Idea of investing

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.

Spendthrift or spend wisely

Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)

Surah Al-Jumu'ah verse 11 "Yet no sooner than they saw some trading or amusement, they flocked to it and left you standing by yourself. Tell them: "That which is with Allah is far better than amusement and trading. Allah is the Best Provider of sustenance." "
Although this incident refers to a trading caravan which had arrived in Madinah from Syria exactly at the time of Friday Prayer, it indicates a kind of weakness of faith or their wilful preference for worldly benefits over the Hereafter. Even though we are encouraged to earn an income, we should not be obsessed with it (or be materialistic) and should live according to Islamic principles of circulating the wealth.

Ferrari 430 in my neighbourhood in Malaysia

It is evident that we see today some of us live luxurious life. Some who are wear handbags that might worth millions, some who upgrades their luxury cars just to make it look "nice" or to showoff.  The wealth is then not being circulated but is being stucked to the rich. Although the money is being transferred from one to another in the transaction (of buying the handbag/spending on the car), the asset/entity is stucked to that particular rich person. This will be a sort of symbol where "I" (the rich person) can afford and "you" can't! Gradually this will come to a stage where it is provoking the poor. Therefore it is advisable for a muslim not to spend extravagantly according to the verse of the Holy Qur'an "(The true servants of the Merciful One are) those who are neither extravagant nor niggardly in their spending but keep the golden mean between the two;" (Surah al-Furqan verse 67). "Do not keep your hand fastened to your neck nor outspread it, altogether outspread, for you will be left sitting rebuked, destitute. (30) Certainly Your Lord makes plentiful the provision of whomsoever He wills and straitens it for whomsoever He wills. He is well-aware and is fully observant of all that relates to His servants." (Surah Bani Israil verse 29). The Arabic idiom 'to keep one's hand fastened to one's neck denotes' miserliness and 'to outspread it, altogether outspread' denotes extravagance according to Sayyid Abul A'la Mawdudi.

Pininfarina near my neighbourhood in the UK

"Allah has favoured some of you with more worldly provisions than others. Then those who are more favoured do not give away their provisions to their slaves lest they become equal shares in it. Do they, then deny the favour of Allah?" (Surah Al-Nahl verse 71) In this verse, people are reminded of an actual fact of life where they do not share their wealth even if it is not theirs (which has been bestowed upon them by God). This verse supports the the symbol of "I" (the rich person) can afford and "you"(the poor) can't because of their fear of being equalled to the poor. This also leads to these certain group of people who believe that they deserve more to be protected (i.e gated community, bodyguards and etc) because they consider themselves better or richer.

We need to remind ourselves that the economy revolves around everyone, not only leaders even though leaders are given the authority/power. By spending appropriately it does not only benefit individuals but the performance of the country will be improved. Ibn Khaldun explains that over indulgence of materialism causes people to abandon religion resulting in the disintegration of a nation and government.

Let us remind ourselves that we have obligations to fulfil and should always look at the bigger picture (the whole community) rather from a narrower persepective (individual).

Surah Bani Israil verse 26 "Give to the near of kin his due, and also to the needy and wayfarer. Do not squander your wealth wastefully"

Applying Ibn Khaldun's theory on the consequence of PTPTN

Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)

From my perspective, there are a few problems on the implementation of PTPTN (tertiary student loan). First, they try to portray themselves as Islamic by posting this hadith on their website: Narrated Abu Huraira : The Prophet salallahualaihiwasalam said, "Whoever takes the money of the people with the intention of repaying it, Allah will repay it on his behalf, and whoever takes it in order to spoil it, then Allah will spoil him." If I am not mistaken (if I am wrong I do apologise) they also have quoted verses from the Qur'an in their letters to 'scare' those who loaned from them so that they would get the repayments back. They (PTPTN) quoted verses like, "Believers! Fulfil (all) obligations. ..." (Surah al mai'dah verse 1) "Believers, why do you not profess that which you do not practise?" (Surah al-saff verse 2) "... And fulfil your covenant, for you will be called to account regarding the covenant." (Surah bani isra'il verse 34) or " And fulfil the covenant which you have made with oaths after having firmly made them, and after having firmly Allah your witness. Surely Allah knows all that you do." (Surah al-nahl verse 91) How often do we get contracts today with the sentence Bismillah?

