Having a stable financial statement is one of the goals desired by many people, including Muslims. Apart from working hard, an investment might give people the opportunity to reach that goal.
However, some people are afraid to try this way. Whereas by investing, someone may get passive income supporting his financial position. Furthermore, Muslims are even worried if the investment is halal or haram.
To address this, we attempt to provide beginners with few tips before deciding to invest. Also, we try to share tips and the kind of halal investments that are safe to invest in.
2 tips for you as a beginner before deciding to invest
1- Use long-term and available cash.
Long-term cash means money that is not utilized during an extended period. Moreover, such an amount will never affect someone’s life in the case it is disappeared. Available cash means that the investors do not obtain the money from the debit transaction. Someone will be at greater risk if he loses in an investment where the fund comes from his liability.
2- Start with the lower risk.
Investment is not gambling but a learning process. We suggest a beginner invest in a lower price investment. Even though it might generate a lower return, a new investor would be safe from higher risk. After the learning process, the investor may decide to invest in a higher-risk investment for the higher return as it aligns with the general rule “high risk, high return.”
Some halal investments that beginners should know
- Sukuk
Sukuk is an instrument where the institution issues the certificate to the investors that represent undivided ownership or investment in the assets using shariah principles. Throughout the contract, the investors might get the benefit according to the generated portion from the acquisition.
- Islamic Mutual Fund
Islamic mutual fund is a kind of investment where the investors invest in several investment portfolios in which the investment manager acts as an intermediary. This investment is suitable for those who do not have enough time or knowledge to analyze the portfolio to purchase. The investor can benefit from the number of units he subscribes in Islamic mutual funds.
- Islamic Stock market
Stock or share is the ownership right of the companies. In this case, the companies are compliant with shariah principles. A purchased stock represents undivided ownership in the capital of a company. The minimum amount to buy is one lot comprises 100 shares. The investors may get the profit of this investment from capital gain and dividends. The investor might get capital gain when he sold the stock higher than the price he purchased. While to get the dividend, the investors should hold his stock until the cumulative date where the company decides to distribute its profit.
Nowadays, investment is accessible for everyone. Do not hesitate to begin your investment journey. Moreover, some of the instruments in the capital market are also Muslim-friendly. Investment is not gambling. That is why beginners should be ready financially and knowledgeable. Hopefully, the tips we shared can be beneficial for beginners.
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