WIN
– WIN INVESTMENT
Everything
revolves around money, they say. It’s more than a formula; it’s the daily
experience of just about every common man. And this daily experience involves,
above all else, a continuous shortage of money. There is not enough money to
pay the college fees or to have what we desire. Not enough money for hospitals,
or to pay the bills. There is a lot of work to do, but no money to pay for it. Everything
else inflates except our salaries and wages. Who among us is not familiar with
the feeling of wanting to contribute something but having “no money” to pay for
that valuable contribution? We talk about the low risk, high return investments
i.e., the mutual funds, government securities, fixed deposits, shares and
debentures. We all want more than what we already have. We are all in the verge
of finding new avenues to invest, so that we can cope up with the increasing
cost of surviving (in the modern context, it has changed from cost of living to
cost of surviving). This paper attempts to address on risk free, high return investments
and its effects on socio-politico-economic spheres at global level in the light of Prophet Mohammed (PBUH) who taught this subject
clearly and completely 1400 years ago.
Prophet’s
teachings were always in line of Thawheed (monotheism) i.e., Believing in one
true God, the unseen, the day of judgment and the Qadr (fate). So, when talking
about investments, he always insisted on eternal investments which were laid on
the foundation of Thawheed. These eternal investments will be fruitful to us here
and here after. According to one’s capacity and the level of Iman, these
investments differ from person to person. There are four types of eternal
investments which are encouraged by our beloved Prophet. These investments will
never go waste and it will be safe guarded in the Akhirath Savings Account by
none other than Allah himself.
1.
SADAQA
(VOLUNTARY CHARITY)
If a
person is at the highest spiritual level, the principle on investment will be laid
on the basis of Ihsaan [1]. That is we own nothing and the owner of
everything is Allah (SWT). The negation of the principle of human ownership and
the acceptance of Amanah (Custodianship). Whatever we have, is a sacred trust
on us. The meaning of ownership is being able to spend as one desires. “Believe in Allah and His Messenger
(Muhammad), and spend of that whereof He has made you trustees. And such of you
as believe and spend (in Allah’s way); theirs will be a great reward.” (57:7). If we claim ownership of our wealth we become like ‘Qaarun’.
He was cursed by Allah and his story is mentioned in the Quran. As slaves of
Allah, we have to follow the teachings of Prophet in accumulating and spending
of wealth. Thus, everything is given by Allah and He is the owner.
Whatever
we get in this world, although we have worked for it, it is given to us without
a right. This can be denoted as a favour or bounty from Allah. We did not earn
anything. Accumulation of wealth is not according to our talent and hard work
but it is the favour and bounty from Allah. We earn only the good and the bad deeds;
we do not earn anything more in this world. If we had earned money, it should
come to us even after we die.
Out of this favour, the rightful share is
only that fulfills our basic needs. Whatever is surplus it is the share of
others. “They ask you how much they
are to spend; say: "What is beyond your needs." (2:219). Allah has put in our share to test us.
“And in their wealth and possessions
(was remembered) the right of the (needy) him who asked and him who (for some
reason) was prevented (from asking).” (51:19). The test is about whether
we are keeping the wealth in our custody and take the pride of owning it or
giving it away to the real owner. This economic teaching of Prophet gives us
the highest form of spiritual and voluntary socialism. Prophet (PBUH) led his
life at this level. He never retained anything in his whole lifetime. Many of the
Sahabas whom commonly known as Fuqara Us Sahaba lived at the same level.
[1] Ihsaan means the state where one is of
firm faith that Allah is watching him all the time.
2. QARD
AL HASAN (VIRTUOUS LOAN)
Loan in the meaning of a virtuous
loan that is interest-free and extended on goodwill basis, mainly for welfare
purposes, the borrower is only required to pay back the borrowed amount. According
to certain traditions, this is such an act of virtue that its reward will be
more than that of Sadaqa (voluntary charity). Probably the reason is that many
of those who seek loans are respectable people who even when they are badly in
need of money, do not condescend to accept free aid, because they consider
doing that, below their dignity and position. For this reason, giving
interest-free loan is considered more rewarding. Imam
Ja’far As- Sadiq says, “It is written on the door of paradise that there are
ten virtues of giving sadaqa and eighteen for giving Qard Al Hasan”.
The loan is payable on demand and
repayment is obligatory. ‘And if one of you deposits a thing on
trust with another, let the trustee (faithfully) discharge His trust, and let
him fear his Lord.’ [2:283]. But if a debtor is in difficulty, the lender/creditor
is expected to extend time or even to voluntarily waive repayment
of the whole or a part of the loan amount. Islam allows loan as a form of
social service among the rich to help the poor and those who are in need of
financial assistance. Qard Hasan may be viewed as
something between giving charity or gift and giving a loan. The borrower is only obligated to repay back the
principal amount of the loan. Islamic view about loan (Qard) is that it
should be given to borrower free of charge. A person is seeking a loan only if
he is in need of it. Hence, it is a moral duty of the lender to help his
brother who may be in need. The borrower should not make an effort to take
advantage of somebody needs. He should help the needy by lending him money
without any charge. The reward of this act is with the God. Hence, it is
referred as Qard Hasan (benevolent loan) which signifies the
benevolent nature of the act of lending. In this there are no returns but the
principle is safe. This is encouraged after Sadaqa.
