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Top 8 facts about Islamic Finance


There has always been a demand among Muslims for financial products and services that conform to Shariah (Islamic Law). The development of viable alternatives to conventional finance increasingly enables Muslims with the estimated 1.6 billion Muslims worldwide, it’s ripe for growth potential to participate in the financial world without violating their Islamic principles and without bearing the economic penalty that comes from non-participation, especially with the recent growth of oil prices. Here are the following facts about Islamic Finance.


Islamic banking can be considered banking with a conscience. Islamic banks each have a Shariah board made up of Shariah scholars as well as financial experts who are responsible for determining what activities are and are not Shariah-compliant. 1

islamic banking sharia islam economy finance money management transaction concept


Islamic banking is based on two main financial principles. Firstly, investment is to be made in the private sector through interest-free financing. Secondly, the development of financial instruments is to be done on the basis of profit and loss sharing as well as sharing risks. 2


Islamic laws strictly prohibit investments connected with gambling, liquor or tobacco.

Islamic banks must conform to Sharia law and, as a result, to the following six principles:

  • They must not allow predetermined loan repayments to become interest (riba) – the receipt and payment of interest is strictly prohibited.
  • The sharing of profits and losses must be at the heart of the Islamic banking system.
  • All financial transactions must be asset-backed. In other words, making money out of money isn’t acceptable in Islamic finance.


Speculative behaviour is forbidden (and so options and futures are prohibited in Islamic finance). 4


The word riba in Islamic law means an addition over and above principal. So riba is the addition in the amount of the principal amount of a loan according to the time for which it’s loaned and the amount of the loan. In other words, it’s the equivalent of interest, but financial systems based on Sharia law strive to eliminate the payment and receipt of interest in all forms. 5

A range of modern interpretations apply as to why riba is forbidden, although they’re strictly secondary to the religious underpinnings.



hawala can be a bill of exchange, cheque, draft or promissory note. Hawala is a mechanism that can be used in order to set up international accounts by book transfer. To a large extent, this approach removes the need to transfer physical cash. Technically, debtors pass on the responsibility of payment of their debt to a third party who owes the former a debt; hence, the responsibility of payment is shifted to a third party. This arrangement is unique because no form of financial instrument is exchanged; the transaction takes place entirely on the honour system (a system based on trust, honour and honesty). Trust and the extensive use of connections such as family relations are the components that make it completely different from other remittance systems.6


Islamic banks are strictly forbidden to charge interest. Instead, the concept of profit and loss sharing comes into play. Islamic banks don’t charge interest but instead participate in the yield that results in the use of funds. Depositors also share in the bank’s profits, which are determined in accordance with an agreed ratio. Hence, a partnership exists between the Islamic bank and its depositors and also between the bank and its investment clients. 7

Islamic banks can’t make money with money, because under Sharia law money is only a medium of exchange – a way of defining the value of something – and it has no value in itself. Therefore, money isn’t allowed to generate more money by being put in a bank or lent to someone else.




When a Western bank or finance house invests in a project, the investor (the bank or finance house) is assured of a predetermined rate of interest and the investee bears all risk. The investor receives a predetermined return regardless of whether the project succeeds or fails.

This situation doesn’t apply in Islamic banking, which promotes risk-sharing between an investor and an investee: the unjust distribution of risk that occurs in Western banking is prohibited. In Islamic banking, the investor and the investee share the results of the project in an equitable way. Where a project makes a profit, both parties share in this profit in predetermined proportions. On the flip side, if a project makes a loss, the investor bears the loss by way of no repayments, with the investee bearing the loss by receiving no wage or salary. 8




As the Islamic finance market begins to experience full-grown, investors and banks are demanding new products and new structures that are complaint with Shariah principles. But while the products must be often syndicated with Shariah scholars, English and American financial lawyers are finding ways of making Islamic products work. This syndication allows the Muslims who recognize Shariah law to use and benefit from the Shariah-compliant financial tools at Western banks or companies.  Although there have been innovative initiations by Islamic financial institutions in several fields, like information technology, industrial projects, and even providing insurance against political risk, the industry still needs more innovative and sophisticated financial instruments taking advantage of western financial experience to streamline and standardize Shariah-compliant products.


