Haram Risk Reduction

For anyone who participates in any way in the modern financial system, some form of uncertainty exists regarding the halal-compliance of nearly all transactions. Whether they be investments, banking products, contracts- or essentially all financial dealings for that matter- some ambiguity always remains. While an unpleasant thought, it is a reality. Want to create a balanced-asset retirement portfolio? Those bonds involve blatant interest. Avoiding that by only dealing with (more volatile) securities/stocks? Those companies likely deal in some non-halal friendly product (gambling, alcohol, tobacco, etc…). Going one step further and avoiding this pitfall by investing in a shariah-compliant fund that avoids such companies? You are unfortunately still dealing with significant interest indirectly, as practically every corporation either has conventional debt and also issues its own bonds and preferred stock. Well, what if you avoid all investments and just work and keep my money in cash you might ask. Again, your employer invariably deals in debt for finance-structuring (yes including hospitals for the healthcare workers out there). And the biggest kicker? Even money itself is intrinsically tied to interest and debt in the modern fiat currency system.

So unless you live on a farm, deal strictly in precious metals, provide your own utilities, and avoid any financial dealings with society at large, the situation is unavoidable. This is not necessarily to say everyone is doing something wrong, rather that we all consciously or unconsciously assume some form of haram risk. One can certainly live in denial, come up with complex legal-gymnastics, or even decide these tenants are outdated and not relevant to modern times and disregard them altogether. It is our opinion that is best one be a realist and face these difficult challenges head-on. Yes, the ongoings of today’s international financial system that are in many ways in conflict with our principles are nearly inescapable. We accept this rather than shy away from it, but at the same time understand that we, as individuals and as a community, should also be actively and creatively findings ways to avoid our haram exposure. And that, in a nutshell, is Haram Risk Reduction. This will be an on-going theme of this site as we try to help you (and enlist your help) in finding pragmatic solutions to help you and our community achieve a genuine financial peace of mind and spirit.