types that we have that we will cover in our seminar. Okay, let's look at the big one

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stocks Okay. Why is it stocks is the big one is because stocks is the most accessible hallel investment option that we have stocks and then related to that mutual funds and ETFs but this is the de facto halaal option that we have available to us in the markets Okay.

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What does a stock resemble the most Okay, you can make an argument that the stock resembles cash and this is the simplest way to calculate your Zakat on the stock okay. The simplest way to calculate on a stock is to assume it resembles cash Okay. How So, what you do is you

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calculate the cost on the financial investments on the market value of the asset okay. You ignore the cost of investment and you will assume that your entire portfolio is to be liquidated okay. Even though the company has fixed assets and

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and short term assets, right current assets and fixed assets, even though company has that you are going to ignore that part and you will say you know what, the company shares are liquid and can be converted to cash at any time. And that is something that we will take, this is actually the position of share many of the scholars that you find that treat stocks like cash, okay, as if you want to liquidate the full amount, its present value, not the principle not only the growth, the whole present value of the stock, okay. This is for example, the position of the scholars from Asia and many other committees, just to treat it as a as cash. So what would that look like? Let's take

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an example. Okay. The example here would be if you had

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the in if you had the investment in Suncor, okay? Suncor is a company and it's a Canadian company. Its stock price is $27.02. Okay, that was his last stock price closing on Thursday, okay, and you own 1000 shares in Suncor? Okay, the total current value is $27,020. We're not worried about how much you invested. We don't we don't really care about your principal. That's not what we're using. We're using the current value of the stock right now. Okay, what's the gap table on it? It is 2.5% of this amount which is $675.50 Okay, is this part clear or people?

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Is that part clear what you think?

00:34:13--> 00:34:16

Okay, very good. Okay, now let's continue

00:34:18--> 00:34:39

to look at the second option. The second option is considering the investment the stock to be like a business commodity not cash. But considering and more to be like a business commodity Alright, let's break this down current assets and fixed assets we spoke about this before.

00:34:40--> 00:34:59

Current Assets are you know what you would pay is the cap on fixed assets like is that the current asset is like the bread that's been baked. The fixed asset is the oven okay. Think of that oven fixed asset bread current asset, okay. beings occurred based only on the percentage of investment that is

00:35:00--> 00:35:20

comprised of current assets. That's what you do. So what you would end up doing is you would calculate, you'd calculate what is the percentage of a stock's value, that is its short term or current asset, and then only on that part, you will pay sucker. Okay?

00:35:22--> 00:35:49

fixed, fixed assets are those acquired to produce the revenue in the future, rather than being sold in the short term to generate income. So they're excluded from the cash. In fact, in the books of fic, they make this distinction as well, this is not just a contemporary distinction, they make this distinction in the books as well. They say that my word is aka, Orpheus, aka, while a certain alat Okay, they say for example,

00:35:50--> 00:36:22

they take the example of someone who's dying a sub bout, you know, he would die clothes and stuff. So he says that if he whatever he buys of the dyes, the zafferano, etc, etc, that would be considered for who I will Don't let the Jarrah offer what, okay, it is considered to be a business commodity, and it is a material and he would pay zakat on it. Okay, this is what he's using, this is the flour the bakery is buying to bake the bread, okay, and then selling the bread to make a profit. Okay, but

00:36:24--> 00:36:29

when I say feel free, I'll add a sub Bell or empty

00:36:31--> 00:36:32

jar. Welcome

00:36:33--> 00:37:25

in a new reader by Yamaha. Okay. Very interesting. They say that the tools used by the Dyer, the one who's dying clothes and whatnot, the the tool that he using the tools used to carry the stuff around, etc, all of that are exempt from that gap, okay. So, even in the books effect, they make the distinction between materials that are used for producing the the commodity and the tools that are used to produce the commodity, they will make the tools as the long term assets, okay, or fixed assets, and they would classify the materials as current assets or short term assets. So this is why there is no Zakat on the fixed assets, there is a cap only on the current assets. Okay. Now, how do

00:37:25--> 00:37:46

you calculate this, this is obviously a very accurate thing to do. But it is obviously more tedious, you have to put in all the more work, I would argue this is my opinion on this, it is more reasonable to do if a person is long on a stock, you believe in the company, you're like this company, I believe in it, I'm going to hold the stock long term, okay?

00:37:47--> 00:38:07

It then you are really treating that stock as a business commodity. Okay, if you are in the business of entering the stock market, maybe doing a swing trade, maybe doing a day trade, perhaps you're not treating it as a business commodity, maybe I would argue at that time, you're treating your stocks like cash, right.

