In this Q&A on all things finance, we spoke with a leading Muslim entrepreneur, investor and author on what we can all be thinking about as we head into a tough economic downturn.
1. What is your background in finance?
I worked at HSBC Investment Bank earlier on in my career, I run Building Capital, a boutique Student Housing Group which has made tens of millions, I’m an Angel Investor in 22 companies and I used to write for The Financial Times. I also teach teenagers about finance once a month. No qualification as such, but finance is a big part of my life and work.
2. We are fast heading into one of the worst recessions of our lifetimes, what advice would you give to young Muslims to prepare financially?
Spend less as soon as possible. And think about what opportunities arise in a recession.
3. What advice do you have around saving in 2023?
It’s best to have one year’s household expenses in some form of savings – don’t save more than that because inflation will erode the value.
4. For those who don’t have much disposable income, what advice do you have to begin investing?
Invest in yourself – qualifications and skills – the two aren’t the same. Besides that, index linked funds are the way to go – low cost, sensible performance. Index linked funds – cost a lot less than their counterpart actively managed funds. In the latter, you’re paying for large salaries and bonuses. In the former, you’re simply tracking an index – the costs are much lower. Also most index linked funds beat actively managed funds – especially in the medium and long term. As they often say, you can’t beat the market.
5. What asset classes do you most recommend investing in at the moment?
Much of the traditional investment spaces / asset classes are vulnerable to falling in value as the UK enters a recession. Ideally, I’d say, buy very short term high quality bonds which at least cover the high inflation.
If you do buy into various asset classes, buy into them when prices are low, when markets are most pessimistic about something.
6. Getting on the property ladder for many young people seems like a distant dream, what advice would you give that may help?
Wait 4 months – the impact of the UK recession has still not been fully felt. When unemployment rises, as it must to soften inflation, that will be a time to start looking at reducing prices of real estate and you can take advantage of government supported buying schemes.
7. What are your thoughts around investing in cryptocurrency?
The most popular ones will do well especially BTC – it’s simply too well known to die – and it serves a very interesting function – as a currency which governments can’t easily touch or interfere with which is especially useful in developing economies.
8. What are your three best financial pieces of advice?
- Invest in yourself
- Think about entrepreneurship
- And remember that capital will always follow a good, well thought through opportunity, buy only index linked funds
9. Young Muslims are often disadvantaged due to socio economic issues, what advice would you give that will help them feel that they don’t have to feel held back in their careers and financial life?
Portray a vision of where you want to be in a few years time, it could be 3, 5 or 10 or whatever. Make sure it’s your vision. It comes from within. And absolutely nail that vision with hard work, perseverance and sacrifice.
10. As a community, there are many issues we are facing, what’s one thing do you feel Muslims should be spending more on / giving to, in order to help our community better its overall situation?
Stop building mosques and start tackling the community’s social, economic and political problems. We have a limited amount of capital. Yet we are starved with respect to tackling gender discrimination, under employment and Islamophobia
*Please note that MVSLIM does not represent the thoughts of Dr Saqib Qureshi and that this article is not investment advice, just thoughts based on his experience.*