 So this is the agenda. We have current statistics. I'll share some interesting things that I look at from an economic perspective. I usually read what's going on in the economy with people's household incomes, spending, things like that. There's a little bit of a pop quiz. There's five questions. See if you guys know the answers to those. I wanted to show you a graph about an actual philosopher who talks about need versus want and aligning our brains before we get into how to establish a budget. Then there's some interesting statistics about the psychology of cash versus credit that I've been observing that I wanted to share. We'll talk about financial goals, leadership and health index, and then how to build a family budget and stay on track. So inshallah we'll begin soon. So the current statistics show that 60% of Americans don't have a budget, nor do they track their spending on a regular basis. This is a pretty shocking statistic to me. 43% of Americans have anxiety about not having an emergency fund for unanticipated expenses. These are current stats on AOL, CNN Money, anywhere you go you can find a lot of these different polls and stats. 90% of families that earn $100,000 a year report that they could not go to the bank and give you $2,000 if they needed it as an emergency fund. And this is why we're actually doing this talk because these are shocking statistics. 50% of divorce filings list as financial problems were a major root cause issue of the divorce. And it's the number one listed cause of major disagreements for families that have filed divorce. Going on a little bit more, the number one reason for middle class families filing for bankruptcy, middle class families. They have jobs and probably possibly a little bit of savings is, if I get behind, the number one reason for middle class families filing for bankruptcy is health care costs. Unanticipated health care costs, $10,000, $12,000, don't have to file bankruptcy or get behind on credit cards. 37% of American families carry credit card debt from month to month. I just got killed. Alright, I'll keep going. Americans are not taught financial literacy basics in schools. Only 17 states in America have a basic curriculum and it's an elective. It's not required, so teenagers and high school kids are not being even taught the basics. Alright, rebooting. More Americans aged 18 to 35 live at home with their parents than any other time since World War II. And that's because folks are getting out of school, having lots and lots of debt because they don't find the appropriate job. They just cannot manage a budget and get out of school and live on their own. So families cannot get started if people are still living at home and worried about money, especially young unmarried people. So those are the basic statistics. I wanted to share a couple of e-congrats with you guys. We need to boot up the machine. So what does an economist do? Essentially, the difference between a business graduate and an economist is economics. We look at the philosophy of money, spending. We look at the early philosophers like Adam Smith and Malthus and the Keynesian philosophy. Then we derive the theories. We spend a lot of time looking at statistics and econometrics. And then we look at analysis and we do research. So it's almost like a doctor who does research versus a doctor who lives with patients. And an economist versus a business person, those are kind of the differences. We're looking at a lot of technical graphs. I'm going to show you a couple of things that I see when I read the paper. I don't really need to read the headlines. I look at what's going on in the economy and kind of analyzing what's going on. So this first graph here shows that month to month changes in savings rate, the red line. And you can see that savings rates actually go up and go down. And the reason why savings rates go up and go down is because the cost of the goods you buy, the bundle, we call that the consumer bundle, your organic milk, your gasoline, your tolls, your electricity costs, those things fluctuate. And they fluctuate at a pretty rapid rate. And those things affect your income. So now we use a term real disposable income, not just income, but real disposable income. And disposable income is what you have left after you pay all your bills. So real disposable income in this economy that is booming, everybody's looking at the Dow Jones and thinks everything's going great. But really, there's several problems going on. If you look at the red graph, at the early part, the savings rate is only 5%. And then in 2017, it dips down. At one point, it's actually zero. There's no red line. But all through that time, spending continues. So you're seeing Americans basically have very little savings. And now that the stock market is booming in 2017, we have to have the exact opposite of what we think. And what we think is everybody's getting wealthy. And what's really happening is people are getting behind. The blue line must be below the red line. And that's not happening. So this is a very interesting statistic. And these are the kinds of things that I look at. Don't be fooled by the news. The second line shows that the black line shows that savings continues to drop. So at the very end of the black line on the right, you're seeing that savings rate is 2%. You look at the far left top graph. I'll point it out. And the purple line shows that people are getting wealthier and wealthier. But the folks that are saving less and less are not on the blue line. They are not saving. The economy is not helping them. So if you say, oh, the economy is great, but you're not saving anything, you're getting behind someone else's getting better or richer. So the rich are getting richer. And most people are saving less and getting poorer. So these are kind of economic stats. If you look at the write-ups at the top, you'll see the same thing. So here's a pop quiz. What are the three worst things you can do with your money? Number one, you're... I'm guessing not paying your credit card in full for the time that's due rather than accumulate interest. Yeah, that's the month-to-month balance. But that's not... I'm talking about major, major things you can do. I'm guessing, like, stop buying coffee and lunch outside. Okay, the worst thing you... The third worst thing you can do with your money is going out to expensive restaurants. Food is food, and it ends up in the same place. Okay? Now, the second worst thing you can do with your money is buy a new car. The second you drive it off the lot, you are behind. You pay taxes, your loan is higher than its value. You now have a liability that is greater than its value. The greatest, the worst thing you can do with your money is buy... When you have a house, buy another house and change houses. If you look at the 3% that you pay your real estate agent and the 3% the other guy gets, and you look at the change in value of buying expensive house and the tax burden on it, it is shocking. You have to really do the true math. Okay? You have to do the true math. Okay? If you buy a $500,000 house and you turn around and buy a $700,000 house, your expenses could double. You don't realize they are going to double, but they can double because of your tax burden. And the amount, if you have lost $80,000 to $90,000 right there, if you put that in the bank, if you put that in stocks that are halal, inshallah, halal stocks, we are not talking