Source: ArabInsightOrg



Your finances will be in a bad situationif you don't stop chilling with the wrong people (17)

David Isaiah Angway is a Registered Financial Planner, Chartered Wealth Advisor and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured multiple times in ABS-CBN News Channel show called On the money, Bloomberg TV Philippines First Up. He also writes for BusinessMirror,, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co. He is the CEO and founder of WinLongTerm Financial Consultancy, that helps organizations retain their top key employees such young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.


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Have you ever wondered why money is so hard to manage? I used to think about that a lot when I was just starting out. Then, later on in life, we discover techniques as to how to save money. We learn how to budget, we learn about the impact of investments, and we learn different ways of how to win long term. If you don’t know these things yet, we have several articles in this same website that talk about that, too. In this article, we’re going to talk about the things you must have before investing.




1. Purpose

When we see people invest, we are sometimes just astonished by how well they handle their investments. We are also given this drive to invest because we see the growth of their money. I mean, really? 9.5% PA? Who doesn’t want that? But guess what… it isn’t that simple. These people, like it or not, have a purpose as to why they are investing. As a Bancassurance Sales Executive. I’ve encountered people who handle their investments well. You know what their common denominator is? Purpose. They know WHY they are investing. Some are saving up for retirement, some are just adding a bit of growth for next year’s tuition fee, and some are already placing their funds so that their children and grandchildren could benefit from their money without the tax eating it all up. Whatever your purpose is, you need to know what exactly that is. The people who usually fail in investments are those who do not know why they are investing in the first place. “Growth” isn’t just going to cut it.
Each purpose has a different timeline, ergo, a different investment body. You might invest in the right fund with the wrong purpose. Don’t ever, ever make that mistake. Pray about it. Your money is meant to be handled with good stewardship.

2. Budget Discipline

Read up. Know your basic budgeting system. How can you invest if you don’t know how to make a budget plan? A budget plan is really important. I think, of all the 3 things in this article, this is the one you probably know about already. You need to be disciplined in following this plan.
I failed many times in this area. You know what my problem was? I knew how to make a budget plan. It was easy! It only took simple math! What was hard was applying it. It took GREAT discipline. Before making a budget plan, pray for it first and pray for the discipline that comes with it. You cannot do it alone. More often that, you’re going to compromise a budget plan for a simple want. Discipline yourself. Stick to the PURPOSE of the budget plan. If you want to know how to make a budget plan, refer to the other articles in this website that talk about it.

3. Emergency Fund

Many people think that this is savings. That is a big NO. An Emergency Fund is a fund that you build so that if an emergency comes along that will require a lot of money, you wouldn’t have to sacrifice your savings and investments. An emergency can put all your hard work down the drain. Years of saving and investing will get to waste if you do not have an emergency fund. This is the wall you build to protect your savings and investments from life’s uncertainties. If you do not have this, you are exposing your investments to more risks than it already has. An ideal emergency fund is 3-6 times the amount of your monthly salary. It’s going to take some time but you won’t regret it.
Remember, these things change with the times. Finance keeps up and changes every time. Make sure that you do, too. Because if you don’t study up and read every now and then, finances could be really tricky for you. Instead of money being a blessing, in might end up being a burden without correct stewardship.
To sum it all up, just make sure why you’re investing. Once you know why you need to invest, use that as a driving force to discipline yourself to create a budget that is required for you to be able to reach your financial goals. Once you are already consistent with the budget plan that you have, build your emergency fund. After you have all of these things, then it’s time for you to know more and to get yourself in the market because you are financially ready.
I pray to God that He will give you the discernment as to what your financial path is going to be. In the end, don’t let these 3 things hinder you if God is instructing you to do something else with your finances. After all, everything that we have, including our finances, are His. He has the final authority in everything that we do. I’ll let you in on a secret; this is the best thing that you could do with your finances: surrender it to Him. Let Him have the final say because that is the benchmark of being a great steward.
Jay Ganotan is a  Former Radio Jock at Jam 88.3 and currently a Bancassurance Sales Executive at BPI – Philam Life Assurance Corporation. He Studied Communication at De La Salle University