00:38:08--> 00:38:46

But that's up to you. I'm just this is just my opinion on the matter. You can agree or disagree. But most definitely, I can say if you are long on a stock, you're like, this is a stock I'm going to hold I believe in this company, I believe in their growth. Okay, great. Now you are a, you know, it's a real commodity for you, then it's a reasonable thing for you to do so to calculate the current assets and their fixed assets and give us a cap on the current asset. Okay. How do you calculate what's the formula, the formula is in the ends of the cap guide? This is something that you will find in other, you know, you know, this is a formula that

00:38:47--> 00:38:49

I think lots of

00:38:51--> 00:39:04

lots of scholars present this exact formula are a variant of this formula, very similar idea, as you will find on this on this calculation, which is you take your capital asset ratio

00:39:05--> 00:39:18

and multiply that with the current value of your holdings in dollars. Okay. Does the capital asset ratio is the total current assets divided by the market cap of a company? Okay, how do you find that?

00:39:20--> 00:39:31

Well, let's take an example here first. Okay, let's look at take a look at Suncor again. Okay, Suncor, let us actually, let me share my screen here with you. show this to you in Sharla. Okay.

00:39:33--> 00:39:51

All right. This, by the way, is the first one from Dr. Mandel CUDA from Amgen. Right and he's talking about how you calculate the cost and retirement accounts. And again, it is safer right to calculate. You know, he is giving all his options and opinions we already discussed that, but here we are with

00:39:53--> 00:39:59

the balance sheet of Suncor. Okay. The balance sheet of Suncor. What is the balance sheet say?

00:40:01--> 00:40:04

You're looking for, you're looking for the,

00:40:05--> 00:40:06

the fixed,

00:40:08--> 00:40:46

you're looking for assuming the total current assets, the total current assets that is right here, that's a line that you can find right here. total current assets. Alright, you found that number Hamdulillah, then you look for market cap, right. The other thing you need is market cap, total current assets and market cap, we found total current assets $100. market cap is found usually under a summary. And there is the market cap 41.1 4 billion, right. So you take the market cap, which is 41 point 4 billion, that's the denominator. And the numerator of this would be your total

00:40:47--> 00:41:40

current assets, which is in this case, 9.38 6 billion, you divide that figure, and then you multiply that by the value of your holdings, right? Your value of your holdings, which is $27,000.20 $7,020. Okay, and then you multiply that by 2.5%. And you get at the end of this figure 154.11, notice the difference panvel. When you paid Zakat, on the on the stock as if it is cash, you were paying it at 675.50, right? For the same stock, same number of shares bone, you paid 675. Whereas if you were to do this calculation, European, about a third,

00:41:41--> 00:41:50

you're paying about a third of that amount. Okay, this is the idea behind calculating

00:41:51--> 00:42:20

the current assets of a company, and then only pings a guard on the current assets of the company. The formula for that is you take its total current assets divided by market cap, and that will give you your ratio, or the percentage of the company to pay the pay zakat on. And that is the calculation you arrive at. Okay, people. Let's see if this is understood you are you all with me?

00:42:23--> 00:42:24

Are you all with me so far?

00:42:26--> 00:42:29

All right. hamdulillah. I hope I didn't lose people so far.

00:42:30--> 00:42:47

Very good. Vertical sequences are cool. Okay. All right. So this is stocks. Okay. And you can notice the difference between the two. And we've covered my recommendation that if you are long on our stock, I would say that that is the right thing to do. Okay.

00:42:48--> 00:42:59

ETFs and mutual funds. Alright, ETFs and mutual funds. What do they resemble the most? Well, ETFs. And mutual funds are just a collection of stocks essentially, right? ETFs could be a index.

00:43:00--> 00:43:05

But the index is also the underlying securities, and there are stocks, generally speaking,

00:43:06--> 00:43:33

at least the ones that are hard to invest in, okay, mutual funds, same thing. So this is a way more difficult calculation to make for a ETF or a mutual fund. This calculation we just did imagine doing this for every single company looking up its total current assets, then dividing that by market cap, okay, and doing this for every single underlying security in an ETF, if they have 100 names, you are spending a whole day doing that, okay.

00:43:36--> 00:43:47

And then you also have to factor what percentage like what's the allocation in the ETF for that, that particular security and then Mashallah, you will be

00:43:49--> 00:44:02

spending a lot of time doing that. So this is doable, but it's difficult and it can get very intense and very involved. You could say, treating it as cash is the simplest way. And II efficient way, in my opinion.