Islam do not only revolve on these certain verses and the teachings are not one verse doctrine. The Qur'an has many verses and these other verses cannot be neglected as it is part of Islam. Here are some other verses that opposes the conduct of PTPTN. "As for those who devour interest, they behave as the one whom Satan has confounded with his touch. Seized in this state that they say: "Buying and selling is but a kind of interest," even though Allah has made buying and selling lawful, and interest unlawful.". (surah Al-Baqarah verse 275) Even though PTPTN quotes the hadith above, they have avoided this particular verses of the Holy Qur'an by charging interest of 3% and now apparently 1%. They have deceived the people by claiming or portraying themselves as Islamic by quoting the said hadith.

Furthermore, there is another verse which says "But if the debtor is in straitened circumstance, let him have respite until time of ease; and whatever you remit by way of charity is better for you, if only you know." (Surah Al-baqarah verse 280). As soon as completing the studies, student often receive letter from PTPTN stating the amount needed to be repaid without even taking consideration if the student is employed or not. For those who have loaned for years will also be blacklisted from going out of the country until they have repayed their loan. If they plan to travel out of the country, they would then have to pay back ALL of the loan INCLUDING INTERESTS/USURY.

Another verse that should be taken into consideration, "Believers! Do not devour one another's possessions wrongfully; rather, let there be trading by trading by mutual consent; and do not kill yourselves. Surely Allah is ever Compassionate to you." (Surah al-nisa verse 29) The expression "wrongfully" embraces all transactions which are opposed to righteousness and which are neither legally or morally reprehensible. "Mutual consent" means that the exchange should be free of undue pressure, fraud and deception. All this is not my own interpretation of the verse. It is the interpretation of a scholar Maulana Sayyid Abul A'la Mawdudi. Therefore, a contract with interest is definitely devouring another's possession "wrongfully"!

PTPTN should not portray themselves as Islamic or use hadith because they are only contradicting themselves, preying on students who are lack exposure on business or contractual knowledge.

In the UK, there are student loans. The loan does consist of interest due to no prohibition from their "religion" or due to secularism, they are more considerate on certain things. Having said that, the way the repayments are being 'collected' are determined by certain circumstances. Such as below:
1. After completing studies, repayment of the loan is applicable only AFTER the student is being employed and their annual income has to be above certain amount (ie £15,000 per annum). Therefore, if the student is working part-time or working with an income below the amount, the student IS NOT required to pay anything unless they chose to do so themselves.
2. After 10-15 years, if the loan has not been repaid, the loan will be cancelled off. It means that loaners do not need to repay anything due to not having/getting the appropriate job.

Number 1 is vital and is in line with surah al-baqarah verse 280. Number 2 is not really important to be implemented in the contract from an Islamic point of view because there are possibilities of student having the 'niyah'/intention of not repaying the loan even before signing the loan contract. However, if PTPTN is willingly to implement it (number 2) onto their contract, then there should not be any problem.

With the current situation, PTPTN is not being Islamic in their implementation and it lures students/former students into 'forced labour'. This is because 'loaners' feel the need to get any job just to pay their loan. The job opportunity is not really helping the student to get their ideal job and therefore have no choice but to accept any jobs available to pay the bill. Ibn Khaldun has his own theory on the consequence of forced labour. "If they are obliged to work outside their own field and are used for forced labour unrelated to their (ordinary way/profession/qualification/desire) making a living, they no longer have any profits and are thus deprived of the price of their labour, which is their capital (asset). They suffer, and a good deal of their livelihood is gone, or even all of it. If this occurs repeatedly, all incentive to cultural entreprise is destroyed, and they cease utterly to make an effort. This LEADS TO THE DESTRUCTION AND RUIN OF CIVILISATION."

