kimutaikim
New member
As-salamu alaykum,
Long post ahead
if you don't have the time (or don't want to read it there is a TLDR at the bottom)
So..I've been going through post after post and I can't find the answer I'm looking for. I understand we all have our own opinions and tolerances. I'm going through my stocks as I reevaluate them. So, I was looking at a stock I own (STAG) and I am trying to see if others agree with my thinking or not and if I can get some guidance. I own way too many stocks to keep track of them so I am wanting to look at my investments again and please I am not asking about the cons of dividend investing or if I should invest in cryptocurrency but rather if my method of investing seems to be halal in the eyes of Allah (but....most investment advice is appreciated).
I was looking at the companies 10-k and the company is a RIET so they earn a majority of their money from rental income but it seems like they also earn interest (I'm assuming from a saving account). Fundamentally, they earn more money from their rental income than they do their interest income and they also pay interest but earn enough money to pay off those obligations so I think their dividends are halal (as long as that trend continues). (The following figures are in thousands as per their 10-k sheet) $117,247 from rental income and $165 from interest and other income (in thousands) but they pay ($15,928) in interest expense and their total expenses for running the company is $(87,883), (https://sec.report/Document/0001479094-20-000030/#i6937fc10a8254940bf2685307a411f9e_10) I am looking at 2020.
In my honest opinion, we shouldn't pay or earn interest a penny of interest and I agree with that statement but here is the issue. some people say once you invest in a stock you essentially agree to all their decisions so if they take a loan it's like you do as well but I disagree (I'm with the other side of this argument) as I can not control that choice. If I started a business then I'd agree with the previous statement as I have more control but when it comes to stocks All I can do is vote and voice my opinions on what they send me to vote on, such as who stays on the board of directors, and since I can't vote or control if they take a loan or earn from haraam sources I need to make sure once I am paid my dividend it didn't come from a haraam source. In terms of capital gain, I think I shouldn't need to purify it but I know I have to pay zakat on it though.
LET ME SHOW YOU MY LOGIC
If you asked my 16-year-old self I'd say a penny of interest makes it all haraam but I don't know if I have become accustomed to interest touching us every day or if this is permissible but they way I see it their non-halal income from other and interest income (a.k.a Haraam income) is $165,000 and they paid $15,928,000 interest (a.k.a Haraam expense). The company is in negative $(15,763,000). We haven't looked at their expense or halal income yet because I want to break this down.
Here alone the company is in the wrong and if this was how their year looked any dividends received would be wrong since their income was haraam but also they took a haraam expense and paid interest and since their haraam income is less than the haraam expense they obviously paid my dividend with the loan but either way my dividend would be haraam. If that wasn't clear I am saying if Haraam's income is>haraam expense or vice versa it doesn't matter because it's haraam either way (again we haven't considered their halal expense and halal income, yet).
so let's look further...
Their halal expenses for running the company are $87,883,000 so we are looking at negative $(103,646,000).
Just this alone would be wrong (again) because of what was said previously (income is haraam and so is their expenses so either I get paid from interest earned or interest paid (loan is taken) by the company). I have the ability to not invest in this company so if I decided to invest in this company or not sell and purify my stock I think I'd be in the wrong as I have the knowledge of their wrongdoings even though I can't control the decisions they made. If they paid me a dividend (which would be crazy from a business standpoint) I'm getting money because they took a loan and/or earned interest to pay me so I'd sell the stock (bc that is a horrible return on my money) and I'd need to purify my money. I know this paragraph is redundant BUT I need to drive the point home of when I think WE ARE RESPONSIBLE and what I see as HARAAM.
Now, this is where I think the key comes that makes this halal. Their halal revenue is $117,247,000 so the net revenue (117,247,000-103,646,000) is $13,601,000. My understanding of in thousands (as per 10-k/10-Q) is this if I did the wrong amount of zeros the math is still (relatively) the same.
The profit is halal, in terms of the net, and with this amount, they then keep some for future use, and then I get paid from this amount if they decide to pay me a dividend. A benefit of dividends and still halal because they aren't guaranteed
In this long novel I am essentially asking is it okay to invest, profit. and receive dividends if the company pays and/or earns interest but makes almost all of their profit from a halal source and always ends up positive from that halal source of income before paying me or have I just started to overlook interest (astaghfirullah) and any amount of earned or paid interest is not purified by halal income?? I'm not sure if my math of (haraam income and/or expense + halal expense) is less than (companies halal income) == halal income for me.
If you read this whole long-winded post I really appreciate it but if you don't have the time to then here is a TLDR so I can still get an answer.
TLDR; IF a company earns interest or pays interest but that amount is less than their halal revenue are any dividends and capital gains on it halal?
Is it still halal if
halal income - haram income and/or interest = $0
but their halal expenses are greater, making net income in the negatives. e.g. they earned $100 BUT EARNED $20 from INTEREST and PAID $80 in INTEREST making NET INCOME $0 but paid $20 for labor so the company made -$20? this is a halal loss that we share?
I appreciate any and all responses. I hope I haven't made a mistake and if I have please do explain it as I need to make sure I fix my mistakes before it is too late. We are at a point of time where interest is in our lives even if we do not want it and we need to find a way to live in this world. Our money doesn't have anything to back it up. If you don't have a credit card or take a loan your credit score is low and if your credit score is low you sometimes miss out on good investments or can't rent a place or even work in certain sectors or jobs as those things are needed. I really do not want to deal with interest and as far as I can tell at the end of the day I am getting paid from the interest less pool but may Allah guide me and all of us, inshallah!