00:44:05--> 00:44:57

The, you know, the other alternative is given by Shahada Maharaj. He mentioned this in one of his articles, that you can take a ballpark figure for current assets. If you do this. I think you can do this as like a trial, take 10 companies and get the ratio between its total current assets and its market cap. And you will find that most companies are either 30% or lower, maybe significantly lower like I did for Google, I think Google was 12%. Okay. So you would find it that there is 30% is a pretty safe range. So if you take 30% as your guiding figure, as the ballpark figure, here is how you could do this calculation. So here I'm taking this ETF is called SP us. This is the s&p 500 with

00:44:57--> 00:44:59

the Haram companies kicked out under

00:45:00--> 00:45:50

All right, so this is an ETF you can purchase and whatnot. So this is the part I'm not telling you to purchase. This is not investment advice, I'm just telling you, it's highlight. That's all I'm saying. Okay, it's price is 26.54. Okay? If you own 1000 shares of this ETF, this is the total current value of holdings. All right? If you treat it as cash, you are paying $663.50 on Zakat on this $26,000. If you treat it as a business commodity, right, and you're paying it on the current asset, then you take the current asset percentage ballpark to be 30%. And you end up paying $199.05. As you can see, this is, you know, literally 30% of that amount, those two amounts are, you know,

00:45:50--> 00:46:09

this part is identical in the equation, this is only 30% of it. So this is an approach that you can take as well. If you like to be more precise, more accurate, the cash part is safer, simpler, as well, we'll LaWanda but both of those options I wanted to present to you. Okay.

00:46:11--> 00:46:17

Traditional bonds are, unfortunately, their interest bearing securities. And that's why they would be considered Haram.

00:46:19--> 00:47:02

Because it's, you know, the security itself is interest bearing, you're participating in that it's not advisable to purchase them nor hold them as an investment there if you have a kook, you know, Bond, which is a Sharia compliant bond, then that is a different, you know, topic altogether. But to my knowledge, there is no school bonds around in North America anyway. Maybe there's like an ETF of stocks that I've seen that. But if there's an ETF to Coke, you treat it like an ETF, in my opinion, not as a bond. So you would exclude this from the calculation, we'll lower them. And in reality, you shouldn't really be holding it in any way.

00:47:03--> 00:47:06

Okay, property and,

00:47:07--> 00:47:15

and other fixed assets. Let's look at properties here. Okay. And when actually pause for a second to read the some of the questions here.

00:47:19--> 00:47:21

This is a good question from lahori. Boy,

00:47:23--> 00:47:39

named Michelle, can you consider your own portfolio to be an ETF? We'll make the calculation easy. Yes, you can do that. Instead of calculating the current asset value for each stock, you take the ballpark figure 30% that is also good. Well hamdulillah

00:47:40--> 00:48:12

in the indifference of a third the method I have, I'm sharing both with you you choose which one you like, if you want to treat your investment if you think that that investment instrument is like cash, you treat it like cash and you pay on the entire value of that security. If you treat it like a business commodity, you pay on the current assets of that of that company only. And that is the the two ways to look at okay. Alright, let's get back to this.

00:48:13--> 00:48:26

If I may ask you also since you were taking questions so that the rest of the attendees do not feel that there is their questions are being done in Carlota Anna dear attendees, we will be

00:48:28--> 00:49:12

fielding questions towards the end inshallah. So Shannon, here is one question related to the ETFs topic that you're covering and the stocks someone says so it seems like there are two methods to calculate the carnival portion of stocks. One is the entire market value of the stock and the other method is using the carnival asset ratio. There are two methods that yield two totally different results isn't just a matter of how much Isaan one has that is treating stock investments as cash would be more zeca paid as sadaqa and the question excellent question. So you can look at it from a science point of view remember the simplest option what was the simplest option people

00:49:16--> 00:49:27

all portfolio 2.5% give it is in the hands of Allah and there's blessing and goodness right? So same idea applies to this you look at you have the option

00:49:28--> 00:49:48

cash or business commodity right. And you look at the two you compare the figures you're like, you know what, I'm just gonna pay it as cash because the rest of it is Exxon. Which is outstanding in the lessor. Right? You can look at it like that as well. If you want to be do more accurate right because maybe we want to be accurate while also doing

00:49:50--> 00:49:59

we want to be want to have both things whenever a cake and eat it too. Then you say you know what? I actually see myself

00:50:00--> 00:50:28

As a true investor in this company, I am long on this stock. I'm not just, you know, swing trading, I'm not just doing it for a little bit and you know, making a lot of money and then just circulating I'm not doing any day trading, I'm not doing it, you can, you can go back to your intention. Right, it could go back to your intention. If you feel that you are long for a company, this is it. This is a company, I believe, say Apple, right? I have a friend who has Apple stock since he's held it for ages. Right? And he said, I'll never sell it.

