Recently I have been thinking of investing a small amount of money & I was thinking of investin in stocks & shares.
Mu' meneen Brothers and Sisters,
As Salaam Aleikum wa Rahmatullahi wa Barakatuh.
(May Allah's Peace, Mercy and Blessings be upon all of you)
One of our brothers/sisters has asked
this question:
assalamalikum
Dear Brother in Islam
Recently I have been thinking of investing a small amount of money & I was
thinking of investin in stocks & shares. But I dont want to do anything
which is haraam or earn money which is not halal. please advice, if one invests
in Islamically ethical shares (i.e not involving pure riba, haram products like
alcohol etc ) what is the consensus on this. A question which keeps arising in
my mind is that the basis of everything nowdays is riba) so please advise.
My second query is regarding buying a house on mortgage - this is for personal
use etc since i live in
Please advise.
jazak Allah Khair
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Answer:
Shares and mortgage
In the name of Allah, We praise Him, seek His
help and ask for His forgiveness. Whoever Allah guides none can misguide,
and whoever He allows to fall astray, none can guide them aright. We bear
witness that there is none worthy of worship but Allah Alone, and we bear
witness that Muhammad (saws) is His slave-servant and the seal of His
Messengers.
Your
Question: I was thinking of investin in stocks & shares.
According to the view of most
scholars in Islam, investment in shares and/or the stock market in its essence
is permissible in Islam, provided the following guideless are honored:
The three main factors that make
a stock haraam according to the scholars is as follows:
1. The company
should not deal in a product which is declared haraam in its essence in
Islam. Eg. alchohol,
prostitution, usury, pork, etc.
2. The company
should not deal in a product which is used to harm a muslim country. Eg. Arms manufacturing in a pagan country,
etc.
3. Only the pure
buying, holding, and selling of lawful stocks is termed permissible by the
scholars. All types of other derivative
transactions like buying ‘options’, ‘shorting’ the stock, buying ‘calls’, selling ‘calls’, buying ‘puts’, selling ‘puts’, or ‘straddles’, or any other variations and derivatives are
not lawful.
Your Question: My
second query is regarding buying a house on mortgage - this is for personal use
etc since i live in
Please advise.
Allah says
in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:
But
those who devour ‘riba’ become like the one whom Shaitaan has bewitched and
maddened by his touch. They have been
condemned to this condition because they say,
“Trade is just like ‘riba”, whereas
Allah has made trade halaal and ‘riba’ haraam. Henceforth,
if one abstains from taking ‘riba’ after receiving this admonition from
his Lord, no legal action shall be taken
against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after
this, he shall go to Hell, where he
shall abide for ever! Allah deprives
‘riba’ of all blessing and develops charity,
and Allah does not like an ungrateful,
sinful person.
Allah says further in the Holy Quran Chapter 2
Surah Baqarah verse 278:
O Believers!,
fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you
by Allah and His Messenger!
Allah says in the Holy Quran Chapter 4 Surah
Nisa verse 161:
That they took ‘riba’, although they were forbidden. And that they devoured men’s substance
wrongfully. We have prepared for those
among them who reject faith a grievous punishment (of Hell Fire)!
Al-Tirmidhi Hadith 2827 Narrated by Abdullah ibn Mas'ud
Allah's Messenger (saws) said, "Even
though usury be much, it leads in the end to penury."
Al-Tirmidhi Hadith 2829 Narrated by Ali ibn AbuTalib
Ali said he heard Allah's Messenger (saws)
invoke the curse of Allah on those who took usury, those who paid it, those who
recorded it, and those who refused to give sadaqah.
Dear and beloved brother in Islam, it is neither the
taking out of a loan nor a mortgage which by itself is unlawful or prohibited
in Islam; what is unconditionally and specifically and categorically prohibited
and absolutely unlawful in the Sight of Allah Subhanah is the ‘interest’
element in the conventional interest-based loans and mortgages.
There is absolutely no harm in Shariah if one wishes or
needs to take out a loan or a mortgage to fulfill their needs, provided the
loan/mortgage is Shariah compliant and thus free of interest; but to indulge in
an interest-based loan or mortgage would be absolutely against the Guidance,
Commands and Boundaries of Allah Subhanah.
Dear and beloved brother, buying a house to live in this
short and transitory world is definitely not an obligatory duty of a believer;
but obedience to the Commands and Guidance of the Lord Most Majestic is indeed
an absolutely obligatory duty of every believer who sincerely believes in Allah
and the Last Day!
Thus if a believer wishes to purchase a house for himself
and his family to live in, and wishes not to ignite the Wrath and Anger of
their Lord by dealing in the prohibited, here are his lawful options:
But under absolutely no circumstances should a believer
who sincerely fears Allah and the Last Day risk the everlasting and eternal
Gardens of the Hereafter in lieu of some paltry accommodation in the life of
this short and transitory world by indulging in the abomination of ‘riba’,
which has specifically been declared as unlawful by Allah and His Messenger
(saws)!
Whatever written of Truth and benefit is only
due to Allah’s Assistance and Guidance, and whatever of error is of me
alone. Allah Alone Knows Best and He is
the Only Source of Strength.
Your brother and
well wisher in Islam,
Burhan
