By Imam Tahir Anwar who leads masajid in the Silicon Valley
This message is for people who are homeowners and make good money.
I’ve never understood why people don’t pay off their homes. I’ve never understood why people only make the minimum monthly payments, so they are enslaved to the financial institution for the entire period of the loan at times for 30 years. I’ve never understood why some senseless people have barakah-free interest only loans?
The tech industry, is an unforgiving industry. Once you reach a certain age, and there are younger people who can replace you at half your cost, you will be out of a job. Over the years, I’ve witnessed many people lose their homes after periods of unemployment; they lose their well-paying jobs and often cannot find another one. These are people who made good money, but were busy spending it on cars, vacations and God knows what else.
[A few months ago], I spent between Maghrib and Isha with an uncle, who has earned a large amount over the year—on occasion in excess of a million dollars annually. A generous man, who supported his entire family overseas—purchased each of them homes— and assisted widows for many years. He’s been out of a job for over a year, and can’t find another. He lives in a large home, which he now must sell. He’s having a hard time selling it. He was in tears, fearing that he would be on the street with his wife and (young) kids.
I reassured him that it would not happen, but honestly I was asking myself: Why didn’t he use some of his money to pay off his home that he’s lived in for almost 20 years? This way, one of his largest monthly expenses could have been avoided. He could have rented the house and moved into a smaller place, providing him with income in hard times. Read Piles and Piles of Stuff here for on consumerism
This is the story of many people in our communities.
Lynnette Khalfani (The Money Coach) in her book “Zero Debt,” says that: “Debt is the longest-lasting economic curse, the most heinous financial plague, and the least recognized form of modern slavery afflicting Americans (and others around the World) this millennium.”
My advice—let’s call it an investment strategy—is at the least, secure your home. This is your best investment, not your 401K, not your stocks and not even your rental properties, if your primary residence isn’t paid off. This is a faith-based principle of building wealth.
A small home that you own is far better than a larger home that the bank owns. The peace of mind that accompanies this, especially for your family, is priceless.
Some will point out the tax advantages they enjoy on the interest/profit they pay. However, these advantages often aren’t all they are touted to be (if the interest on your mortgage is less than the standard deduction, you aren’t even getting an additional tax benefit) and there is always talk in every administration of taking away the home mortgage interest deduction. Plus, imagine the benefits you will enjoy from Allah, when you are debt-free, and for many, interest-free.
I end with 2 du’as that the Messenger of Allah taught us.
1) One he taught to Abu Umamah Ansari, who recited it, and said that Allah removed his worry and relieved him of his debt.
“Say, in the morning and evening, ‘“Allaahumma inni a’oodhu bika min al-hammi wa’l-hazani, wa a’oodhi bika min al-‘ajzi wa’l-kasali, wa a’oodhu bika min al-jubni wa’l-bukhli, wa a’oodhi bika min ghalabat il-dayn wa qahri al-rijaal (O Allah, I seek refuge with You from worry and grief, and I seek refuge with You from incapacity and laziness, and I seek refuge with You from cowardice and miserliness, and I seek refuge with You from being heavily in debt and from being overcome by men).”
2) Allahumma ikfini bi halalika ‘an haramik, wa aghnini bi fadhlika ‘amman siwaak. (O Allah, save me from haram and make the halal sufficient and by your favor, make me free from others)
These words were spoken by Ali when a person expressed a shortfall in his wealth to Ali , he said: Shall I not show you what the Prophet Muhammad taught me, even if there is a debt equal to that of a huge mountain, Allah will pay it. Ali then recited this du’a.