about bonds, you could do a lot better. That's a lot of money you have given up. You go back up. So how long does it take to pay off a 10% credit card with an $8,000 balance? If you just make the minimum payments. Anybody want to guess? That number is not even there. It's 32 years. Okay? I actually saw this as an advertisement in a bank. They are that crazy that they are thinking that this is 32 years is advertising. You have to jump on, borrow $8,000 and keep paying off right there. That's one vacation you pay off for 32 years. It's crazy. You have to know the math of how those minimum payments work. When you take a 30-year mortgage on a $700,000 house, how many years does it take for you to own half your house? Does anybody know? About 30 years probably. No, so 30 years. You have paid it off. You own it. 23, 22 full years to pay off. On the year 23, you own half the house. The first 22 years, all you've done mostly is paid debt. Pay interest. It's an interest game. The bank gets fed first before your principal gets accumulated. The next thing is the average family carries blank and rolling credit card debt. Uncollateralized credit card debt. That's called uncollateralized. 16K, the average US family. If you have $100 earning 10% interest for five years, just a math problem. I'm not advocating interest. Do you after five years, does your balance equal more or less? More or less than 150 or equal to 150? Mathematicians, engineers, answers more than 150, right? Because the first year you get 10% on 100. Then you've got 110. Then you get interest on the 110. So you end up with about 160. You have to know that this math works for you because you can accumulate more or it works against you because your debt is accumulated faster. Either way. This is now shifting years a little bit. This pyramid was brought to light by Alexander Maslow. He was a philosopher in 1943. He created this thing called the Maslow's hierarchy of human needs. This is a very important graph because it should align with your priorities. It should tell you what's important and what's not when you go shopping. The first thing you need to do is meet your physiological needs. Warmth, shelter, clothing, fire, wood, energy. What happens to a person when they're in the forest? They spend most of their time looking for food and looking for warmth. The next thing they do is safety. Safety needs. The next thing they do is when you're safety, when you've got your physical needs met and you've got some safety, then you look for love and belonging, community. After that you look for self-esteem and after that you look for self-actualization. So these are very important. So what the marketing industry wants you to do is forget about the safety needs, the long-term planning, the health and the property. Line number two. And go out and buy things like fancy cars. So these are the things that the marketing industry specializes in getting you to do. They're getting you to not follow this basic pyramid. That's why a lot of people don't have any savings but then they have a fancy car. They just go out and lease a car. They're driving a brand new Audi A3. You don't have any money for your safety needs. You haven't secured the pyramid. It's upside down pyramid. So what happens? So this is a very important graph. I actually have this graph as a picture on my phone. So it reminds me what is important. So it's very important for you guys to become familiar. Anytime just type in Google, mass laws, hierarchy of needs. It's something you should look at. And this is how you build a budget. So we'll get to that eventually, inshallah. So now we're moving into psychology. So the psychology of cash versus credit. So I wanted to show you some interesting statistics about what happens in our brains when we take cash away from us and start using plastic. So there's a vending machine, a national vending machine company that says their sales jumped by 178%. As soon as they change their cash machines to car machines, people will just spend more. And that's a shocking number. The American Express gold card came out in 1982 and people were so proud of it because it made them feel special over the green card that they were willing to have a minute more of a higher balance and willing to pay higher interest rates. American Express discovered that by accident. They were just trying to change the color of their card and they realized they could change the color of the card and make it and charge more. Studies show that everyone spends at least the most stringent, strict person will spend between 12% and 18% more when they go to the store with cash versus credit. It's statistically proven. They've done brain scan experiments on people and they've plugged them into brain machines while they go and shop. And if they have cash and they pay for things, they actually have a pain center that's activated in the brain. And if the same people go with the brain scan and they use a credit card, nothing happens. So it neutralizes your value cash. You know, look at cash. If I give cash, if I buy a shirt and I give cash, something less is in my wallet. If I buy a shirt and I give a credit card, I get the credit card back and the shirt. You see that? There's something going on. We don't know what it is, but innately it's very, very psychologically driven. Disney hotels, casinos, cruises, if you've ever been to any of those places, they don't want you to use cash. The second you enter the door, they want you to give your credit card on a tab and your coke and your meals, everything, your stores, everything is just put it on your room. They just put it on your room card. Then later on you get the bill. You're like, whoa, what happened? I did that at a cruise when I went with my kids. We were paying $2.50 for a coke. Normally on the street we would pay $0.75. So they overcharge for everything and you don't even know. And then you get the bill later. The CEO of Visa said that we are at war with cash as it is a direct competitor to our business. A, they charge Target, and B, they charge you. They're charging on money on both ends for you to use your money. It's really a sick game. They're the richest people in the world. These companies are the top of the S&P 500. What do you mean when they charge you? Well, they charge the vendor who's selling. So if I'm a store and I'm charging, and I'm using Visa, they pay a percentage for them to use Visa. And you pay interest on what you use. So both the vendor and the buyer are getting charged. Just wanted to comment. So now I see vendors wanting to avoid the 3%, so they'll have a note saying, we'll be charging you 3% if you use your credit card. I don't know that's legal. As long as they tell you, sure. They just charge you 3% more. So this is very important that we realize what's going on. And you know what they do? Financial convenience. It's a financial insurance. It gives you flexibility. So you don't have to go to the teller machine and get your money. No, you want to go to the teller machine and get your money because then you can budget. That inconvenience helps you. It doesn't harm you. They want you to think it helps you. Okay, so the bottom is not showing up. But basically it says cash is what you value psychologically. You feel the pinch when you give it out. That's the question here. Sure, sure. We're giving them time. Close to this kind of problem of credit. So the way these things are, I mean, you