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My Top 12 personal finance blogs of 2015

Here are my top 12 blogs that captivated my readers this 2015. Thank you for spending time and never hesitate to comment, share and subscribe to this site. I’m looking forward to educate, collaborate and share to you my knowledge.
It is essential for everyone to plan for their paycheck while they are still young. Building effective habits will help fresh graduates to enjoy, maximize and prevent regrets in a long run while you are managing your finances every payday. You will also learn important tips how to counteract peer pressure when handling your moolah.
Rightstrategy will help you win long-term but if you are not really good in prioritization, this will surely derail you to achieve your dreams. This helps you to achieve correct thinking and categorize what is urgent and important.
If you think financial products will solve your problem, you are definitely wrong. You want to be well informed so you can decide what’s best for you and that is the role of coaches and advisors but you will see two important characteristics of this 2 position that can help you gain confidence in a long run in your personal finance.
Financial issues while you’re 20’s
Millennials are growing in numbers but the behavior is totally predictable, on this blog you will see the most common problem of the generation today and how you can counteract on it.
This yearly event can give you a lot of scoops about economy, sales, strength finders and upcoming trends in the financial industry. I learned a lot from Jonathan at this event and I would like to help ordinary Filipino understand the basics about the economy.
This is an honest, authentic letter in Filipino language (Tagalog) on how a lender trusted his friend to return the money back ASAP but still hasn’t got his money. You’re  probably stress with the money that you haven’t collected yet from those people who borrowed from you  but rarely you have guts to tell these things because you are afraid that this will hurt your image as individual, you don’t need to worry, writing what you got in mind is highly recommended to lessen your stress.  
I am proud to say that I am a Christian and longing to see a better world someday. I also believe that the God who created everything wants to see that one too. But I can’t do it by myself. Mission trips are definitely a way to share the gospel and exercise giving for a bigger cause.
You will never win if you don’t understand how the game of money works.
Kids are growing up without proper guidance in money management. We can’t blame them because most of the parents are clueless about it too. How do you bridge the gap in this society today? In fact, the skills and basic concepts can be learned so easily if you will focus on these concepts.
Are you tired of going on the same direction with your finances or you keep on failing yourself how to reach your financial goals, read this and you’ll be well guided.
It’s really sad that many people are getting scam without identifying these clues. Many are gullible and easy to be persuaded since human are highly predictable. Check on this blog and you will be ahead of the game of money not by chance.
5 years ago and you still haven’t got savings account. 2 years ago you promised yourself that you won’t be on the same direction but till now, you haven’t move for such a long time. Time to learn and how self awareness can help you to move from your comfort zone to a better place.
Your finances will be in a bad situationif you don't stop chilling with the wrong people (17)

David Isaiah Angway is a RFP and a financial consultant for IT-BPO-Banking, HealthCare Industry and Manpower Agencies. He is a conference speaker and was featured in ANC On the money, Bloomberg TV Philippines. He is also columnist at BusinessMirror, Rappler, and MoneySense magazine. He is a licensed nurse and a former Senior Fraud Specialist of the largest bank in the world, JP Morgan Chase & Co.


He is the CEO and founder of WinLongTerm Financial Consultancy, helping young urban and educated millennial (Gen Y). It sets and achieves their long-term financial goals by empowering them through behavioral finance.


