How to Earn Halal Money? The Money Mindset

Halal earning

Get Rich Or Die Trying? Nah.

While a big house and fancy cars are nice to have – and there’s nothing wrong with having nice things – material abundance should not be one’s ultimate goal. Allah ﺳﺒﺤﺎﻧﻪ ﻭ ﺗﻌﺎﻟﻰ put us on this earth to worship Him. A Muslim’s aim in life should not be to work to death in pursuit of a higher status and a bigger net worth. We all know this life is only temporary.

As it states in the Quran: “This worldly life is no more than play and amusement. But the Hereafter is indeed the real life, if only they knew.” [Al-Ankabut 29:64]

The fact remains, however, that one does need to pursue a halal income in order to provide for oneself and family. Allah ﺳﺒﺤﺎﻧﻪ ﻭ ﺗﻌﺎﻟﻰ  is ar-Razzaq, the Provider, but we still need to do our part. The bills aren’t going to pay themselves, and food won’t magically appear on our tables.

So how does one go about balancing deen (religious) and dunya (worldly) matters from a financial perspective? Here are six tips on how to approach money matters.

There’s No Wealth Like Halal Wealth

For starters, we should only pursue income strictly from halal means. Be wary of engaging in jobs or businesses that sell haram products, such as alcohol or interest-based securities. Be further aware of ensuring transparency and fairness in all your dealings; never cheat or defraud anyone (Muslim or not) for the sake of selfish or short-term gains. There is indeed no barakah in haram earnings. Allah ﺳﺒﺤﺎﻧﻪ ﻭ ﺗﻌﺎﻟﻰ  commands us in the Quran: “O my people! Give full measure and weigh with justice. Do not defraud people of their property, nor go about spreading corruption in the land.” [Hud 11:85]

Extra income should always be put to productive use, as hoarding is frowned upon in Islam. Don’t be a miser or get too attached to money and worldly possessions. What’s more, money kept under your mattress or in the bank actually loses value over time thanks to inflation. Inflation refers to the ever-increasing cost of living, which results in the loss of value of money. One way to avoid the peril of inflation is by investing to earn a profit to counter this inflationary loss. Thankfully today in many countries there are Islamic finance institutions and products for us to invest in. Increasingly, Fintech has brought forth new online platforms and services that allow investors from almost anywhere in the world to invest.

Islamic investment through crowdfunding is fast gaining in popularity, especially so for Property crowdfunding. Property investing and development projects have long been the preserve of the wealthy, due to the large capital required. Crowdfunding breaks this barrier by allowing a group of investors to come together online to each contribute different amounts to the campaign.

Ethis has facilitated investors from 65 countries to invest directly into housing projects in Indonesia to share in the profits of local Developers. Another prominent platform is Yielders from the UK, which focuses on buying rent-yielding properties in the UK. Just 5 years ago, such investment would only be for the rich, and now its open and accessible to even small or first-time investors.

There is even a robo-advisor called Wahed Invest that will identify permissible stocks, and a personalized service called Sharia Portfolio in which a professional will help you build a portfolio of investments based on time horizon, risk tolerance, etc.

Conventional banking products – such as savings accounts, certificates of deposit (CDs), and money market accounts – are interest-based and should be avoided. Corporate and Treasury bonds are also interest-based, although there is something called “sukuk” that is essentially the Islamic version of a bond. The return on investment for sukuk is not very high, but this is a less volatile investment option for those who want a relatively safe place to save money while also enjoying some gain.

Clean House Starting Right Now

If you happen to have money invested in impermissible investments such as bonds or CDs, or stocks in companies that sell haram products, then the best course of action is to dispose of those investments and give the earnings away as sadaqah. However if doing so results in losses that may be a heavy burden for you or your family, some scholars have opined that it is sufficient to make a clear intention to dispose of these haram investments as soon as it is more practical or less punitive to do so.

If you have credit card debt, which tends to have exorbitant interest rates, it’s best to adjust your budget to make it your top priority and pay it off as quickly as possible. Then make the intention to avoid credit card debt in the future.

We can also take this one step further and consider mortgages, as well. Since conventional mortgages are based on making principal with interest payments for many years, they are not Islamically-permissible due to the prohibition on riba. Again, if disposing of your property is a difficult option, then make the intention to clear this debt as soon as possible. It is also possible to refinance a mortgage with an Islamic home financing company like Guidance Residential or UIF Corporation. First-time homebuyers should be prudent and avoid buying more expensive properties to live in.

Keep Your Eyes on the Prize

While tracking finances is about as fun as watching rice cook, it’s necessary to track one’s income and expenses. Otherwise, more money may be going out than coming in. There are many tools and apps that make this task relatively easy.

Aim to think long-term. Instant gratification is fun for a while, but the novelty soon wears off when you are always broke and buried in bills. There truly is greater satisfaction in striving towards a juicy goal and accomplishing it through hard work and persistence.

Waste Not, Want Not

If we strive to do everything in moderation, doesn’t this also apply to spending habits and material possessions? While enjoying Allah’s ﺳﺒﺤﺎﻧﻪ ﻭ ﺗﻌﺎﻟﻰ blessings, it’s best to avoid excessiveness. And of course also avoid waste, as it is a form of ingratitude. As it says in the Quran: “…Eat of the fruit they bear and pay the dues at harvest, but do not waste. Surely He does not like the wasteful.” [Al-An’am 6:141]

Reflect on Your Blessings

Take some time every day to reflect on everything you are blessed with. Sure, life may not be perfect and you might be facing some difficulties, but things could always be worse. Besides, having gratitude can result in gaining even more blessings. There is science behind “positive thinking” – it works! Such is the mercy of Allah ﺳﺒﺤﺎﻧﻪ ﻭ ﺗﻌﺎﻟﻰ. “And remember when your Lord proclaimed, ‘If you are grateful, I will certainly give you more. But if you are ungrateful, surely My punishment is severe.’” [Ibrahim 14:7]

Increase Your Real Wealth

Lastly, give from what you have been given. This doesn’t have to be just monetary donations;  volunteering your time and talents is also a form of sadaqah. Remember, charity does not decrease one’s wealth. “…Whatever you believers spend in charity, it is for your own good – as long as you do so seeking the pleasure of God. Whatever you donate will be paid back to you in full, and you will not be wronged.” [Al Baqarah 2:272] The important thing is to have a clean heart and good intentions.

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Ethis Malaysia: Islamic Equity Crowdfunding
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We operate ethical investment platforms approved by regulators in Indonesia, Malaysia, and Dubai, and also run a charity platform Global Sadaqah serving ordinary people, high-net-worth individuals, corporates and government entities. Best known for crowdfunding impact investments for Indonesian social housing development projects we adhere to the United Nations Global Compact ethical standards and are based on Islamic finance.