Money Makes Money?

the idea of let money makes money starts to penetrate into our society. our people starts to get use to a term called investment. in all definition of the word INVESTMENT, i like this term 'the use of money through various vehicles, or an individual's time and effort, to make more income or increase capital, or both'. look at the underlined words.

investment needs vehicles. to invest, you have to know investment vehicle that can bring you to your destination. prior to it, you have to know your destination. what is you target? why do you invest?

in physical life, if you wanna travel, first you have to know your destination, isn't it? then, why do you need to arrive at the destination. let say you wanna travel from KB to KL. you have many choices of transports. you may drive your car, ride your motorcycle, or bus, or plane, or even lorry, if you want. that's why you have to know your motive of traveling. if you wanna have a nice sightseeing, you may use car. if you wanna rest, you may choose bus. if you're in rush, plane is the best choice for you.

so goes with investment. you have to set your target before investing. for retirement? or for children's education? or to buy a car by next year? those target have to go through different investment vehicles.

the next point is your time and effort. of course you don't have to knock everydoor to collect your earnings but the effort here includes your studies, your knowledge, and what you do to provide you with knowledge to invest.

knowledge=simple. where does the money come from? what is the concept? and the most important is the CONCEPT OF INVESTMENT ITSELF!

if someone comes and offers you an 'investment' scheme that will guarantee return of 300% in a year, what would you do? and he shows the evident that many people became rich via the scheme. would you? i believe that 45% will say yes. this is totally ridiculous.

even if the evident is there but please.. please.. please.. if you don't know where the money comes, find another thing lah. it's like you wanna go to KL from KB by bas ulat.

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.