brokenwithpower
New member
Salams my fellow colleagues:
I wanted to post this as a way to help you all find that Islamic finance in the west is not as hard as some people think, just takes a few extra steps. Here are some popular questions I hope to answer with this post -
https://etfdb.com/esg-investing/soc...e=fiftytwo_week_return&sort_order=desc&page=1
or you can go for mutual sharia compliant funds such as Amana fund and others and follow their portfolio if you like. There is a reason Sharia compliant mutual funds have such high fees, they are hard to get approved even in the west and takes lots of work.
a) Every brokerage firm releases quarterly documents and tax statements that document exactly where and how you made interest. Use this to find the source and do what is appropriate to alleviate interest.
b) some mutual funds and etfs that are not sharia compliant will incur interest no their own rights, this will be harder to deal with but you either can sell that share or monitor to see if they are the ones gaining the interest and not you as the end user. Interest by etfs and mutual funds typically are used to counter costs of depreciating assets so they keep it internally but always double check to see you are not the dealer of interest.
c) debt ratio is very important to understand how interest plays a part in keeping certain companies afloat, that is why it is important to understand sometimes even from a companies perspective interest is not avoidable but just needed to maintain depreciating assets. (i.e AstraZenica "leases" equipment for their pharmaceutical research that incurs interest from the company that leased them it. They then turn and sell it to a university to cover their loses and potential break even. This interest is reported as debt to AstraZenica and the interest profits are reported by their assets but they do not MAKE money off the interest, the company that leases the equipment is.) This is why sometimes sharia compliant etfs might have stocks that report interest buy if you look at their cash flow, they do not report keeping any of that money.
4) Interest is all around me, how do I avoid?
This is the hard one and realistically it will be impossible to avoid all interest forever. Car loans, student loans, mortgage will all get you in some way shape or form. Your best bet is to understand what banks offer and refinancing options in the future. Starting around 2019, more sharia compliant banks are forming in the west so in 10 years we may not have this issue anymore with big purchases. They are also controversial for some but that is inevitable.
5) What makes Riba haram?
Riba is known as Debt-driven income, meaning the money you have left to pay is what drives the cost of your payments. This means if I miss a payment the value of interest will increase the total cost of what I owe, and that is in-turn keeps people in debt longer. This is how interest got the nickname usury.
I wanted to post this as a way to help you all find that Islamic finance in the west is not as hard as some people think, just takes a few extra steps. Here are some popular questions I hope to answer with this post -
- My bank does not offer any interest free accounts, what do I do?
- How can I find sharia compliant ETFs or Stocks?
https://etfdb.com/esg-investing/soc...e=fiftytwo_week_return&sort_order=desc&page=1
or you can go for mutual sharia compliant funds such as Amana fund and others and follow their portfolio if you like. There is a reason Sharia compliant mutual funds have such high fees, they are hard to get approved even in the west and takes lots of work.
- What happens if I gain interest by accident?
a) Every brokerage firm releases quarterly documents and tax statements that document exactly where and how you made interest. Use this to find the source and do what is appropriate to alleviate interest.
b) some mutual funds and etfs that are not sharia compliant will incur interest no their own rights, this will be harder to deal with but you either can sell that share or monitor to see if they are the ones gaining the interest and not you as the end user. Interest by etfs and mutual funds typically are used to counter costs of depreciating assets so they keep it internally but always double check to see you are not the dealer of interest.
c) debt ratio is very important to understand how interest plays a part in keeping certain companies afloat, that is why it is important to understand sometimes even from a companies perspective interest is not avoidable but just needed to maintain depreciating assets. (i.e AstraZenica "leases" equipment for their pharmaceutical research that incurs interest from the company that leased them it. They then turn and sell it to a university to cover their loses and potential break even. This interest is reported as debt to AstraZenica and the interest profits are reported by their assets but they do not MAKE money off the interest, the company that leases the equipment is.) This is why sometimes sharia compliant etfs might have stocks that report interest buy if you look at their cash flow, they do not report keeping any of that money.
4) Interest is all around me, how do I avoid?
This is the hard one and realistically it will be impossible to avoid all interest forever. Car loans, student loans, mortgage will all get you in some way shape or form. Your best bet is to understand what banks offer and refinancing options in the future. Starting around 2019, more sharia compliant banks are forming in the west so in 10 years we may not have this issue anymore with big purchases. They are also controversial for some but that is inevitable.
5) What makes Riba haram?
Riba is known as Debt-driven income, meaning the money you have left to pay is what drives the cost of your payments. This means if I miss a payment the value of interest will increase the total cost of what I owe, and that is in-turn keeps people in debt longer. This is how interest got the nickname usury.