00:50:29--> 00:50:42

Right? This is a true investor. He's totally long in that company. Right? So they, for him, if he wants to be accurate, he can use this method of Li

00:50:43--> 00:50:51

socketable portion of the sale of shares, figuring out the the total current assets and whatnot. Does that answer the question?

00:51:00--> 00:51:03

Would you ever think? Alright, I think Yeah.

00:51:04--> 00:51:26

Perhaps let me take another question with you because I don't want it to become 50 questions. So another question is I've saved around $25,000 for hedge for my wife and myself, and it's just sitting in a checking account, it does not grow. We're not getting the opportunity to go for hedge. So is the amount in check income qualified for this account? Okay, is this a question already in the in the thing?

00:51:27--> 00:51:40

Now, let's keep this one cuz this is not related. Totally. Right. I was wondering, related to the calculation, if you don't mind. Yeah. But it Alright, let's actually go back to going through the rest of the slides. Please, if you have questions,

00:51:41--> 00:52:23

just keep adding them to the QA. I just wanted to take a few questions about this specific calculation just before we move on. Okay, that's all my intention was, okay, Zakat on properties, the house you reside in is not subject to the cat. Of course, property is purchased with the Express intent to resell the entire resale value of the property is subject to the cat, again, does not apply to a house she resided. This, by the way is the enzyme if you know from the enzymes a cap guide, this is the position that ended up takes on the map. Okay, if it is marked to seal and cashflow flow is insufficient, then pays a cat after the sale is complete rental property, then you

00:52:23--> 00:52:38

pays a cat on rental income minus the expenses. Okay, so you don't pay for rent, let's actually just clarify that break it down a little bit, let's do it so that the house you reside in, and the rental property that you own.

00:52:39--> 00:53:11

And property you own with no intention, property you own with no intention, these three knows the cap on the property. Okay, these three, there is no cap on the value of the property, if we have rental income, and you spend the rental income, those accounts, but if you save the rental income, like anything you saved, and that saving was there for a year, then you will pay zakat on the on the same rental income. Okay, that's that these two are

00:53:12--> 00:53:24

the case there, you know, these are matters of some difference of opinion classically as well. But I'm going to share with you enzymes position, which is property that is sub that could be subject to the gut, okay,

00:53:25--> 00:53:33

a property that's marked for sale. And it's been on sale for a year or more definitely not happening in Toronto.

00:53:34--> 00:53:45

Okay, but assuming some part of the world that happens, then you pays a cat on the on the property after the sale is complete. And this is, I believe, the hanafy position.

00:53:46--> 00:54:26

Also, the entire sale value on the property is subject to as a cat, if your intention is purely to buy the house and sell it to make a profit, if you're treating the business, excuse me, if you're treating the house, like a business commodity, right, let's call this this, this is, you know, a person selling a house. This is one case, let's actually take this case, this guy is treating the house like a stock in a way okay? That is when you would pay, it becomes a business commodity, then you pick up on it like a business commodity, of course if the money was held and saved for a year, okay, but other than these

00:54:27--> 00:55:00

outlying scenarios, the scenario of you're using it purely for resale flipping houses, and that's your business and the houses your business commodity, or a house that you're selling. And the money is going to be like that's a lump of money that's going to sit in your account for a while afterwards. That case those two are the ones where you would calculate the cotton but all the others the house you reside in the house you own as a rental property, a house or land you own with no real intent. You don't really know what you got.

00:55:00--> 00:55:27

to do with it, all of that is those a god, maybe you want a cottage Mashallah get send me an invitation. But if you have a cottage, you know, that's your house, right? You live in it for a few days of the year. No problem. No Zakat on it. Lola Juan. Alright. So that is our discussion of properties. That's actually a move in a manner. If you don't mind get back to the questions towards the end. Yes, please.

00:55:30--> 00:55:32

Let's move on to

00:55:34--> 00:55:40

the precious metals and precious metals. As we said, we're pings that got on, on

00:55:41--> 00:55:57

you know, gold and silver, right? medals, stones, gems, diamonds were excluded from the calculation. Now let's talk about some classical difference of opinion amongst the schools amongst the the fuqaha. What are the what is, what is that difference of opinion? Well,

00:55:59--> 00:56:24

we have the hanafy position, which is up as a cat on all jewelry, whether that jewelry is worn regularly, or it's unworn, or it's an heirloom, it doesn't matter, you can check out on it. Okay, the chef theory and humbly and the Maliki position is no Zakat on jewelry that is worn and the idea is that there's a hadith of Muslim about this in a tirmidhi. Right, that the problem is the exception for

00:56:26--> 00:56:30

you know, my universal other than right what's worn regularly.

00:56:31--> 00:56:35

Mineral surely from the jewelry and whatnot.