know, when you use credit card, your credit score goes up because you're paying. So everything is credit driven, right? You go and buy a house, a car, you know, these. So how does that kind of relate to that when you go and pay or when you borrow money? Because your credit score, in fact, is good. That's sorry to cut you off. That's just a distraction. It's not hard for a high schooler who has no credit history to go get credit. It's not hard. So why are they getting you caught up and distracted in this score game? Because you think about the score and not the true cost. Live the life you want, not the life they want. That's the gist of this talk. Live the life you want, not the life they want. Right, I'm sorry. Just a quick add to that. So it's interesting that you mentioned that because actually I had a score of 750. I did try to go to the bank to get a loan, but my income didn't match the sort of like, even though the score was high. So I realized that later as a lesson of what you just said, it's just kind of like a gimmick. Because if your income doesn't match your income or your credit score is super high, they won't give you a loan. So it's just like, why shouldn't I go to my credit score? They're doing you a favor if they don't give you a loan. You go to cash. In the old days, you used to have three choices. Buy it on cash, buy it on installment, or buy it on credit card. Very few people carried credit cards. And you bought it on installment. If you didn't have the money, you take it home when you've paid for it. A layaway. They call it layaway. So there's things in this society that have to happen very quickly. So let me finish this thought so you can't read it, but you feel the pinch when you give it up. Credit cards remove you from the feedback mechanism of pain. Using cash is the only surefire way to budget. It's in your hands. You see it decline. If you're really mathematically inclined and you're really, really strict, you can budget with a credit card. But you have to walk around with a calculator all the time and keep us lit. You have to do that. There's no other way you're going to do that. You have to be extremely disciplined. And you're still going to spend 12% to 18% more. It's just proven. So recalibrate your thinking. So the whole point of that previous slide was to try to give you a real picture of what's going on. And the questions are good because you get distracted. A credit card is an instant debt generation device. That's what it really is. You're signing. You're just taking debt. And you have an accountability lag. It doesn't show you what you've done for a month. And you don't know what the calculation is unless you're like a mathematician. Can you walk around and keep track of all the interest that's being accrued on your credit card while you're shopping in a mall? No. Do that for a week. You won't know what the number is. You won't be able to budget. So see the credit card for what it really is. A debit card is something different. We're talking about credit cards. It's a hierarchy of needs. We really need to understand. You're bombarded with 10,000 messages a day which are scientifically proven and designed to make you want. Right? Shit Hamza said he studied the media and I listened to a talk of he said, before the 1920s the Sears catalog told you how something was made and how long it lasted. Then they got more sophisticated. They started telling you, oh, other wives have it. Other husbands have it. So it was like keeping up with the Joneses. And then media got more savvy and now it's about emotion. I saw a Nissan ad where, or a Volkswagen ad during the Super Bowl where the kid's wearing a Darth Vader mask and he's, you know, he's pushing this on the car and the guy has a starter in his wallet and he starts the car because the kid's doing the force field with the car and makes the kid happy. So they're now advertising is playing with your emotions. It's getting more and more sophisticated. There's a, so this talk is based on Dave Ramsey. I don't know if you guys have heard of Dave Ramsey. He's been on the Oprah show. He's kind of like the Dr. Phil of Money. And you should familiarize yourself with him. Most of the principals are here. My understanding here was to introduce you to Dave Ramsey but because we're short on time I'm not going to click on the link. But he says in this talk, don't join the cult of Apple. It's great if you have money by an iPhone but they want you to join a cult. They want you to think that you're better than a Samsung person. You're not. A Google person is different from an Apple person. We're all the same. Forget it. This is a cult. They want you to join cults and feel like you're in these cults. So we're going to talk now. The last three bullets are really examine your feelings about money. What may have influenced you? So for instance, I came from an immigrant family and my father has a horrible story about how the second he arrived in America he had to spend half his money on a coat because it was freezing outside and he lost his jacket. That story sticks with me. Our first car that he bought was from this Turkish guy in New York. He didn't have a back seat. So he bought a cheap car, a used car and we had to go to the junkyard and get a seat because my father had to budget. So I grew up in a budgeting family. Some people grew up in a family where they were very wealthy. Money was no object. They had fun. They went on vacations and never bothered. Some people grew up in tribulation. They were poor or they got kicked out of their homes. These things affect you. So please examine where your feelings about money come from and what your feelings about money really are. Then that's the first step. Explore what money is and what it means to you. Does it make you happy? I had a college roommate who was in debt and the second he made a few bucks he would just go buy himself a treat. Everyone was like what the heck is going on? But I realized for him he came from a poor family and he was always going to be poor. He had enough school debt so he didn't care. He needed to be happy. He gave himself a treat. When spring break happened he went on vacation. He didn't think twice. When spring break happened I went to my cousin's house and ate their food. We had different philosophies and we were really good friends. Understand what makes you happy. Again they want you to go to the mall and buy to be happy. Let's fix that. The next thing you need to do is whatever your feelings are you need to share them with a spouse and your partner. How many people actually have a premarital talk about money? How many couples do that? It's very, very rare. You can go on the website and see 100 questions to ask about money 100 questions to ask before you get married 30 questions you need about money it's all there. This is the summary right here. Talk about career retirement. Are both the husband and wife going to work? Does she want a career? It's very important. Who's going to pay the bills? Are you going to have joint accounts? Very, very important. I can tell you horror stories. Personal horror stories of people I know. Debt. What are your current and future feelings about debt? What is your school loan situation? Do you want to spend 40,000 on a wedding? That's a big question. Big ticket items, house and cars. Do you want to buy a house? Or do you want to keep up with the Joneses? It's in this neighborhood but that's the