Long post ahead
if you don't have the time (or don't want to read it there is a TLDR at the bottom)So..I've been going through post after post and I can't find the answer I'm looking for. I understand we all have our own opinions and tolerances. I'm going through my stocks as I reevaluate them. So, I was looking at a stock I own (STAG) and I am trying to see if others agree with my thinking or not and if I can get some guidance. I own way too many stocks to keep track of them so I am wanting to look at my investments again and please I am not asking about the cons of dividend investing or if I should invest in cryptocurrency but rather if my method of investing seems to be halal in the eyes of Allah (but....most investment advice is appreciated).
I was looking at the companies 10-k and the company is a RIET so they earn a majority of their money from rental income but it seems like they also earn interest (I'm assuming from a saving account). Fundamentally, they earn more money from their rental income than they do their interest income and they also pay interest but earn enough money to pay off those obligations so I think their dividends are halal (as long as that trend continues). (The following figures are in thousands as per their 10-k sheet) $117,247 from rental income and $165 from interest and other income (in thousands) but they pay ($15,928) in interest expense and their total expenses for running the company is $(87,883), (https://sec.report/Document/0001479094-20-000030/#i6937fc10a8254940bf2685307a411f9e_10) I am looking at 2020.
In my honest opinion, we shouldn't pay or earn interest a penny of interest and I agree with that statement but here is the issue. some people say once you invest in a stock you essentially agree to all their decisions so if they take a loan it's like you do as well but I disagree (I'm with the other side of this argument) as I can not control that choice. If I started a business then I'd agree with the previous statement as I have more control but when it comes to stocks All I can do is vote and voice my opinions on what they send me to vote on, such as who stays on the board of directors, and since I can't vote or control if they take a loan or earn from haraam sources I need to make sure once I am paid my dividend it didn't come from a haraam source. In terms of capital gain, I think I shouldn't need to purify it but I know I have to pay zakat on it though.
LET ME SHOW YOU MY LOGIC
If you asked my 16-year-old self I'd say a penny of interest makes it all haraam but I don't know if I have become accustomed to interest touching us every day or if this is permissible but they way I see it their non-halal income from other and interest income (a.k.a Haraam income) is $165,000 and they paid $15,928,000 interest (a.k.a Haraam expense). The company is in negative $(15,763,000). We haven't looked at their expense or halal income yet because I want to break this down.
Here alone the company is in the wrong and if this was how their year looked any dividends received would be wrong since their income was haraam but also they took a haraam expense and paid interest and since their haraam income is less than the haraam expense they obviously paid my dividend with the loan but either way my dividend would be haraam. If that wasn't clear I am saying if Haraam's income is>haraam expense or vice versa it doesn't matter because it's haraam either way (again we haven't considered their halal expense and halal income, yet).
so let's look further...
Their halal expenses for running the company are $87,883,000 so we are looking at negative $(103,646,000).
Just this alone would be wrong (again) because of what was said previously (income is haraam and so is their expenses so either I get paid from interest earned or interest paid (loan is taken) by the company). I have the ability to not invest in this company so if I decided to invest in this company or not sell and purify my stock I think I'd be in the wrong as I have the knowledge of their wrongdoings even though I can't control the decisions they made. If they paid me a dividend (which would be crazy from a business standpoint) I'm getting money because they took a loan and/or earned interest to pay me so I'd sell the stock (bc that is a horrible return on my money) and I'd need to purify my money. I know this paragraph is redundant BUT I need to drive the point home of when I think WE ARE RESPONSIBLE and what I see as HARAAM.
Now, this is where I think the key comes that makes this halal. Their halal revenue is $117,247,000 so the net revenue (117,247,000-103,646,000) is $13,601,000. My understanding of in thousands (as per 10-k/10-Q) is this if I did the wrong amount of zeros the math is still (relatively) the same.
The profit is halal, in terms of the net, and with this amount, they then keep some for future use, and then I get paid from this amount if they decide to pay me a dividend. A benefit of dividends and still halal because they aren't guaranteed
In this long novel I am essentially asking is it okay to invest, profit. and receive dividends if the company pays and/or earns interest but makes almost all of their profit from a halal source and always ends up positive from that halal source of income before paying me or have I just started to overlook interest (astaghfirullah) and any amount of earned or paid interest is not purified by halal income?? I'm not sure if my math of (haraam income and/or expense + halal expense) is less than (companies halal income) == halal income for me.
If you read this whole long-winded post I really appreciate it but if you don't have the time to then here is a TLDR so I can still get an answer.
TLDR; IF a company earns interest or pays interest but that amount is less than their halal revenue are any dividends and capital gains on it halal?
Is it still halal if
halal income - haram income and/or interest = $0
but their halal expenses are greater, making net income in the negatives. e.g. they earned $100 BUT EARNED $20 from INTEREST and PAID $80 in INTEREST making NET INCOME $0 but paid $20 for labor so the company made -$20? this is a halal loss that we share?
I appreciate any and all responses. I hope I haven't made a mistake and if I have please do explain it as I need to make sure I fix my mistakes before it is too late. We are at a point of time where interest is in our lives even if we do not want it and we need to find a way to live in this world. Our money doesn't have anything to back it up. If you don't have a credit card or take a loan your credit score is low and if your credit score is low you sometimes miss out on good investments or can't rent a place or even work in certain sectors or jobs as those things are needed. I really do not want to deal with interest and as far as I can tell at the end of the day I am getting paid from the interest less pool but may Allah guide me and all of us, inshallah!