Investing as a Muslim is a very nuanced topic and I’ve heard from a lot of people some objections around whether Investing is Halal.

I’d like to make it clear that there are many affordable ways to have a Halal Investment, it just depends on how much you’re willing to spend and how much you’re already Investing.

In this blog I’m sharing my top Halal Investment options.

The first Halal Investment option is the S & P 500 Shariah. 

The S & P 500 Shariah is the top 500 companies trading on the New York stock exchange that follow Islamic rules. These are companies with no bonds, no impermissible products such as alcohol or pork, no gambling and no interest based income.

It’s important to note that the non-Shariah compliant S & P 500 has a lower management fee than the Shariah version, which means that when you buy and sell these funds there’ll be a lower expense ratio. This is because there’s a special Board which audits and monitors each of the companies to ensure they’re compliant with Islamic teachings.

The second Halal Investment option is Gold.

Investors can hold physical Gold directly in the form of coins, bullion or jewelry. Conventionally in the Islam culture, Gold is highly valuable as an investment but in the US generally, Gold is more just used as another diversifying tool because it holds intrinsic value.

It’s a private choice whether you want to invest in Gold, however it’s generally a good bet against inflation when the economy drops.

You can buy a Gold coin for as low as $75 if you don’t have the funds to buy larger amounts of gold (i.e. Gold bars).

The third Halal Investment option is Farmland Investing

Many people in history have grown rich off farmland - just take a look at some of the wealthiest families in the world and you’ll see that they started with farmland. I personally like investing in farmland because I think it’s very reliable and is a big win, because not only are you owning a piece of profitable real estate, you’re also owning crop share profit without doing any of the hard work of managing the actual farm!

In my personal experience, you can usually sell farmland for 3x the price you’ve bought it long term.

It’s also worth noting that China has a huge investment in US farmland. In my view if you’re owning a country’s farmland, and thus their food source, you’re effectively owning them.

Investing in farmland isn’t cheap however, and typically starts at $8,000.

Finally, the fourth Halal Investment option is Halal REITs.

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing properties.

REITs invest in most real estate property types, including apartment buildings, cell towers, data centers, hotels, medical facilities, offices, retail centers and warehouses. 

REITs are a great form of real estate investing but in the US I’ve yet to find a Halal REIT that I’m completely comfortable investing in. Here are 3 factors that make it Halal:

1. They cannot have more than 33% interest
2. It cannot come from buildings that operate illegal or impermissible activities such as nightclubs, bars, any kind of gambling operation i.e. casinos. 
3. The property is not reliant on interest. Most rental properties are not bought out in cash and are reliant on mortgages from the bank.

A note on rental properties:

Rental income is not for the faint of heart! Managing a rental property takes time, experience, and resources.

Before investing in a rental property, consider the following:

1. Rental income is NOT passive. It requires a lot of time, energy and resources to manage, unless you’re using a management company.
2. Renters in the US have a lot of rights, for example if they don’t pay their rent, it's difficult for a landlord to evict them.
3. You are in charge of managing the property (again, unless you hire a management company, but even then you still need to make key decisions).
4. The interest rates for a buy-to-rent is higher than a standard mortgage.

Join my December Farmland Workshop

One of the biggest investment opportunities is farmland (and one of my favorite).

Why? Because it's highly profitable (typically gives me returns of 3x my investment), enables me to invest in the United States and contribute to the economy, farmland investing offers a guaranteed return as long as humans and animals are alive because we ALL need to eat, and importantly, is Halal.

And that's why every December I run a completely sold out workshop where I invite a guest expert on farmland investing and facilitates helping you invest in the farmland of your choice.

I only offer 20 spots so that in the 2 hrs of the workshop, every participant gets an equal chance to get their questions answered. I also share where I have invested in and my thought process of why I chose to invest in a particular crop or region.
The date will be released very soon but in the meantime you can pre-look your spot RIGHT HERE.