neighborhood. Five years later we're going to buy a bigger house. This is just a starter home. You're going to throw your money away and buy three more homes. Buy the home you want to grow in. Big ticket items, savings, investments, emergencies and risk. This is the next category of questions you need to have with the potential spouse. Raising and educating kids. Are they going to go to private school or public school? Or does a husband want the life to stay home at home school and she wants a career? That's a big issue. Parent and sibling obligations. Some people send money back home. You don't know until you have these questions asked. How much money is going to go back home? Entertainment and vacations. What do you see as entertainment? Is it going to the park or is it going to Disneyland for a weekend and staying on their dime? Feeding Mickey. These are the premarital talk. I hope you all had them. One of the things I benefited from was my wife was in LA and I was in San Francisco when we got engaged. We spent a lot of time talking on the phone. We didn't plan to do this but she's a very verbal person. I have to check the box. We actually talked about all these things. Just in general, we did but we got lucky. Very, very lucky. Now that you as a couple, any company that's run has a board and they have a vision, then they have goals, then they have objectives, then they have execution and tasks. Every company, if you came to me and said I want to work for a company, I said I don't have a vision, I have goals, I don't have tasks, just invest in my company. You'd be out of here. But as a family, we do that all the time. We don't have goals, we don't have vision, we don't have strategy, we don't have execution and we don't have agreement. That's really, really strange and most families have to have this. And it's a difficult conversation because where are you going to get if you don't have agreement? And one person, the sunna is you have shura. You talk about something, and then there's an amir. And that person is responsible. So in your family, you have to have a CFO. And that's a CFO, should not be treated like the bad guy. That CFO should be, yes, you're the CFO, we're all on track, we know what to do. We do it at work. I can't hire two more people if I want to. I have to listen to my boss. She's managing the budget. But somehow we think at home, we can call each other, you're cheap and you're stingy, so as a couple, do you understand the feelings about career? Do you have a designated leader who's the amir and the family CEO? What are your feelings and comfort level with debt? So each person may have a very different view of debt. One person may be super, super religious and conservative and say we cannot have any debt. I'll rent a house. The other person will say, oh, you know what? I looked on Chef Google and, you know, loans are okay. We don't know, but you've got to figure that out. What is the budget and the consumption philosophy of the family? The fifth vote is very important. Have the budgets and goals been discussed openly with the whole family. Don't treat your children like they don't know. Treat them with respect and talk to them and tell them why are we spending? Why can't we buy this? Why can't we go to Disneyland yet? We'll go on vacation when I get my bonus. If they understand the whys, they will comply. They won't know and they won't comply. So treat them with respect and teach them about money as they're younger. They will surprise you with how much they know. I remember my father and mother talking about budgets and my father would say no and it would be okay. He kept a strict budget. But then we were able to get things as we grew as a family, as his income grew. So that's the page. Put your family first. Like I said, live the life you need to live for your family. Not the life they want you to live. So this is the financial health index. Hopefully everybody's got this 899-point score where the needle is. But again, I just wanted to give credit where credit is due. There's Dave Ramsey's financial coaching and I got these images from a website. I want to give credit to the Storehouse Financial Solutions. You can go there and look at these images but they have a plan. They'll charge you money but they'll get you on track. And I'm sharing the same information with you. So financial health scoring, if you look from the bottom up, look at what this... actually what this thing says about the family. So each family condition is described. It says client does not... this is critical. Client does not meet any financial health standards. It's financially unstable. It's under extreme financial stress. Those people are likely to get sick. Those people are likely to have strokes. And then they'll have health care costs. It says your consistent scores in this range are doubtful towards improvement and maybe a candid for bankruptcy. So these are the different places where a family can be and you want to be improving. What is your state and how do you get to the next station? Sheikh Hamza talked about this many years ago. In religion it's like, where are you with Allah and how can you get better? You'll always be improving. And this is the same situation. They just don't talk about religion. The same situation. Where are you and how can you take steps to get to the next level? Climb the ladder. Climb the ladder for yourself and to keep your family out of debt. It's a very dangerous situation. And inshallah once you do a great job you're now putting away money for your college so your kids aren't debt-ridden and you can help them out. Yeah, let's wait. Let's keep going through. I think the time here we're going to actually stop for Isha. But then we can continue. I don't know if people are online Isha, but they are. So building lots of financial help. I just threw this out there. You've got an Apple plan, master the process and measure. So any company you have a board meeting you have a budget that has key performance indicators, KPI's metrics. So the third part is it doesn't happen any day. It happens week to week as you're spending. So if you're going to have a budget and you're going to do this, it's a long process. But you can do it. It's very, very actually easy and I've got the tools here to show you inshallah. Again, the first part you do number 01 is cash flow management. How much are you spending on rent? How much are you spending on daily bills? Revenue versus cost on a monthly basis. And you've got to watch your grocery bills every week. It's a weekly job. Number two, if you're not if you haven't done 01, 02 and 03 it goes back to that graph where I said if you're on the black line, you're not on the blue line. If you're not a saver you're not making investment income. Okay, so if you're not doing 01, 02 and 03 the economy is not helping you. You're just surviving. And you're teetering. Okay? Then there's two ways you can earn money, right? One is with your body, your mind and your time. And the other way is passive income. Your investments. So while you're sleeping while Warren Buffett sleeps he makes money. Okay, Trump passes up tax bill he's $600,000 richer. He's got passive income. So if you're not doing 01, 02 and 03 and getting to 04 it doesn't come. And that's what you retire on. That's what you send your kids to college on. So inshallah we can get there. So the basics of a financial budget. This is from Dave Ramsey also. This is a budget