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Haram Risk Reduction

Posted: March 30th, 2014 | Author: | Filed under: Uncategorized | No Comments »

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.

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