00:56:36--> 00:57:23

That is what the position is between the two, the two positions within the schools effect, I would say that this is my personal opinion on the matter, which is heirlooms, irrespective of which mother Have you are going by are fully accountable because heirlooms you're keeping it more like an investment, more, it's more of an investment purpose than anything else, even though there's some sentimental value to it, it really is, in a way a holder of value. And in you know, its its value grows as the value of school grows, for example, right. So that I would say it's probably is accountable just like billions and coins, gold, silver bullion and coins are accountable as well.

00:57:23--> 00:58:05

Alright, that is in the summary of precious metals. Let us move on. And again, here I'm giving you the opinions and you can choose to follow which one you feel comfortable with the hanafy position is you give it on all types of jewelry, the sharp end and the humbling position is that the jewelry that's worn irregularly there's no Zakat, the Hadith in Timothy, the hammer fees don't consider it to be strong evidence and that's why they don't take it into account. Whereas the humble is for sure. And the chef is as well consider that to be strong evidence and that's why they excluded from the calculation This is how basically works You know, there's two different opinions one school is

00:58:05--> 00:58:14

going to say this Hadeeth is weak the other says no, it's not and that's why there's a difference of opinion in many many instances and circumstances okay.

00:58:17--> 00:58:17

crypto

00:58:19--> 00:58:27

to me years ago we talked about this people will say what this oh what that but now it's it's mainstream brothers is mainstream now. What can you do?

00:58:28--> 00:58:47

So we will talk about crypto and crypto now what we will say is you treat cryptocurrency currencies as cash. Okay, you treat the treat cryptocurrency as currency. That's the way to think about it. You pay the full the cap on the full amount held, okay.

00:58:50--> 00:59:04

All right. Not your investment, not the principal. But the amount D the the present value that you have today the current market value that you have today. 2.4% on that, okay.

00:59:07--> 00:59:19

Nf T's non fungible tokens This is new, non fungible tokens a new I'm gonna actually asked you what you think of non fungible tokens before we actually I share with you my thoughts, but what do you think about

00:59:20--> 00:59:22

non fungible tokens should there be a cat on it?

00:59:30--> 00:59:38

NFT is NF T is a crypto coin that's used for like art collection and collectibles.

00:59:39--> 00:59:59

But the hardest thing NFT is like cash. Okay, very good. I like that. Any other thoughts on NF? t? Yes or No sister means saying Yes. Very good sister. Now EMA is saying no. Plus, I'm you're saying yes. Okay. That's good. I like how we have some differences here because we like to, you know, discuss these matters.

01:00:00--> 01:00:08

This is a new thing. It's a very new thing. In fact, NF T's probably broke on the scene maybe like, really? Three months ago, they became mainstream.

01:00:09--> 01:00:30

And it's quite interesting. Did you know that there's a guy who purchased the NF T for $70? million? Hmm, is the guy from South India, who did that $70 million of a digital art that he purchased. And then there was like a LeBron James dunk that sold as an NFT. For I don't know, how many, some ludicrous amount, right?

01:00:32--> 01:00:33

Can you sell it for that?

01:00:36--> 01:00:53

You know, you see, like, the reason why it becomes a valued item is that you are able to, for the one who wants to buy something, they who also considered considers it valuable, you can prove to them that this is an original

01:00:54--> 01:00:59

token. And this original token has value.

01:01:00--> 01:01:15

That's how its carrying value. See, I'm not a card collector, I don't collect baseball cards, or basketball cards and whatnot. But this is a thing, people who collect baseball and basketball cards when they collect them,

01:01:16--> 01:01:21

and they can verify the cards, you know, quality and originality.

01:01:22--> 01:01:24

It becomes extremely valuable.

01:01:25--> 01:01:39

As the name is saying it's very subjective. I agree. I agree it's very subjective. And what has value to one has not much value to another list. That is very poetic, you know, a man's treasure. One man's trash is another man's treasure.

01:01:40--> 01:02:29

Right? But what we do know is there are immense amount of there's an immense amount of money that's been poured into NF T's. Okay. And that's a reality that we have to understand. It's like art collection. It's like baseball card collections. So my thought on this is as follows. collectibles, like jerseys that you buy to where, and to support a team, there's obviously more data on it, okay? Likewise, anything that you buy, just because you know, it's nice, it's not intended to be an investment vehicle, okay? It's just meant to be an object that you own. There is no Zakat on that. But if there's a collectible item you bought with the intention to sell in the future, then I would

01:02:29--> 01:03:08

say, especially given I'm talking especially about NF T's here, okay. Not talking about like shoes or whatnot, right? Maybe you bought your Jordans in like 1980s. And they're worth a lot of money. I'm not talking about that. I'm talking about NFT specific, specifically, okay. If you bought it with the intention to sell in the future, then it is like a crypto coin. Okay, then it's like a crypto coin. Just it's just, it's just like you own ether, or you own anything else. So you have to then pay zakat on it below. And that's what I think, currently, as I told you, in the very beginning, money, its nature changes and evolves. And this is just one of those things that's

01:03:08--> 01:03:25

evolving. And this is a discussion, please don't take it as like a definitive thing. I'm just discussing with you what this is going to go on, right? Is it helpful to purchase things like that for 20 million? Well, brother Shan, if you have maybe a billion, maybe 20 millions is a very small amount compared to a billion right.