breakdown of what your expectation should be. It's ranges. If you add up all the ranges, 25, 10, 5 the lower ones all the way down it equals 85%. So if you can stick to that you'll be saving 15%. But it's hard to do. Panic milk is expensive. Gasoline just went up. So you have to understand real income versus accounting income. Yeah, you made $100,000 but gasoline just went up 50% and you commute two hours a day. You just became poorer. You got a $300 raise but tolls went up and gas went up and bar went up. You just got poorer. You have to then go to this budget and get the expenses that you pay. You have to find a way to do that. You have to find a way to protect your family. So really think about not income but real disposable income and what your savings rate is. The 80-20 rule pay yourself 20% first live on the 80%. If you can do that you will succeed. Inshallah you'll build it up, build it up but that takes discipline. Especially in California and San Francisco. So for income statement I don't want to use the fancy words but this is an income statement. Think revenues versus costs. This is how you build a budget. You can download lots of apps. If you go to Dave Ramsey he has a budget app. You put in your numbers and you can have an app every month and put your numbers in. So I took this from one of his apps and you can have that. This is how you build an income statement or to also think about taxes and deductions. The first line there a lot of people don't think about that. They think they make $100,000 and they only make $70,000 and that's if you're doing a good job. This is a good place to stop because we can go a couple more slides. Think assets versus liability. So a lot of people say well should I lease a car or buy a car? Buying a car goes in the left column. Leasing a car goes in the right column. Assets over liabilities gives you net worth. So if you buy a $10,000 Corolla that's used with 40,000 miles on it you can lower the insurance premium. Not only do you have a car you're paying off but you pay cheaper insurance. The same monthly payment you go buy a $20,000 brand new Corolla you pay $2,000 in tax so it becomes $22,000. You have to pay the highest insurance premium so you don't own it and it actually costs you a third to half more and it's a liability. You lease it. It's the same payment, right? The car will see the same payment. You can buy an old Corolla for $120 a month loan or you can buy a new Corolla for $120 a month. But you have mileage restrictions you don't own the asset and you have to pay a higher insurance premium and you don't own the car and at the end of the day if you're a used car you pay it off in four years you can drive it for another six years. Corolla's last forever. It doesn't look cool but your bank looks cool you're not in critical you're not in red you get up to the green then when you get up to the green you get to the blue and when your score is $899 thinking if you I always buy it, if I'm buying it I never impulse buy it I sleep on it for three nights really really what psychologically things are going on in my brain before I go buy this car really and I love BMWs but I won't buy a new one I'm a car guy I got car magazines for 30 years I used to get a car magazine in subscription that's crazy I had motorcycles too I started a motorcycle killing myself you just get into this weird psychology I want to be a motorcycle dude and you're dead I got stolen and I cried for a day and then I realized oh my god probably saved my life someone stole my bike so this is Dave Ramsey's baby steps number one number one thing get your monthly budget in order just do it before you even pay your credit cards just do the minimum payment again at $1000 your car repairs medical deductible make sure you have medical insurance get a less sexy job less high-paying job with medical benefits because young people get sick not just old people number two baby step number two pay off debt pay off debt using he calls it the debt snowball method so pay off your smallest credit cards first just get rid of them if the rates are comparable but to me pay off the credit cards that have the highest interest rate first and Aouda Billah I mean this is not a religious talk I'm not going to quote Hadid I'm not a scholar Aouda Billah pay them off and with the Nia of paying them off I'm pleasing Allah Allah will help you Allah can do anything I've seen many many I've heard many many stories first-hand stories of people who made Dova and it happened for them but if you're going to share Google and he's saying you can take loans then you listen to who you want to listen to number three three to six months of expenses and savings okay that's a lot of money for most people people are paying $4000 for rented house here, $3000 is nothing that's a lot of money because you can be you can reach out of a job very quickly there has not been a recession in America for the last nine years and in economics we're taught there's this correcting cycle every seven years we're literally waiting for an economic earthquake it is eminent and what's going on in the stock market I don't know I'm an economist and I don't know please just try to to have a rainy day this is called your rainy day fund and I've been out of a job there was a time when I lost my job between Thanksgiving and Christmas and I couldn't pay my mortgage that was a bad bad situation okay just you know okay so we'll come back there's only a few more slides if you guys have to leave thank you for attending Dave Ramsey is a he has a national syndicator radio but he's also Christian family values conservative one of the things I wanted you to notice is that he has charity in here he's got a space for charity so he budgets charity into into his budget and he recommends for all the Christian family students of course we have Saga so I forgot to mention that I did want to definitely mention that about him he's a great guy to listen to one of the so a personal story I want to tell a personal story I have a co-worker whose brother worked made $80,000 and they lived in a very small town and they had three kids and him not knowing his wife bought $80,000 worth of stuff uncollateralized credit card debt and he never knew it so he came home one day and he saw these bills going into the garbage can after years and he realized he opened it up and then for some reason she would unplug the phone because the creditors were starting to call her because she couldn't make payments she just went shopping sprees and turns out that she had spent $80,000 and he didn't know it so they went almost got a divorce he had to figure out what to do but she was a child of divorce and what her parents did was in order to make her happy they bought her stuff and she was home alone he was working long hours over time he used to work in a PG&E gas line he's a welder, he used to be on shift all the time so his $80,000 was more like $100,000 but she was home alone with the kids and she needed to keep him happy so she spent money and she didn't tell him so they never had that talk so this exact same story happened on Oprah and Ramsey and Oprah had a fight because Oprah wanted to make the show about the victim and Dave Ramsey's argument was the husband is not a victim he's also at fault and the reason he's at fault is something that I've already covered which is they needed to have an understanding like how can you be so blind that stuff's coming in the