Investing in Islamic Way
investing is not new in Islamic world. since the uprising of Islamic civilisation, Rasulullah and the Muslimin migrated to Madinah during Hijrah, they instituted co-operative investment arrangements, partnerships that held potential for a return on the money invested. The purpose of these and subsequent arrangements within the community have allowed Muslims to support each other and the community's businesses.
in fact, the Qur'an encourages believers to engage in beneficial trade and to invest. further Islamic teachings clarify how Muslims should invest and point toward equity partnerships. modern scholars note that the stocks Muslims buy should reflect Islamic beliefs as well as prudent financial choices.
Islamic law promotes investment through equity partnerships, in which investors own a share of net assets and share risk equitably with other investors. thus, investing in stocks is acceptable according to Islamic teachings. however, to invest in accord with religious beliefs, Muslims must evaluate the business activities of each company prior to investing.
easy, if the company's core business (or even side-business) involves gambling, alcohol, porn, pork or interest-based activities (riba'), the company shouldn't be considered to be an investment venue.because of the Islamic prohibition of paying or charging interest, companies whose interest-based profits or holdings exceed certain limits are forbidden.even when the interest-based activities are found to be within tolerable limits, investors must purify the earnings through donations to charity.
how to identify riba' or interest-based activity?
when we invest in certain company, the return shall not be guaranteed e.g. 50% per year. it might be predicted but it is not guaranteed. say, last year the return was 23% and this year it is up to 28% but nobody can say it is, until it is stated a day after. when comes to riba', the return is guaranteed, example, 2% per day, 120% per year.
according to fatwa, any investment with a guaranteed return is considered as riba'. and riba' is illegal in Islam.
as stated in al-Baqarah, Allah allows trading but prohibits riba'. as Muslims, do we want to let us and our family involve in this kind of investment and grow up with 'kabur' money?
there's many legal investment scheme. choose smartly.
in fact, the Qur'an encourages believers to engage in beneficial trade and to invest. further Islamic teachings clarify how Muslims should invest and point toward equity partnerships. modern scholars note that the stocks Muslims buy should reflect Islamic beliefs as well as prudent financial choices.
Islamic law promotes investment through equity partnerships, in which investors own a share of net assets and share risk equitably with other investors. thus, investing in stocks is acceptable according to Islamic teachings. however, to invest in accord with religious beliefs, Muslims must evaluate the business activities of each company prior to investing.
easy, if the company's core business (or even side-business) involves gambling, alcohol, porn, pork or interest-based activities (riba'), the company shouldn't be considered to be an investment venue.because of the Islamic prohibition of paying or charging interest, companies whose interest-based profits or holdings exceed certain limits are forbidden.even when the interest-based activities are found to be within tolerable limits, investors must purify the earnings through donations to charity.
how to identify riba' or interest-based activity?
when we invest in certain company, the return shall not be guaranteed e.g. 50% per year. it might be predicted but it is not guaranteed. say, last year the return was 23% and this year it is up to 28% but nobody can say it is, until it is stated a day after. when comes to riba', the return is guaranteed, example, 2% per day, 120% per year.
according to fatwa, any investment with a guaranteed return is considered as riba'. and riba' is illegal in Islam.
as stated in al-Baqarah, Allah allows trading but prohibits riba'. as Muslims, do we want to let us and our family involve in this kind of investment and grow up with 'kabur' money?
there's many legal investment scheme. choose smartly.
