What is Halal Investment?

  Learn the way Muslims can accumulate wealth in such a way that they do not go against the practices of Islam.

What is Halal Investing?

Halal investing is merely investing in those businesses which are acceptable to Islam (Shariah). This involves a need to avoid:

Interest based income (riba)

High risk gambling (gharar)

Companies that produce haram products (e.g. alcohol, pork, gambling etc.)

According to Islam, all the sectors in the life of a Muslim are to be clean and legitimate such as money. Halal investing helps you to make your money in a spiritually sound and safe manner.

What is a Halal Investment?

To be a halal investment, it has to adhere to the following major rules:

1. There is no Riba (Interest).

Income that secures interest is prohibited by Islam. Therefore, no investment in the traditional banks, savings, or fixed interest bonds is permitted.

2. 🚫 There is no Gharar (Uncertainty or Deception)

Islamic investing will not enter into contracts with too much risk, uncertainty or cheating. To give an example, it is not halal to invest in get-rich-quick schemes, gambling apps or in stocks which are very speculative.

3. No Haram Businesses

The income of a company should not be earned through the banned operations such as:

Alcohol

Pork

Gambling

Adult entertainment

Traditional financial services (such as interest lending)

Though a company may otherwise be successful, given that the company may receive a considerable part of its revenue through these haram activities, then it cannot be included in the halal portfolios.

Examples of Halal Investment Options

🟢 1. Islamic Mutual Funds

Such money is only invested in Shariah-compliant corporations. Islamic scholars and financial experts review them on a regular basis.

🟢 2. Halal Stocks

You may invest in the shares of companies that comply with Shariah: such companies provide halal goods, and their debt is low.

🟢 3. Real Estate (Interest Free)

The purchase of property to rent or sell is also halal; it is not necessary that it is funded by interest loans.

🟢 4. Gold Silver and Commodities

You may invest in precious metals, provided that the buying/selling transactions are conducted according to the Islamic rules (immediate delivery, no speculation).

🟢 5. Online Halal Businesses

Another good way of halal investing is running or investing in ethical, online startups, e-commerce or halal products.

Are Cryptocurrencies Halal?

This is a controversial issue. Volatility is another issue that causes some scholars to forbid trading in mainstream cryptocurrencies (such as Bitcoin), yet others allow trading in them as long as it is done responsibly. Never invest without consulting a scholar.

Halal Investing Advantages

Make a profit with barakah (spiritual blessing)

The feeling of satisfaction that your sources of income are moral

Create a halal capital over the long term

Do not be in spiritual debt because of haram income

Final Thoughts

Halal investing is not only about money but it is a spiritual process. It will enable you to increase your wealth without disobeying Allah (SWT). Halal investing is the way to go whether you are new to your financial life or you want to clean up the investments you already have.

O ye that believe! eat not up usury, doubled and multiplied; but fear Allah that ye may (really) prosper.

And they are the ones who are going to be rooted out (Qur 3:130).

Invest the halal way now and enjoy your dunya and akhirah.