house your kids are wearing GAAP your kids are wearing Butana Republic I mean something's got to give you've got to open your eyes and notice and you've got to have a conversation so A, he didn't have a conversation bad on him B, he didn't even notice what was going on he just assumed she was buying according to the budget and they never talked about the budget so that's an interesting story the other thing I like we know personal story, the husband the wife and husband both work they have kids the husband talks to his friends about nothing but stocks always investments, investments, investments he wants to buy a Tesla okay she comes, the wife complains about it because she wants before the kids are older to go on a family vacation when she brings it up with him he thinks it's a ridiculous idea because it will throw their investments off and he won't be able to buy his Tesla so they have a major disagreement the wife wants to do something with the family with the kids, the husband it's all about money it's all about his goals all his friends are about money all his friends are about stocks all his friends are about these toys sitting and complaining about this stuff because they don't have internal agreement it's very very sad to see how is that marriage going to survive right when two people are on such different trajectories okay another co-worker of mine she was divorced, had a daughter she married this rich doctor and he charges her rent so he has a really nice house in Orinda he bought land, he built he only owed $80,000 to his mom so he's got this house paid for her so he charges her rent because they should be equal partners right she came in with $15,000 of debt he charges her rent and makes three times more than her and then he has all the money and she's supposed to pay the expenses because she has two mouths to feed it's her and her daughter so he basically counts the money that her daughter is the food that she's eating so this is going on I'm in corporate America these are people who work for me these are their stories this is real I have another story of a wife who every time she meets with her husband her husband provides they have many kids, three or four kids I don't want to say anything so people know who I'm talking about and they rent a house he's doing a good job but every time she meets with her friends they're like oh my god, you don't own here you gotta own why are you guys living in this neighborhood every time she meets with her friends she feels horrible her husband is not providing for her not doing her right but at the same time he's a good husband he's working, they have an internal agreement for whatever reason they didn't buy but she feels horrible every time she meets and sits out with her friends what kind of friends are people making each other, not supporting each other tearing each other down these are real, real stories I wanted to share a couple of those stories the other thing I wanted to talk about is be content if your husband brings home something and you have a $10,000 carola and it's used it's got 100,000 miles and it's running be content with that he's doing what he's supposed to do he's bringing it home and if it's not in your risk be content with it work on your own heart don't work on destroying him when he's doing something right for you he's doing what he's supposed to be doing the worst thing you can do is when someone's doing something right and you criticize it not when they're doing something wrong a lot of people will criticize you when you're doing something right but if you're criticizing somebody for doing something right for standing up, being a man providing for his family, working hard in the same way if a wife cooks food and I was like, this tastes like junk she's doing what she's supposed to do she's making effort to do something right and then be criticized for it that's how you tear people apart and there's a lot of people who live under financial stress and we want to make sure that we have healthy families because healthy families build a solid building block for healthy communities right the first woman who went on social security first woman who was paid the first dollar in social security 42 working people supported her check now social security 6 people earn for every one person that gets a check 42 to 1 was the ratio that's a solid social security plan that's what America had when social security started now there's 6 people who earn enough to pay for social security it's upside down how are we going to pay these obligations the average American $60,000 in debt because of our $20 trillion debt the average taxpayer is $170,000 in debt because of our $20 trillion debt that's what's going on in this country so these are the economic foundations of things that are going on these are the short stories I wanted to share to shed light on what's really going on it's like a tsunami it's an earthquake and we need to get our families right inshallah and there are couples together when they get married so charity was in this in this slide and we talked about income statement revenues and costs we talked about balance sheet assets versus liabilities this is the baby steps so we covered baby step 1 which is get $1,000 emergency fund number 2 pay off your debt in a snowball method so highest interest rates first right or smallest if it's all equal smallest credit cards first pay it off rip it up number 3 I guess that's a good big purchase like the brand new cards if you've got one with $100 and one with $10,000 and they're both the same rate pay that $100 one off get it out of there that's the snowball method number 3, 3 to 6 months that's a lot of money so you've got to have a plan and the plan is try to save 15 to 20% try to save 15 to 20% budget the heck out of your family and if you need to move to a smaller place move to a smaller place, do you need that extra bedroom when you're sick with anxiety and fear you can have a stroke and then you won't be able to provide for your family there's so many diseases that happen because people are sick with stress jobs are stressful enough commute is stressful enough coming home you barely get enough rest and then on top of that you're going to put financial crisis stress on your body it's not a good situation I had a stressful job for 7 it was a really stressful job for 7 years there were days when I thought like my heart would just stop in its cavity that's enough stress at home the lie I'm fine here layer that on top and people are just really sick and then healthy food if you're that tired and worn out please your body with food and then you can get sicker so it's a snowball effect try to be healthy financially means healthy physically step number number 4 so start investing so once you're in the saving category you can get into the investing and passive income category so start investing invest in growth stocks we're not talking about receiving interest income here that's not what Muslims should be doing they should be investing in growth stocks invest in Nabisco, invest in Apple invest in stocks that appreciate which give you an income not which give you interest so stay away from bonds stocks, income stocks not bonds not T bills so there's all these there's two real categories stocks bonds and if you have any specific questions of course I'm trying to get the MCC to set up like a financial counseling we can do classes workshops but more it's one on