For more information and concerns subscribe to Facebook page or contact me at, here’s also my mobile number 0925-787-7796

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Filed under Behavioral Finance, Finance Advocate, Financial Advice, Personal Finance, Scam

ANC Interview: “What to do with your first paycheck” by David Angway Registered Financial Planner

Key takeaways from on the money interview

Developing and nurturing your goals are essential but focusing on your behavior is way better to keep goals alive. You should have a S.M.A.R.T.E.R. goals. I added E. and R. to have a lasting impact which stands for Evaluation and Re-evaluate the goals, values, and behavior you have today.

Millennial generation should think differently and act way better than the previous one. I would recommend us to learn from the mistakes of the people who are ahead of us.

Chunk it down.

The IT-BPO industry is booming so they need massive number of workforce from different sectors. Your salary will give you a tool to increase your assets that will help you reach your financial goals. Set up a system and you are good to go.

Part time and free lance work are very interesting nowadays. Millennial is rising and work from home is trending.

Full time work still the grandfather of the employment system in the country today. In fact according to statistics majority of Filipinos are trained to work for an employer compare to being an entrepreneur.

I think if we want to remove the traffic in Metro Manila let us encourage everyone to work from home.  

Technology is making our world flat, that means the landscape of business and creating value can spread using the world of technology.

With the overflowing supply of nurses in the country today most of them are either in abroad or in a different industry.

Right questions will always lead you to right answers.
These 3 are not enough; you need another one which is a community that will support you with your investment strategies and thought patterns.

Here are On the money questions during the episode.

David Isaiah Angwaycurrently helps  young, urban and educated millennial (Gen Y) set and achieve their long-term financial goals by educating them about investments, asset allocation, risk management, retirement planning, and estate planning. His role as a financial planner is to find ways to increase the client’s net worth and help the client accomplish all of his/her financial objectives.
Disclaimer: All pictures belongs to ANC On the Money. All rights reserved Nov 2015

Behavioral Investing
Asset allocation

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WHY do I need financial planning


As a young professional today, you would like to change the status of your finances but you don’t know how. You have million thoughts on how to let your finances be revived again this year but you think it will be better to start next year. If you don’t have any idea where to start, I challenge you to do the something today or else you won’t improve. I am guaranteeing you that once you follow this program, give yourself an average of  10-15 years and am sure you will be able to reach the wealth that you need. It is not a quick rich scheme so you won’t be a scam. 
Knowing is half of the battle. Do this routinely and you will understand more of your behavior towards your finances. You should plan and don’t think average. Get a piece of paper or download a worksheet that has the following then compile and evaluate it weekly.

Start with why you are doing this?

If you can’t tell me your compelling reason then you can’t sustain everything below. Imagine yourself that you are going to have a diet plan for the next 30 days but during the 2nd day you don’t have the energy and willingness to follow the most powerful plan, like why you need to deprive yourself with your favorite food. Everything will fall apart, you are wasting your time, effort and energy with the planning stage if that won’t be put into action. Your compelling reason why you need to do that should not be yourself. Remember when you think about yourself as the end goal, you are thinking too small. You don’t want to think average like anybody. Poor people think about themselves all the time. Authentic Rich individuals think about opportunities how to help other people and that’s who you are and how you should be wired. 

When you start with Why, the How and what will follow.

Example of BIG WHY
·         To make sure I can be financially free and pass this legacy to my family.
·         To be an excellent steward when it comes to finances.
·         To support nonprofit organization and help campus missionaries.

1.       Budget   

This is the starting point of financial planning. You will fail with investing when you don’t know where your money goes. That means you will be running out of gas in the middle of a freeway if you don’t check your gas tank first. But I got good news for you. There is hope. Knowing how much you got so you can maximize what you have is the goal of continuous budgeting. Doing your budget for the first time might overwhelm you because there are so many things you need to include in a minimum amount. Remember that taking actions to your plan will solve the current and future financial issues that you will have. When you’re lazy to do your budget you won’t be able to finish the construction of your dream house. Managing your funds is a skill needs to polish.

