Investments

I choose to make investments in accordance with Islamic Laws, also known as “The Shariah”.

Basically what this means is that I cannot utilize debt to finance an investment deal. Equity financing on the other hand can be utilized, due to an element of profit & loss to be shared on the buy and the sell side.

Debt instruments do not have the element of profit and loss rather it has only profit for the one issuing the debt. The other issue with debt at least in the USA is that, debt is generated by Banks which have fractional reserve lending. Fractional reserve lending is a method that allows banks to lend 90% of your total deposits and then generate a profit on it.

According to Islamic beliefs this is not permissible because the bank doesn’t rightfully own the money and usually they invest the money into assets that Muslims cannot rightfully consume due to religious beliefs.

The main source of these teachings come from what are known as the Books of Hadith, (Books of the Teachings of the Prophet Muhammad Peace be upon him). There is one book in particular where a majority of the rulings related to business come from and that would be known as Kitaab Al Buyoo, translated it means The Book of Business.

In Islam if we have questions pertaining to finance, investing, or any other matter we first speak to scholars who can guide us and give us a clear understanding of the interpretations of the original text, referring to the books of Hadith and the Qur’an, and if there is no clear answer we usually go to another tier of scholars specializing in whatever topic they are known for, and get them to issue a ruling if one doesn’t exist, formally this is known as a “Fatwa”.

This is very similar to our justice system in the USA where individual Supreme Court Justices can issue their opinions and then a law is decided by a vote and is then passed when it goes through The Senate, and the House of the United States.

As you can see in many ways our justice system in the United States has portions of it modeled after how the Muslims have established their legal systems.

Here is a list of my Investments & Case Studies