01:03:28--> 01:04:10

But overall, what we're told to do is we're told to not be wasteful in the numbers within a candle. The one the Sheltie we know that those who are extravagant. These are people who are the brothers of the devils. Right? And that is something that will be considered to be a Seraph, that will be considered to be a type of the sort of excessiveness however is seraphs is is is it's not a hard and fast thing in the shed er, it's a subjective matter. For example, or Madonna Anna was said once that if you spend a third of your wealth on editor on on root on on perfumes, that will not be considered israa.

01:04:11--> 01:04:51

He said that once this is a authentic statement from him either Omar, Abdullah Omar, one of one of the two. So it you know, a lot of these things are quite subjective. I'm not here to give you like the final say on the matter. I'm just discussing with you that this is a new thing, right? And the principle that we're going by is if you're buying it with the intent of an investment, then treat it like your investment. If you buy with an intent of a collectible of something you like, then you treat it like a collectible item below item. don't recommend saying that as well. Exactly fair for sharing that as well. I hope that makes sense. Yes, brother Hisham

01:04:54--> 01:04:55

and this is gerima.

01:04:58--> 01:04:59

Okay, I'm gorilla moving on.

01:05:00--> 01:05:03

From the NF Ts, other aka NF T.

01:05:05--> 01:05:44

Let us move on to just a quick recap of what we spoke about Zakat on investments. Right, the key questions we asked to determine the capital investments, right. When we spoke about the instruments, we looked at what does it resemble? You know, quote most closely, hmm, cash gold and silver or business commodity? This was our main question and we talked about stocks ETFs, etc. That was a question to be asked. Now we're going to talk about investment accounts and investment accounts, we want to talk about accessibility and voluntary contribution. Okay, let's look at

01:05:46--> 01:06:22

let's look at this idea again, you did not voluntarily contribute your investments and you cannot access that money is not so critical. But if you voluntarily contributed and you can fully access the entire amount is accountable. Okay, let's break it down investment account by investment account, shall we and ask these two questions every time you come across an account okay. The question that we ask is, is the investment fully accessible partially or inaccessible? For TFSA? The answer is fully accessible.

01:06:23--> 01:07:00

Number two, did you voluntarily contribute to this? And the answer for to TFSA is you did more than surely contribute your that money was not taken from you, like from your payroll or anything, it was 100% your choice. So the entire amount is a capital investment type of stocks and ETFs. In it, you we discussed that earlier how to calculate that you could use the treated the whole thing as a cash account. And then on its present value, you could pay 2.5% look at or you could calculate its its current asset,

01:07:01--> 01:07:16

and percentage of the current assets and then pay zakat only on that that we've discussed quite a bit. I hope that makes sense to you all. pensions. Okay, so we have CPP, we have lira, there's other types of pensions that a person could have as well.

01:07:18--> 01:07:28

Generally, the idea behind pensions or M actually restrict myself to CPP here that it is inaccessible until you reach a certain age okay.

01:07:29--> 01:07:59

And the moment it is inaccessible, there is no cap on it all right, the moment is inaccessible, there is no such value, add to it, the fact that you did not voluntarily contribute that money it was taken from you. So it would be not the Canada but now when you get your pension, then that money is now if you save that money for a year, now you pay zakat on that amount. Walla Walla, okay, so that is when it comes to pensions.

01:08:00--> 01:08:09

Now, let's get into something more interesting. Okay, those two things are more clear cut right on the opposite ends of the spectrum. Now let's get into something more more dicey

01:08:11--> 01:08:13

retirement funds.

01:08:14--> 01:08:23

Let's look at a self directed RSP. And we'll be grabbing a very quickly inshallah, maybe another five minutes and then I'm done with the slides. Okay. Self Directed rsps.

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Is the investment fully accessible, partially accessible or inaccessible? The answer is, for a self directed RSP, it is partially accessible, you are going to lose

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up to 30% of the investment value if you were to liquidate it, maybe even more depending on the tax implications. Okay. But the point is, it is partially accessible as an investment.

