Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)
When we use the word investment, it usually projects a succesful way for the future. Investment are usually associated with business investor, corporate people. How often we see that business investments assure the return on the profit of investments with certain amount of interest. In Islam interest are prohibited and through the development of Islamic banking, investments without interest are made possible. Sometimes these return on investment (without interest) have fixed percentage of rate which might look like interest. As a muslim we should always be aware on the differences between these two because of the similiarity we (muslims) might be doing the prohibited.
When should one start to invest? As I mentioned earlier, investments are always associate themselves with successful or high profit return. Therefore we usually think that it is safe to venture into these investments with having minimal funds. We have this mentality whereby to secure our financial future or after retirement, we need to invest. I am not trying to imply that investing is a dangerous thing to do. Investments will be beneficial if it is done in a proper manner. By investing, it also benefits the economy because of the circulation of wealth.
These business are usually run by a person or a group that have the idea and managing capabilities but do not have suffucuent funds to run the business. Therefore investor helps in initiating a business which consequently help the economy. (Surah al-Imran verse 180) "And let not those who hoard up that which Allah has bestowed upon them of His bounty think that it is better for them. Nay, it is worse for them. That which they hoard will be their collar on the Day of Resurrection. To Allah belongs the inheritance of the heavens and the earth. Allah is well aware of what you do."
As a middle income earners, the income are usually just enough to pay the bills. Some people starve themselves to fork out money (take a loan) to invest in order to secure the financial future. This, in my opinion is a very dangerous thing to do because the reality of investing failing. Hence, financial future are not secured and also ending up with debts. These debts will then force people to work outside their own field (ordinary way/qualification) and will be a forced labour just to cover their bills. This will effect on the productivity as people with certain expertise working with a non-related expertise. It will also effect on the morality of workers as people are often not happy with their job. Their unhappiness will gradually make them feel morally down and will make them turn to any sort of way to gain more money without considering if it is halal (permissible) or haram (prohibited). This will then cause further damage to the economy.
Back to the question of when should a person invest? It is best for a person who are wealthy to invest and not the middle earners. Those who are wealthy should invest appropriately (within the laws of Islam) to avoid negative effect to the economy. Those wealthy should also not demand their return on investments if the business aquire loss for they are responsible for their own investment. If the wealthy investor have the right to get an amount of profit, it is only fair for them also to acquire the loss. Their loss will not have any burden as it is not based on debts. This is what spending wisely means and not spendthrift.
We should only invest when we have EXTRA MONEY and not do any loan for investments. We have witnessed that Portugal, United Kingdom and etc have debts worth billions due to investment/bad investments which have a chain reaction to one another causing debts everywhere around europe/world. Therefore it is only wise to invest when there are often resources and not invest when there are limited resources which causes for them to seek loan for investing.
It is wise to do trading when investment is not possible. But trading will only be possible when there are capable investor. This is what circulation of wealth means in Islam. HELPING EACH OTHER! Rather than spending lavishly on luxury cars,handbags or golds, ir should be invested appropriately. We need to understand our individual role in order to improve the economy. Spend wisely and not spendthrift. This refers to a previous entry which include the verses of the Holy Qur'an on circulation of wealth. It does not always mean that we just need to sadaqah (give charity) to circulate wealth, investing appropriately in the laws of Islam is also another way to circulate wealth.