Despite the Islamic prohibition on interest or riba, many, if not most Muslims have credit cards. While it’s possible to use a credit card and never pay interest by paying off the full credit card balance each month, it doesn’t always work out this way. Any number of situations such as emergencies, unexpected expenses, unstable income or loss of employment can lead people to carry a balance on their card and accrue interest on their debt. From there, getting out of debt can become a very difficult challenge.
Of all the things that observant Muslims try to avoid, interest is the most challenging. It seems impossible to get by in today's world without it. How do you finance your education, buy a home, start a business or get out of a jam when you can't borrow money with interest? What does Islam say about it? Is all interest bad? What is interest for? How does it work? What does it do to people and society?
Whether or not you invest in a Registered Retirement Savings Plan (RRSP), with the March 1 RRSP deadline around the corner, February tends to be the month Canadians talk about investments.
Investments don’t only help your money grow, they are also a good way to keep your money from losing value. Whether we realize it or not, money kept in a chequing account loses value over time due to inflation. Since prices slowly yet steadily go up, every dollar you save buys you a little less with each passing year.
For Canadian Muslims who want to invest in the stock market but don't have the confidence to pick halal stock investments on their own, the choices have always been limited. If you're looking to invest more than a few hundred thousand dollars, you can hire a financial advisor knowledgeable in Shariah compliant investments. If you're investing less than that, you can invest in a halal mutual fund, which charges management fees of 2.5% or more. That's it. So when Wealthsimple announced their Canadian Halal Investing portfolio in August of this year, it was reason to celebrate.
Asking people to trust you to invest their hard earned cash is a challenge in the best of times. Doing that in the wake of a major global financial crisis and asking them to invest in a brand new Shariah compliant mutual fund takes the challenge to a whole other level. But this is exactly how GlobalIman fund, Canada's longest running Shariah compliant mutual fund got started. And now, 8 years later, with in excess of 40 million dollars in assets under management, the Global Iman Fund is the investment of choice for many Canadian Muslims looking to invest and grow their wealth while adhering to the financial guidelines of their faith.
One of the best tools for savings and investment we have in Canada is the Tax Free Savings Account (TFSA). You might have received calls or emails from your bank about it or maybe you’re heard about it compared to a Registered Retirement Savings Plan (RRSP).
One of the biggest challenges Muslims face when it comes to reconciling their faith with their finances is home ownership. With house prices starting in the hundreds of thousands of dollars, how is it possible to buy a house without borrowing money through an interest-based mortgage?