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But did you voluntarily contribute to it? The answer is yes, you did volunteer really contribute to it. And the opinion that is the opinion of the scholars from Angela, and, you know, the the Islamic council I mentioned before the Islamic international international scientific Academy, their position on this matter is you pay zakat on the portion that can be collected after subtracting taxes and penalties. That portion is is a capital. Alright.

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But now let's get into an important consideration about rrsps. Because this is a real thing. Retirement Fund is for your retirement. Yes. It's for your retirement, you're going supposed to be living off of it. Eventually. What happens if See, this is what you do when you're building your, your retirement fund. You're building it slowly, slowly, slowly, you're adding to it. You treat it as such, you paid Zakat throughout your life on it. All right now you reach the end of your working life. And now you are in a situation where you are living off your retirement fund is at that point a person consider this

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They have a $500,000 RSP if they withdraw the 30 $500 from it, or sorry, $35,000 for living expenses from this RSP per year.

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Now, if they were to pay zakat on the RSP value, which is 70% of the 500,000, after removing the withholding tax, there's a cut, there's going to be $8,750. That's 25% of what they would join for the living expenses.

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That's very high. Right? The goal of the gap is not to put a person into poverty. Right, it's not to make a person dependent, it's to remove poverty, right. And it's supposed to be fair, right? If a person has built their rsps, they're saving and every year that gives a cut and really gives a cut. Now, when they reach the point where they're living off their retirement, if they were to give the garden the whole value, that will be too much that will be 25%, perhaps, of what they're taking out for living expenses, right? That's a huge sum given especially if a person ends up living long and they have dependents Still, this is a real problem. This was something that was a person asked me

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one of the brothers in the mother asked me about this and like if I was to withdraw, if I was to pay zakat on my RSP that would end up being more than what I withdraw from it. I was like Mashallah, brother. Right? Very difficult situation, what do you do about this? So the alternative is as follows. This is an alternative that I suggest for people specifically in this situation, not every situation, this situation only you are living off your retirement. Alright? Consider the RRSP as an investment property,

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as if the RSP is a house that you have purchased.

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But pay zakat on the withdrawal amount.

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It's analogous to the rent. Okay, so say you're withdrawing 35, a year from your RSP you pay zakat on the 35,000 straight up. And that's it. Now, you could say well, rent, I have to save the rent. And here I will use 35. Yes, it's not exactly rent. That's why I said it's analogous to rent, okay, but your investment is not exactly a house, either. It's analogous to an investment property. Okay. So that's why this is a good in between solution where you can give Zakat fairly on the money that you are using, right, and the money that you are that you have, without, you know, breaking the bank

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without breaking the bank. And again, this is someone who insha Allah has built up their investments and paid Zakat on it throughout. So this is not someone who's like cheating the system or something, you can't cheat the last part Bella, of course, this is just make it so that it's fair for everybody, especially for the person who is retired, and they're living off of their retirement fund. So this is a important consideration. And this is one of the things that I like you to think about and tell me what you think of it afterwards in childhood. Okay.

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Now we get into group rsps. And this is where you know, the waters get deep.

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Okay, is the investment fully accessible, partially accessible or inaccessible? It really depends. It depends because when you are working for the company that group RSP is inaccessible. Once you leave the company, generally speaking, the RSP becomes accessible. Okay.

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That is generally the nature of it during the amount or while you're there, you contribute voluntarily to it.

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This is different than all the scenarios before.

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This is different because unlike pension, you were in voluntarily contributing to your pension, you voluntarily contribute to this. You can say Well, I do it for a tax break. Sure, but you by your permission, right? You can tell your employer, I don't want to contribute and they will match your group RSP contributions. Only when you say yes, I will do it. Will they match? So it's still voluntary? What do you do in this situation? What to do in the situation where your money is? Its accessibility is questionable, but your contribution to it is voluntary.

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Okay, we have another thing that's quite similar to it, which is the RDSP.

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You saved the best for last year ebooks. Alright. Is the investment fully accessible, partially accessible or inaccessible? It is inaccessible.

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Technically, you could say I can shut down the account and take the money out and that adult right but that in practically it's inaccessible. Okay.

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When I say accessibility, it's as a practical practical accessibility not like a theoretical one. Okay. And RSP the intent isn't to liquidated, right? The intent is to keep it for the kids. Right? So it's in a in accessibility is built into it by design. Okay, but did you contribute to it voluntarily? The answer is, yes. You contributed to it voluntarily who did not? It wasn't like pension that was taken from you. This is analogous to Obama. And

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what is my llamar? Okay. This is something that's very interesting. I'm going to share this with you. I have my notes on wildomar. Here, I'm going to read Okay.