one not much of a workshop because everybody's situation is individual number 2 as soon as you're doing well in step 4 that's for you and your family start setting up your children for success you're going to send them to your Yale for $34,000 a year because they can get in so you can brag to your friends you're going to send them to Sac State you know they still teach you 2 plus 2 at Sac State it equals 4 if you're doing it for your friends pony up and give them more money you want to send them to Yale so you can brag give them more money if you want to set them up with the education and teach them the value of money from the time they're 3 years old and teach them how to work make them get a job and send them to school make sure you do all those things teach them about money make them work when they're in high school let them go to college and build a resume as well as a curriculum resume don't let them have all these amazing degrees on their resume and have no job experience they don't know anything and they don't know the value of a dollar and they're in debt and then they're living with you and they're 34 years old let's get to a better plan really okay and let's think about that let's think about who's influencing us okay, Emon Dyer was here he said I thanked him he said if they gave my son a free ride to Harvard and Yale I would not send my son to Harvard and Yale A, they're not ready at 18 to go that far away that's a different conversation B, people are people are letting their kids go into massive amounts of debt because they're proud of them you know and you get what you pay for you get what you pay for I know people have great degrees from Columbia they make $200,000 a year they can't save anything in New York City if you live in New York City they're working Saturday, Sunday they're coming home at 11pm at night you're a real wage your real wage is the same as a subway sandwich maker right if you look at your real wage if you're putting 80 hours a week and you're making $60,000 a year you're making the same amount of money as a dollar employee because you're putting in double the time so think about your real wage and your real time your real leisure so after you it's the kids and then get that house paid off anything can happen to you or your spouse anything can happen especially if you're earners we're all at risk we don't know how long we've got so pay off pay off your debt pay off your house family vacations are important of course you should budget for that it's really good for them but your priority is to do both not just one I see 55, 60 year old guys buying a new house I'm like what are you doing that's another 30 years if you're wealthy, great I don't know maybe they're wealthy hopefully they're paying off I don't know but I always question like what's wrong with the home you're leaving you just gave $90,000 to two real estate brokers and they're living really well number seven build wealth, give a bunch away that's the bottom line this is again Dave Ramsey so once you're wealthy you can help the community you can help other people but if you're teetering you're on the brink of needing help so give charity but make sure your house is in order so that you're not looking for a hand out later and that's the problem it's like hey I'm doing really well and all of a sudden somebody help me you didn't take care of business when you could take care of business so humble love do you need that iPhone X you need to join the cult of Apple I actually if I see someone with an iPhone 4 I'm like mashallah you can keep an iPhone 4 working you're really really amazing person you know there's a lady at work she has an iPhone 4 I'm like wow that is cool you are really cool because she's keeping that thing working if she upgrades it it's gone it's gonna blow up so humble love we should be praising people for doing the right thing so Warren Buffett is famous what does he do going back to that line what makes you happy do you know what he does to be happy he lives in Omaha he lives in the same house he lives in Omaha he lives in the same house he drives a Camry he goes to work every day he does what he loves it's worth 40 billion dollars and when he wants a treat he buys himself a dairy what is it called a dairy ice cream cone and he plays he loves to play he loves to play that computer card game I don't know what it's called bridge I think it's bridge he plays online with some lady every day for like two hours he knows what it takes to make him happy it doesn't cost him any money he has 40 billion dollars he runs Berkshire Hathaway I don't know what it's called so it's simple play he knows what makes him happy and he buys it but it doesn't cost him anything that's Warren Buffett sure one of the things that always messes with my mind is how we as Muslims don't budget because how else are you going to pay your Zakaab or know if you're the recipient of Zakaab you don't even know what that is year to year and another pet peeve of mine that's related to that is if people aren't paying there's Zakaab like in Ramadan where we know that it's on the history calendar a lot of people do it on the year we get one in which is off by 10 days so then the Zakaab is kind of like off-kilter after several years you're supposed to look at the same day every year and you can just do it on the 1st of Ramadan but my company has United Way so whatever has to happen you just do it and it's monthly I know talking to non-profits they want to see monthly donations quarterly donations they don't want to see one blip in Ramadan and they've got a scrap all year to try to see if it's going to last or not so they a lot of non-profits would like to see regular steady donations so does that mean you're paying the year in the past? yeah you just you just take a benchmark and you up it I see because it's store value right so if you have this many dates if you have this much wealth in the past in your house at that date then you've increased and then you pay Zakaab on that so I don't want to get too technical anybody can talk to you this is a great resource okay so we're here so we've got vision, philosophy and emotions Socrates said this 3,000 years ago know yourself and the media is here to manipulate you so you don't know yourself right there's some amazing amazing ads I look at ads and I'm just blown away by them I'm like wow what are they doing to me right now I look at them but see the media through the eyes of a Muslim see the media through the eyes of somebody that's being manipulated you know boxer knows when the guy fakes he's gonna come back with a punch and the media is doing the same thing it's exactly like that if you're in front of a boxer you're playing sports you get set up with a jump hook to get you know a shot that's how every sport is played this is the same sport it's a sport and your wallet is what they want and look at the credit card company even their slogans what's in your wallet do you have a cool credit card or do you have an average credit card that's how they're playing with you okay number 2 internal agreement talk to each other and listen so again have a vision and then have agreement have goals get advice from someone who you both trust and admire get an unbiased perspective call a friend who you trust somebody who will really listen to you not for the sake of their nosy but they want to actually help you they're sincere set goals, strategies and objectives together