One of the women said, "O my father, hire him. Indeed, the best one you can hire is the strong and the trustworthy." | He said, "Indeed, I wish to wed you one of these, my two daughters, on [the condition] that you serve me for eight years; but if you complete ten, it will be [as a favor] from you. And I do not wish to put you in difficulty. You will find me, if Allah wills, from among the righteous." | [Moses] said, "That is [established] between me and you. Whichever of the two terms I complete - there is no injustice to me, and Allah , over what we say, is Witness."
28. Surat Al-Qaşaş (The Stories) 26-28
28. Surat Al-Qaşaş (The Stories) 26-28
The ayat tells of an option that Prophet Moses (alayhi salam) may opt to choose or ignore without any wrongdoing on his part. This interests me because how this may be applied to create a fair business practice. For example: You can pay me 80%, which should cover all my cost for me to continue my business. You may also pay an additional 20%, should you choose, so that I may be profitable and expand my business. One hundred percent optional. Different to excess or riba where if you purchase an item now with a credit card, pay a 20% interest/year over the 100% you are required to pay.
In a more complex application would be an option contract. Agreeing to a price of 100%, you may have the option to buy this item at 20%, should you choose to buy it, you can pay the remaining 80%. Should you choose not to purchase, the 20% becomes a fee by having the item locked for your purchase and not offering/selling to someone else.
So where am I going with this? The Pareto principle.
From Wikipedia: The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes <http://en.wikipedia.org/wiki/Pareto_principle>
The 80-20 rule can be applied to our personal finances. Banks prefer consumers have mortgage/rent at 20% of income. It is the rule of thumb or the moderate amount in payments. Meaning if you make $50,000/year, you should be paying $10,000/year or $833/month on your house or rent. The result of your 20% effort will result in owning a home, which for most people will probably be the biggest purchase and valuable asset (in 15 years $150,000, 30 years, $300,000). Imagine your savings account if you force to save 20% of income a year.
A good article to read: http://news.investors.com/investing...8-the-pareto-principle-and-savings.htm?p=full
Just thinking out loudly. Not part of my book. Hope it is useful.
