zakaah

it is ok if u and i search answers to our questions
in whatsoever religions we wish.
i was recently stuck in the groove of the dilemma
"is savings of wealth / money permitted by god?"
i had a notion (hear-say) that islam prohibited savings.
i searched
and i found
that i was wrong.
islam doesn't prohibit savings.
but it does make it mandatory to pay "zakaah"
simply translated
'zakaah' means "to purify"
here, it means the purification of wealth and soul.
zakaah is a form of "charity"
it helps in pooling of assets for its distribution and use for welfare and growth.
if you perform 'zakaah' you will be relieved of the guilt of earning while world suffers.
'zakaah' leads to freedom from hatred, jealousy, selfishness, uneasiness and greed.
how much 'zakaah' is payable on ones income?
well, i read somewhere that 2.5% of the net income is the minimum prescribed.
in sikhism, 10% is prescribed ("dasvandh")
--
it suddently hit me that if we pay tax honestly
it broadly ranges from 10% to 30%
we are infact paying a form of "zakaah"
the more we earn, the more "zakaah" we pay.
the trouble is that we have less and less confidence and faith on the government
that this "zakaah" will be properly and justly and assuredly well used!
--
anyhow,
just knowing about the "zakaah" has relieved me of certain burdens so much.
performing it actually, regularly and without any hesitation or smartness
is likely to give me tremendous peace and tranquility.

Understanding Islamic Investment

What is generally known as "Islamic Investing" is actually investing in stock market the Shariah way.

Shariah is the code of law derived from the Koran and from the teachings and example of Prophet Mohammed.

Shariah (literally meaning "way" or "path") refers to the "way" or "path" Muslims should follow.

I found that Islamic investing is actually a very sound investing philosophy.

It brings discipline,sense and ethics in trading by questioning some of the core criterea we all have been blindly following.

Any new trader must study Islamic investing before getting knee deep in the gushing river of trading.

Islamic Investment Criteria:-

* Investing is prohibited in an industry or company indulging in business that is prohibited or abhorred in Islam?

Besides banking and finance, investing is prohibited in a business involving alcoholic beverages, pork and pork products, tobacco products, gambling, lottery, pornography and adult oriented material, prostitution and drugs etc.

* Cannot borrow on interest to Invest.

* As per Islamic investing, one cannot enter the market as speculator but only as investor.

* As per Shariah scholars, ideally there should be no interest-based debt on the company you invest in, but if debt financing is more than 33% of the company's capital, investing in that company is certainly prohibited.

* Under Islamic investing guidelines, ideally no income should come from interest-related sources. However, companies whose income from interest forms less than 5-10% of its total income, it can be considered for investing.

* In Islamic trading, one has to be very careful about company's monetary assets. As per Shariah scholars, accounts receivables and liquid assets have to be below 45% for the investment to be permissible.

* Day trading is prohibited in Islamic trading as it has little to do with actual investing and is considered closer to gambling.

* Margin Trading is buying stocks using money loaned from the broker. Interest is paid for this loan, and therefore it is prohibited in Islamic trading.

* Derivatives - Options and Futures is purchasing the right to buy or sell at a future date for a fixed price. Not exercising the option results in the investor paying the option fee. Therefore, majority of scholars are of the opinion that Futures trading is not permitted in Islam.

* Short Selling - Short selling is borrowing a stock from the brokerage firm and selling it. From shariah point of view you cannot sell what you do not possess.

If one can learn investing under Islamic wisdom, it will be one of the toughest, ethical and effective training.