As a Muslim, you have to ensure that your earnings are Halal. This is not only about earnings from business or employment, but ensuring the same on earnings from investments. Halal investing or Shariah-compliant investing is meant to protect five areas that include religion, intellect, life, family, and property. In this way, it creates a balanced ecosystem of social responsibility between society and the individual. Although you can pursue self-interest, you must do so with conscious of the interests of others. The following are foundations of Halal investments:
- Profit sharing
- Lawful activities
- Prohibition of gambling
- Prohibition of Riba
- Links with the real economy
- Ethical and moral values
Halal Investment Options
The following are the common Halal investments you should try;
These are publicly traded shares of businesses. In fact, they are the common investment forms of Muslims. The good thing about stocks is that they offer a wide range of company types and sizes. Also, they are liquid and allow investors to withdraw and contribute money in short periods. However, stocks are considered to be a high-risk investment as prices fluctuate significantly. You should note that few stocks do pay dividends and those that do so do at a low rate. Before buying shares, you have to ensure they are Shariah-compliant. You have to take time to screen the company’s stocks and continue monitoring to ensure the company remains compliant.
Direct business ownership is less common among Muslims. You can run the entire business yourself or partner with a group of people. The good thing about owning a business is that you have direct control over the business and you can enjoy high potential returns. This requires a considerable investment of knowledge and time to stay competitive in this market. The truth is that this is the riskiest investment type and it can expose you to lawsuits.
This is the most desired investment option for Muslims. However, most people find it difficult to invest in it because of lack of resources and knowledge. This makes it an option that is pursued by a few people. The good thing about real estate is a tangible asset that can serve as a hedge to inflation. Check them out and learn why you should invest in real estate properties. It can generate stable income at a higher level as compared to other investments.
You should note that cash is not an investment. Nowadays, a lot of Muslims hold a lot of money because they are not sure how they can invest in real estate, businesses, and stocks. Unfortunately, their savings are reduced by inflation.