you know bring your kids in on this you know plan and execute plan and execute and remind and be kind its behavior is going to be fixed in 4 months if you're doing a budget together as a couple and family you're not gonna get a right month 1 2 you're not gonna get a right month 3 inshallah you'll get a right month 4 it's trial and error and you have to be kind because people have long term habits and things going on that you have to try to undo and that's what we've got to work on is to try to do it together and be successful together let's see I shared some interesting stories so that's how you okay so here's a couple other day grams and things sometimes you have to tell yourself no so you can later tell yourself yes right so if you want to work for the community have your corporate job but you pay off your house you can be financially free to do something you love say no to yourself first you can say yes to yourself later inshallah one day I want to retire I want to retire but not sit on the couch I want to retire and do something else I might want to work with kids I might want to help people I don't know but at least if I pay my house off and I get my pension squared my 401k squared I have that flexibility I'm not a slave to what I've got going on I've got to do it until I'm 70 we make a joke where I work it's like the wheels are on the chair so that they wheel you out when you die because there are people who literally will not leave and I ask people you're so unhappy in your job why are you here I have two answers I have them at my financial goals and I can't pay for medical benefits really really old people they shouldn't be at work there's a guy who was at PG&E 47 years 47 years he was multi-millionaire he had a pension but he wanted more and he didn't want to pay for his own medical benefits they say to me you're unhappy every day you come in my office and you complain I have nothing nice to say sorry please leave my office let me work he brings a different coffee cup every day it's like the office I see him and I just get up and pretend I go bathroom because I know it's like a recorder every day just come and ruin my day you don't go home so you don't get close to God be with your children they don't want to be with you because you kicked them out and they're in debt you kicked them out at 18 and they're in debt and you've got tons of money I don't know I've got help people some Warren Buffett quotes Mr. Rich Guy here on savings do not save what is left after spending but spend what is left after saving so his philosophy is put the 20% pay yourself first before you pay everybody else okay he takes his income 20% away and then he lives on the 80% 20% 8% after a while you can do whatever you want when spending if you buy things you don't need you may have to sell off the things you need okay you're just renting your fun you don't own anything un-earnings never depend on a single income it's an event investments that create a second source so again if you're not a saver you're not going to play a second source okay when we talk about the stocks investments right you make money while you sleep inshallah it's in your risk and the people are like well you know what I'll find the perfect job I'll sit at home go work at Target and get some experience it's tie your camel and trust in Allah they forget to tie your camel part oh no work and save don't sit at home like oh I have a master's degree that's beneath me but then you're in debt you're sitting at home and you've got holes in your resume you might meet somebody out there one of my directors at PG&E he couldn't get a job he was a toll guy in Golden Gate Bridge and he made 2,000 copies of his resume and he said to everybody in the car this is a true story I'm looking for work I'm an engineer can you help me out 1,000 people a day ignored him and somebody would be like yeah give me a resume and he got a call he started he got a call and I said I have a job come work for me I'll call you got a job you know started working in this engineering firm then he got a job at PG&E and he's a director but that was his story he started off as a toll and he started giving out his resume work is work and you're getting out and meeting people and now it's the opposite before it was like you had to be online to get a job now there's all these apps and systems that are bombarding you with thousands of resumes a day PG&E our company gets 120,000 resumes a year that was 5 years ago imagine how many resumes we get we only had 20,000 jobs 120,000 resumes a year how do we even process that so you got to know people you got to do some work on investment do not put all your eggs in one basket that's pretty cliche risk never test the depth of the river with both feet okay meaning you don't go all in you rely on trusted sources have you guys heard of the grandmother's investment there's this investment club that these granny started back in Florida and they're all there's pinching their pennies and everything and they invested in things that made sense they're like oh I like orange juice I'm going to buy Nabisco stock I buy this my daughter had a kid so she's getting Pampers I'll buy Pampers so they just they didn't use mathematical algorithms they weren't an investment bank but they banked on things that they knew about simple and they outperformed the market they outperformed the market because they bought solid foundational stocks they didn't buy of course for every let me tell you this story for every I think there was 3000 the adventure capital investments and startups in the peninsula over a two year period guess how many of them actually survived two years I have 3000 19 so in the news you're always being bombarded by the next you know Jeff Bezos and the next you know Steve Jobs there's so many failures don't bet on things that aren't solid and the other one this is a good one when we were kids we use pencils now that we are adults we use pens do you know why it's easier to erase the mistakes of childhood we should be worried making mistakes as adults and your pen is what gets you into debt you give your word to liability you don't have the money right they want your ink and there's a Volkswagen on Christmas called sign and drive yeah you heard of sign and drive just come in sign the paper take the car three months don't aim it I mean they try to suck you in they gotta get those cars off the lawn okay it's just poison you can't fall for that stuff alright so this ends the discussion thank you for being here I just want to make a dua that Allah give us Ilm and Amal Allah give us Halal for our families that allow us to be generous and Allah gives us iman, ihsan and gives us health and it's a beautiful community I want to thank the board and all of you for being here if you have questions we can take some questions if you want to talk to me offline later I'm here for another little while thank you for coming Saturday night I know I'm competing with other people I really appreciate it and with the dua Allah give us guidance to keep our families protected and allow us to be physically spiritually and financially whole and strong and build stable families and Allah guide us to stay away from the haram and stay at the hall and raise our kids in a way that pleases him and uses the example of the prophet In the name of Allah The most Gracious The most Merciful The most Merciful The most Merciful The most Merciful The most Merciful