Can we live without loans?

1:36:00 PM

House loans. Car loans. Study loans. Credit cards. Up to an extend, personal loans.

How did we end up living in this society depending on borrowing money to purchase things that we cannot afford? Moreover, we are being charged interests on money that we borrow.

The problem with loans & debts is that you have to live your life, everyday, owing money to another party. And its the idea of these parties charging interests that annoys me most.

The way I look at it, there are only 2 ways that we can live with financial freedom (i.e loan/debt free).

1. Live within your means. Take the public transport. Rent a house. Live happily. Debt-free. Worry-free.
2. Be rich. Work really hard and pray that God will bless you with all the money in the world that you can purchase things cash.

Two quite impossible extremes right? But that's just how the system is now. You can have your own house, car and run your own business and still worry about how many more years you're left with paying to the bank.

But you know what? I know people who can buy car and houses CASH - by late 30s or so. Just today, I was talking to a senior colleague of mine, who earns, maybe at least 15k, and still runs a business with his wife part time, telling me, "You know, our final goal is to reach that financial freedom. Get out of these loans," I've also once talked to a Proton salesman who tells me that there are many (Chinese mostly) who just comes and pay him cash to purchase cars. Their excuse: "I don't want to pay all these extra money to the bank," . Today, Mr also told me that his Chindian friend can afford a Honda and a semi-D house cash just like that. It is not impossible.

In Islam, we are encouraged strongly, to avoid having any debts. But surprisingly, we are the ones in Malaysia, taking the maximum number of years of loan, and buying luxury cars and bungalow houses,  even with that unpaid study loans and credit card bills, leaving behind very little (or none) of savings. I've known A LOT of friends who spends half of their monthly salary on a car! HALF! That's a lot! You're earning 4k and you spend 2k on your car? Seriously?!? What a waste.

Knowing all these people attaining financial freedom is new to me. I've always thought that to be able to purchase houses and cars, you just gotta borrow money from the bank.  And it excites me that financial freedom is NOT impossible. You've just gotta aim higher, work harder, and STOP depending on help.

There's that community in Malaysia, called the Shia, which is a group of Muslims that choose to believe things differently from the majority of the Muslims  - there's a whole different topic about them - anyways, despite their misguided belief on the companions of our Prophet (or something like that), they are TOTALLY against bank loans. They've got their own community, where the rich will combine their money and lend them to those who needs it for business purposes for instance, and when this particular borrower has succeed, he will then be one of those who will lend their money to another party. And it becomes a cycle. No interests. No commitments. Just pure brotherhood and family relationship filled with trust. No space of being selfish but just helping each other out - a win win situation. They're usually the Indian Muslims and you can see how many of them run successful businesses here in Malaysia.

I LOVE the idea of being loan & debt free but I'm not sure which of the two extremes I can take in reality. I've stopped using the credit card and I purchased a cheap car and keep my car loan years to the minimum year,  and I do not take any loans for my part-time online business. I work hard, and pray that God would bless me with the ability to just pay this car loan off. But I still need to think of a house too!

Our ultimate goal is to also reach that financial freedom when I'm 40, even better, when I'm 30. We will work towards that. Challenging, but possible.

InsyaAllah, with even more blessings, I would even want to establish that system of lending money to those who need it but without any interest. At the end of the day, the money we get is from Allah, and is to be shared right?

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