The point of bringing this matter up is not to say that PTPTN has no rights in claiming back their loans. But in fact, the way they are using Islamic quotes make it sound as if Islam only revolves around the particular Qur'anic verses/Hadith when in actual fact, there are other ways on how PTPTN can do to reclaim their loans back (for instance to not charge any interest etc). So, it is not a great step to use Islamic quotes when they themselves aren't Islamic about the loan contract. If PTPTN drags on with their actions, it does not benefit Malaysia with more intellectuals but in fact creating more intellectuals not working in their field which will have an negative impact on the economy. When there is an impact on the economy, gap between rich and poor will be great, the poor will be enslaved and will then rebel. This is when there are protests, riots and we will see everything start from scratch again.

The essentiality of Islamic credit cards

Bismillahirohmanirohim (In the name of Allah, the Most Merciful and the Most Compassionate)

Credit card is being used commonly in this point in time. As we know credit card originates from the conventional banking which allows one to use money in advance and pay it by installments from time to time with additional interest charges. So the first question will be that does Islamic credit cards exists? How does it exist without charging interest?

Technology and human intelectual have allowed us to use these credit cards avoiding the usage of interest. In Malaysia it is based on Bay al inah principle. I have mentioned earlier in one of my entries that Bay al inah is only commonly used in Malaysia and not in other Islamic countries. I have explained a little on Bay al inah in my previous entry.

So the things that were haram is being elevated and becomes halal. From my perspective is that, Islamic banking shouldn't always be associated with technical terms just to justify that it is halal. Islamic banking should always be associated with good morality, caringness and especially fear towards the Creator for any misconduct. One of the reason that Allah has prohibited interest/usuury is because it will lead to oppression as I have mentioned earlier in my other entry. If one were to calculate for example £1 is borrowed at 5%1000 years, the new total would be £1,546,318,920,731,950,000,000. Look at the big difference! Logically no one would make a loan for 1000 years but a person would apply for a loan for thousands or millions of £ in a shorter time length. So I don't think it is it fair to be paying and earning interest because one will have a problem of paying the loan and the person who earns the interest will receive money based on time. This is the kind of oppression  that I am focusing on which is the rich will always/easy become rich and the poor will remain poor.

So, is Islamic credit card in line with the values of Islam as it is certainly has nothing to do with interest? I will be focusing more on the values and morality rather than the technicality of the credit card. It is obvious that risk management is important especially in banks as it involves or deals with huge sum of money everyday. Therefore, banks will only approve credit cards to those who are 'reliable'. 'Reliable' in this sense would mean those who can afford. People who can afford to pay their credit cards will reduce the risk of banks not getting paid for their services, meaning banks are assured payment every month. So, what happens to those who can't afford? Here, one can see that there is a difference between those who are rich and those who are less capable financially. Those who are financially capable would feel easy to get/earn/use more money as they have more privileged, whereelse the less capable are blocked to use these credit cards. In my opinion, this is a kind of oppression, whereby the rich is given the privilage/advantage when actually the poor are in need of the money. One could identify here that the wealth distribution is not being observed in a proper manner. When wealth distribution is not properly observed, it will cause an economical imbalance. It will also cause differences in status between the rich and poor which is not in line with Islamic values.

I have spoken to some who have knowledge on Islamic banking concerning this issue and their reply to me is that there are other forms of financial instruments or facility for the poor to use. These other financial instruments or facility will require one to start a business or equity financing which is  totally different from credit card as it is not an 'easy loan'. Hence, the less capable is being segregated from using credit cards.

These credit rating are causing oppression towards the poor because of them being less capable financially. If one were to refer the history when John Calvin, a pastor who broke from the Roman Catholic Church because of the usage of usury/interest. His interpretation of the bible on usury/interest was that, it was 'ok' to charge interest towards the rich but not to the poor as there will be no oppression to the poor. What he did not realise was that it will cause an economical imbalance and segregation between the rich and the poor which also is a kind of oppression. Consequently, my opinion is that even if Islamic credit card is technically halal, morally it is no difference with  John Calvin's understanding of oppression.

Usury in bible : "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as and usurer, neither shalt thou lay upon him usury." (Exodus 22:25)

Technology have changed our lives and personally I don't see the need for Islamic credit cards. We now have debit cards which is convenient to use and it deducts straight from the account. Some banks have also allowed overdrafts which means, one could use a certain amount even if one did not have the money in the account. The banks will only charge an adminstration fee after a certain amount of time which is not usury/interest because the amount is fixed. Therefore, from my personal point of view, Islamic credit card is not an essential financial instrument as seeing it in the term of Islamic values.