2.     Emergency fund

Whenever I got my salary I put that directly into my emergency funds. The rule is simple if your needs expense per month is 10,000 then multiple it by 6. This is a very simple principle. Save for the storms of life (illness, accident, change tires or when you lose your job). Learn to prioritize this.  Do this early as possible so you can move to the next level which saving for your wants. Caution: don’t ever use credit card as emergency funds and you will dig your own graveyard (bankruptcy). 

3.       Saving goals

You need to at least give yourself  3 compelling reasons why you are saving funds or else you won’t stand a chance when laziness  struck you every time you got your salary.  Your goal is to learn during the journey, this is not about the end destination. When you focus in excellence, sacrifice and faith things will start change. Behavior will follow. Chances are you will hit your goal in a repetitive manner. Savings are for your extra needs and wants. Put 20% in the bank when you immediately get your income make sure that you already got emergency funds first. 

4.       Debt plan
Please don’t ever go to investment without paying your debt first which earns a higher interest rate. Your debt plan should include how much you need to pay for every single cent and when you will be debt free. The plan is you need to stick to it no matter what happened.  When you put it in paper you can see the big picture.  The reason why you don’t want to be debt free is very simple; you think everyone is in debt so you think you are in the zone.  Live like no one else so you can live like no one elsesays Dave Ramsey. Debt snowball is a really good strategy, you pay the debts that you can eradicate first and as you get the momentum it will be very hard for you to break it.

5.       Estate plan
You are accumulating a lot of assets now and your investment is off the chart. Estate planning is not only for the rich kids, it is for everyone that you love. Your legacy to your family is important even when you depart; no one will plan for your family so take responsibility for yourself. Be selfless and take time to check your current assets over liabilities. Remember that you don’t want to add up to the inconvenience of your family members once you evaporate from this world.   

6.       Insurance coverage

You are priceless but you need to identify how much you bring on a table. If you were able to identify that you are worth  7 million then get that coverage as long as the computation is correct. There is computation from the insurance industry like multiply your yearly gross income to 10. The computation might not be as accurate as the standard computation of today’s industry but it gave you a ballpark figure. What’s important is to get an insurance that is equivalent to you. You badly need this or else when something unexpectedly happen to you insurance company will help you and won’t let your family suffers.  If you got kids and wife but you are refusing to have insurance, you are putting too much risk financially and emotional aspects in their lives.  No one would like to see those things to happen. Be responsible.

7.       Investment

Everyone wants to get into this but many are being scammed because of poor diligence. Be careful all the time. First, list those things why you are investing,  second, you need to identify whether you got time, money and knowledge to identify the investments that you want then your risk tolerance should be define. Investing is a word that’s not just about higher ROI.  Are you an aggressive type or a conservative one? Regardless of your answer there’s no right or wrong. The purpose will give you the drive, without it you won’t last. Third, List the things that you are investing you want to achieve like education for your kids, retirement or build your dream house. Know the amount that you will be satisfied and consider to be happy.

8. Read Books, Attend seminars, join a Face book group and find a coach.

Never underestimate the value of networking and community. You should declare war against poverty, procrastination and poor mentality. Reading books will give you thought provoking ideas. Attending financial seminars like IMG conventions in Makati, Truly Rich Club, and Money summit every year can increase your network and expand your horizons. Joining Face book group will give you an all access pass with like minded people; you are welcome in contributing your thoughts. You can easily follow mentors who are expert in the financial industry that will make you more accountable with the results you are getting. All in all fresh and updated insights will give you new perspective to make you successful with no boundaries. You should revolutionize your thinking so acting upon it won’t be a struggle.

Your unique plan is totally not identical with anyone so don’t copy someone’s financial plan or strategy. How you manage your finances while you are working is a glimpse of your future financial plan during retirement. You can change your tomorrow today. With the help of our God who holds the future and your willingness to make sacrifice you are surely going to win long term.

Pictures courtesy of hubspot, the dollar business, learnvest, shutter stock, carmen marquez, imoney, img, go banking rates

David Isaiah Angway is a Financial Evangelist


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