Halal investments

Trade is encouraged in islam because it is a halal source of income in which ALLAH swt puts HIS blessings, if done with prescribed rules of islam. But everyone cannot do business because to do business needs a sharp mind set. For those who do not have enough income or who do not want to cause them losses can do investments. By investing money means to either start a new business or to invest money in an ongoing business.

To do business in a shriah based environment is a dream today, and to earn halal income from the halal sources of income has also become a dream. So what to be done if one wants to invest his money in a productive project where his money is kept in flow to generate legal revenue for him!

The best thing is to invest in ongoing projects or in any new business which is doubtlessly Islamic in nature. By Islamic in nature does not mean that it should be a trade of Islamic good etc. but it means that the business should not involve any riba or any other kind of unjustified earnings. Today many banks and financial institutions have opened in the name of Islamic business and tey attract people by using the name of islam. This thing should be kept in mind that any person whose source of income is not known to be halal should not be involved into business because whatever that person will invest will have riba in it. and even a grain of riba makes the money haram.

So, investing money in banks and taking profits on it is haram and unjustified. Secondly, some banks and financial institutions offer individual based businesses like buying of homes or vehicles and selling it further, here too, the bank does not have the pure money and from various studies it has been proved that buying through banks is always expensive than the open market. When we know we are buying expensive, are we not putting ourselves into loss knowingly! This argument could be countered that if one wants to be in loss he should be left alone, but by doing business knowingly will also encourage others to do business with banks etc which will not be good for the open market and it extremely harmful for the running economy.

Purchasing bonds and securities are another form of illegal investment. You receive interest on bonds as well as securities; the money earned on them is never called profit but coupon money. Illegal and unjustified profits do not make hala income.

Some people invest in shares, ulema has different point of view on this issue, some say invest in halal projects and some even reject that. The reality is, today any business going on does not show its details to even its board of directors, leave aside its share holders. Mostly, business earns enough profits but it does not give the share fo share holder by cutting the profit in annual reports. There are multiple complex set of accounting rules presented and followed to keep the max. money. The word “earning management” is used to “smooth earnings” as a legal provision so that businesses can keep money to themselves. This is not Islamic way of business. If you ask for the details fo the projects, you will never be told.

The better way is to make on the spot sale and purchase or any sale or purchase based on market prices. Like gold sale and purchase has much profit in it similarly currency exchange, building and buying houses and then selling them. These are those businesses which exclude any chances of riba and offer only halal earnings.
To keep ourselves away from illegal or unjustified doubtful income has become very difficult today because overall economic system is riba based, but one can keep himself away from haram earnings by taking care of his own choice of investments.

The best investment is with ALLAH, we should not forget the needy because today if we give them 10 rupees, in hereafter that 10 rupee will return us 70 rupees.
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