Should the security guard/fence be implemented?

Bismillahirohmaneerohim (In the name of Allah, the Most Merciful, the Most Compassionate)

The community where I used to live back in Malaysia have set up these "security gates" in certain areas. The particular place where I used to live is a place of mediocre families. Now security gates are needed for certain areas. The area now is covered with fences/walls and has only one way in and out from the area. It only allows cars with a particular "sticker" in the car to enter the area. For this security to be implemented, the houses involved within the fences need to pay certain amount of monthly fees to the security guards. These "security fences" are becoming trendy/popular in certain parts of Malaysia.

These "security fences" are being set up to protect the community. My main question is what are these fences protecting the community from? It is understood that these fences are built for the community's safety within the fences because of the increasing crimes -burglaries and robberies. In Islam it is important to mitigate/lessen risk, since the early days of humanity, mankind have faced will all kinds of risk and it is important to strive and overcome for survival. As mentioned in surah al-mu'minun verse 115

"Did you imagine that We created you without any purpose, and that will not be brought back to Us?"

and surah al-ankabut verse 2 "Do people think that they will be let go merely by saying : "We believe," and that they will not be tested,"

Therefore we should reduce our exposure towards unwanted/uncertainty things. Hence, the set up of the security fences. In my opinion, there should be another step/action before the fences are set up. Firstly, what is causing in the increase of crimes-burglaries/robberies? My opinion is that the gap between the rich and the poor are getting bigger. The poor/less fortunates envies the rich and are looking for a fast solution to be "rich". Is it wrong to be "rich"? After all the hardwork that they've done, surely they are entitled to it. The thing is that the less fortunates do not see all the hardwork done and all they see is the fancy cars, houses and accesories. Hence, they become envious of the "rich". Even though the fortunate ones are entitled to be "rich", have they contributed enough to help the less fortunates? In my opinion the big issue here is the unbalance of wealth distribution in the community. Secondly, there is the "show off" attitude from the "rich" ones which I will write an entry about it in the future, insha'Allah.

Anyway, getting back to the wealth distribution, Allah has stated in the Holy Qur'an Surah al- Hashr verse 7:

"Whatever (from the possessions of the townspeople) Allah has bestowed on His Messenger belongs to Allah, and to the Messenger, and to his kinsfolk, and to the orphans, and to the needy, and to the wayfarer so that it may not merely circulate between the rich among you. So accept whatever the Messenger gives you and refrain from whatever he forbids you. And fear Allah: verily Allah is Most Stern in retribution."


This is one of the major guiding principles that wealth should circulate in the whole community rather than only among the rich, to prevent the big gap between the rich and the poor. In my opinion this is the current situation in Malaysia and because of this, some communities needs to build up "fences" to protect their wealth and safety. Most of the "rich" are usually brand concious and are spending money on branded item/designers = rich circulate money to rich designers which contradicts with the verse that has been highlighted earlier. This is only one of many example of the situation in Malaysia. 

I could see at times that we are so content to be secured in our life in this world, that we would do almost anything to earn top money. Some are so driven that they are determined to make certain amount of money before reaching certain age as one of their goals in life. Some wants to sit or be on par with the top earners of the country or world. My personal choice is that I would not bother to go that far, because eventually there are others who will always earn more. My opinion is that the usage of the money is much more important than the method of earning the money. There is another verse that I would like to share Surah al-Zukhruf verse 32 Allah almighty says :

"Is it they who distribute the Mercy of your Lord? Is it We Who have distributed their livelihood among them in the life of this world, and have raised some above the other in rank that some of them may harness others to their services. Your Lord's Mercy is better than all the treasures that they hoard."

Just a simple note that We that have been highlighted in the verse above refers to Allah because in Arabic it is in plural of respect and not plural in numbers.

Just imagine how the poor feels when they walk past these certain area that have all these "security fences". Do they feel envy, jealous, and exposed towards uncertainties?