3.
MUDARABAH (VENTURE CAPITAL)
If a person is incapable of
giving whatever he has and wants returns in monetary terms Islam introduces to
an investment known as Mudarabah. It is form of business organization in which
one person gives capital to another person for business and both of them share
profits in mutually agreed proportions. The former, the supplier of capital and
the latter, the user of capital or entrepreneur. Thus ‘Mudarabah’ is a
contractual relationship executed between two parties, one supplying the
capital and the other supplying the labour and skill, for business the profits
of which are shared by both in accordance with agreed terms. In case the
business sustains loss, the entire loss is borne by the venture capitalist who
assumes full responsibility and makes no claim on the entrepreneur, although
the latter also suffers because he does not receive any share in profit or any
reward for his services. This
encourages entrepreneurship and gives an opportunity for the skilled poor to
come up in life.
It is said that Mudarabah was in vogue at the time of
advent of Islam and the Arabs widely practiced it. The Holy Prophet himself is reported
to have worked as entrepreneur for Khadijah (RA) during his youth. His
companions are also reported to have been practicing this form of business
partnership. But had the Mudarabah business been so common, there would have
been its detailed mention in Hadith literature. However, there is no reference
to it in any Quranic verse and there is hardly any instruction about it in any
tradition of the Prophet of Islam. It appears that concept of Mudarabah was
developed by the Muslim jurists later on. They have taken pains to build up
sizeable amount of literature regarding the concept of Mudarabah. They have
laid down detailed rules and regulations about the terms and nature of its
contract, about the duties and rights of the Venture Capitalist as well as the entrepreneur,
duration of the contract, etc.
4. ZAKAT (OBLIGATORY
CHARITY)
If a person doesn’t want to give away his money to anyone,
but wanting that idol money only to him, Islam permits that with certain
restrictions. Prophet (PBUH) legislated the law of Zakat, and ordered
the rich to pay a just share of their money which is not utilized for a period
of one year to the public treasury. The Prophet (PBUH)
said to Mu`adh (RA) [reported by Bukhari 1365, Muslim 26-27],
"Tell them that they are obliged to give a charity (i.e. zakat) that is
taken from their rich and given to their poor. The money, so
collected, constitutes a very large amount which can play an important role in
combating poverty, narrowing class gap and ensuring an over-all development. The
one reason behind the economic crisis in US in 2008 was lack of money
circulation in the market. Zakat system is lowest level of investment whereby
Islam discourages idol and unutilized wealth and resources. So, that the market
does not collapse at any point of time. The
leaders in Islam even waged wars against those who refused to pay Zakat [2].
CONCLUSION
Most important act for community-building is
the reciprocity in gift exchanges. If you need a box of nails,
you go to the hardware store and buy one. There is no expectation by
either you or the shop assistant that any future reciprocity is involved. Each
transaction stands on its own. However, no community has been created
either. Now, assume that you go out for another box of nails, and that
your neighbor is offering his one also refuses your offer to pay.
What has happened? From a purely material viewpoint, in both cases you
end up with your box of nails. But something more has happened in the
second case. When you meet that neighbor
again, you will definitely greet him. If he forgot to buy some butter,
you will most likely share some of yours. The gift of the box of nails is
a community-building act. Its purchase is not. A commercial
transaction is a closed system: the nail versus the money. In contrast, a
gift is an open system. It leaves an imbalance in the transaction that
some possible future transaction completes. The gift process
creates something that the monetary exchange does not. A new thread has
been woven into the community fabric. This was exactly the teachings of our
beloved Prophet (PBUH), these are not mere investments. These are community
building acts that are deteriorating at present. His teachings
were implemented, lived, glorified and made history. This economic system will
once again triumph in this world. Allah will fulfill His promise. This will be
the most just economic system as it has functioned earlier whereby brings peace
and harmony among people. The only win-win investment which is going to benefit
us here and hereafter is this investment. "And
whatsoever you spend of anything (in Allah's Cause), He will replace it.'' (34:39). "And
whatever you spend in good, it is for yourselves, when you
spend not except seeking Allah's Countenance. And
whatever you spend in good, it will be repaid to you in full, and you shall not
be wronged.'' (2:272). Fools learn by
experience and the wise learn by examples. We have a beautiful example of our
beloved Prophet (PBUH). Let it not be too late for us to ponder and introspect
our deeds.
[2] Abu Bakr
(RA) waged war against those who refused to pay Zakat.
REFERENCES
·
The
glorious Qur’an
·
Sahih
Al – Bukhari & Sahih Al - Muslim
·
Rich
dad, poor dad – Robert T. Kiyosaki and
Sharon L. Lechter
·
Khilafa
– Dr. Israr Ahmed
- Money should work for us, not the other
way around - Bernard
Lietaer