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What is my diploma? He says, an maladie Lie of the Russo Hebrew who Ll defer v piccone. He looks much older than old violin, almost Soobin or masukkan? La you the ramen? Sorry, ramen, sign up, set up. Oh, Amezaga minutes. So Bon, how can they you know, Elijah hidden laahu

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etc, etc. So what is ma ma ma?

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Ma Ma Ma is money that a person

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is unable to benefit from it. Even though they fully own it.

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They're unable to benefit from it, even though they fully own it. There's some examples given in the books and fit of what this is like. They say this could be something that money that was

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you know, you know, for example, someone buried the treasure in the desert, they're trying to hide money, but they forgot where they buried it. Okay, and the scheme

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told me the scheme guy, you know, he buried treasure. He buried it. Oh my goodness. Okay. But that is an example of melodrama. It's money, that's yours, but you can't access it. So in those circumstances, I find that this is a analogous situation to maluma not exactly identical, but analogous. How so? Let's look at the opinions of the scholars here. The Hanafi opinion is and the who does account the fee that you are a delicate beholder any of the other one who lays a female bodies like cattle. Okay.

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What alien malamala either Lamia Kunal different De Soto v Maclaurin, la Kunal, Malika Iranian, very interesting reasoning, okay. The Hanafi say it's not accessible. And you can benefit from it not just not accessible, inaccessible, it's also you can use it. So you're not really rich because you don't really you can't really use your money, right? So you're not really rich. So there is no Zakat on it last like atrophy

01:17:58--> 01:18:09

Alright, until it is accessed. Meaning if you find it now it becomes your money again. And then you can it's as if like your, you just got it right. So now you start using a card

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clock from the time you found it. Alright, but while the time it was lost or inaccessible, no the card on it whatsoever. And their evidence is what earlier the lawn who said that lace a female body is a cat. There is no other cat on model tomar. Okay, and this is what we're discussing here.

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The Maliki position is that

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another mother Heavenly Mother here to either an animal user carry on in our heads either watch, or hibou. Well over here, even on hussaini he says cannot be accessed today with fees. penalties. Up is a cat on it. The Maliki position is up is a cat on it once.

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Okay, only when you have access to it. Okay, let's take the RSP example.

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Say you put money in the RSP for your kids. Your kids don't go to university or college. And all the money you put for RSP you get back. The day you get all your money back along with all the gains of it. The government will take their contribution I'll give you back your contribution along with your gains.

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When you get that money back, that is when you pay zakat on it that's the medical opinion because until that day, it was in accessible. It was modeled Omar

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II even if this was years, what about the law even langoustine even if it was inaccessible or missing for years? It doesn't matter. Okay, that's the Maliki position. I find this to be a very good position. By the way, the number two position the medic position, I find it to be very strong position. Okay.

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The Sharpie and the Hambali position is the harbor Chevy chef in your ear to will and I began to Willa Wu, was the

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Got the fema.gov lacking logic Buddha flew her in boggy by the top dill Molly, who's a key Lima mother, Minister Nene. Okay. It says calculate this occurred every year is the goddess do every year.

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But p don't pay it

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until you find it. And when you have found it, then P, all the users have got all together when you have found it and you can access it. That's the chef, the IE and the Hambali position. As you can see there, like you know, this one, one and three are like polar opposites, and the Maliki position is kinda in the middle, and Willow lavoro Madhava la Hill Marikina mill, no, hula is inland is Sonata and wahida by the top delmark I believe that this is a stronger opinion. Because once you get it, it's accessible to you then you give money or you pay zakat on it immediately, then, okay. sonova comes in man for one sec one years ago, but the moment you receive it, this is what you can

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say about rtsp and Java I've discussed with others about this inshallah, I think I will try to put in like a small article or paper on rsps to gather more information about Lamar and everything will be added there. But this allowed them I feel is the closest that we have to analogous situation to rsps and I will say the same thing about group rrsps your group RSP let the contributions sit there until you get it that day you get your group RSP now you treat it like a self directed RSP you deduct from it, withholding tax and the rest of it you pay zakat on will LaHood Allah Allah that is the organization shall data. Any questions or comments we can take now john?

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Joseph Hello, hey, Ronnie shaken aardige once again, National Guard foundation would like to thank you immensely and the London Muslim mosque for putting together this really informative webinar and already shaken out. We're having over 30 to 40 questions and a lot of them regarding our RSP RSP please she can you repeat this portion or please share what about group and I think Jessica Logan and Jake audacia that you mentioned about the academic paper that inshallah Allah, you will try to work on. And I think that will help bring about a lot of a lot of clarity. And for our dear viewers, you can ensure long data access that on our website, and for all of you I shared it a number of

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times in the chats and I hope that in Trello to either you got it