Grow your Money when even at Sleep in a Halal Way!
10 Things to be Considerd when Choosing Any Investments Especially In a Halal Way,
1.Goals & Purpose:
Having the Intention to Grow One’s wealth in the Shariah Compliant Manner Important, Others Include : How much Money we can Invest, How Much Return Expected, Exit Strategy, etc.,
Purpose Important too, why the investment, Is it for regular passive income, or long term appreciation or both? Or Kids Education / Holidays of the Life Time? To Buy the Dream Home / Car / etc., Each Purpose’s Investment Strategy will Different. (These Kind of Desires are Completely Halal, As long as this does not get in the way of remembering Allah).
2. Halal / Shariah Compliant?
Investment that are certified halal / Shariah Compliant we can straightaway invest. There are some investments including share / properties / businesses, for Shares there are funds globally, which helps you to invest and manage.
There are few software in the market including ideal rating, which helps you to screen the shares for shariah compliance.
For properties it’s quite straight forward, if it involves in non halal activities or finance not based on conventional method, it’s considered halal.
In Singapore Residential properties no choice we’ve to use only conventional financing, due to CPF involvement etc., There is a fatwah, since to live we need the roof above your head needed, based on Darurah it’s permissible one house, some scholars says totally it’s not permissible, due to interest element involvement . All of Muslims owns residential property using conventional method of finance in Singapore unless it’s fully paid.
To get rid of the situation to pay as quickly as can or to downgrade by selling bigger home to buy smaller home to pay fully the loan, let’s pray and dua to Allah to get rid of interest payments.
For other properties (Commercial & Industrial), there are choices available for Islamic Loans, again we’ve to be analyse and think about the rate of profit, income from the tenants, property tax, maintenance, future tenantability, potential capital gains & enbloc opportunities. If correcly chosen, your investment will become really the Goldmine Inshallah! Also any capital gains received completely tax free.
3. The team: It’s important who is behind the scene, their experience, past track records, and their beliefs, if it involes collectively investing in properties / Funds.
4. The Location: Location of the funds determines the Taxes, currency stability: For the properties too, location is important for quickly replacing vacating tenant, increasing the rent, appreciation etc.,
5. Charges ( Important): This is another important considertation we have to consider when investing, if the fund manager charges very high initial charge, sales charge, peformance fee etc. then the result will be they are the ones who will ultimate benefits, On the Property side we’ve consider, Maintenance, Service Charges, Property Tax, Brokerage etc.,
6. Exit Strategy: This is important to, make sure funds are they aligned with your requirements / time frame etc., Also for properties, need to choose which are easy to exit, in the times of monetary requirement.
7. Past Track Records (Years, Performance): This is another important consideration for funds, again for properties too, past rental, appreciation need to be considered.
8. Eligibility( Accredited investors / entry level investment): Some funds / Investments only available to High net worth investors, also there are investments requires minimum required investment in the beginning.
9. Managing the Investment: Managing is important, periodically must track & measure the performance, growth, returns etc. Periodically say atlease once a Month , Can’t leave it to chance...
10 . Action: Do your Best, Leave the Rest to Allah: Action & Decision may not be correct always, all the rizk comes from Allah, our job is to do our work with good niyath. Again should not repeat the same mistake, there is an Hathees saying a muimeen won’t do the same mistake twice…. We learn from Action, if it’s positive, Say Alhamdulillah & we’ve to look for avenues to Improve it Constantly. If it’s negative again we’ve to Say Alhamdulillah and learn the lesson from it, it’s Allah’s wish, Allah May give rewards as a trade of the worry and sorrow we endured due to the negative result or he may wipe out some of the Sins we did, Just Say Inna Lillahi and Move On..