ISLAMIC WEALTH MANAGEMENT

Islamic wealth and fund management is the professional management of Shariah-compliant securities and assets based on Islamic principles to achieve set financial goals. The scope of activity involves financial analysis, asset and securities selection, investment planning and ongoing monitoring of investment funds. Both individuals and institutions may become Islamic wealth and fund managers through the provision of related services.

The Islamic wealth and fund management first emerged in the 1960s when Muslim investors sought an alternative to the conventional western form of investment, particularly due to interest-dealings in conventional banks (which is prohibited in Islam).

As a Muslim, there are many responsibilities the one should undertake in this life. One of these responsibilities is management of wealth. Like most things in this life, wealth can be both beneficial and detrimental. This depends on the following factors:

a) Intention
The intention (NIYYA) is of paramount importance in Islam. Everything you do depends on your intention, which is totally between you and Allah, no one else can know why you are doing something, except him. As most of us know, a Muslim is rewarded on normal everyday activities, if he makes the right intention to please Allah.

b) How it wealth earned
Wealth has to be earned in an Islamically permissible way. This means that it is not generated from prohibited business activities.

c) How it is wealth grown (Invested)
Money today is in the form of government issued bank notes. In centuries past, money used to be made of precious metals (Gold and Silver), and therefore had an intrinsic value in and of itself, that kept its purchasing power constant over the years, thus fighting inflation. This is no longer the case, and money has to be actively invested and managed to keep its purchasing power from dropping, and increasing as well. Needless to say, the means of investment should also be allowed under Islamic law.

d) How it is wealth spent
Spending money is also a responsibility of every Muslim. Money should not be spent on unlawful products and services. Nor should money be spent to show off wealth, or spent in vain.

e) Rights of the Poor and Needy
Every wealth has a share that is dedicated to Allah, by paying the Zakat (Charity) to the needy and other charitable deeds in Islam.

It should be noted that in Islam, money is not an end in itself, but a means to higher values. If it is earned, invested and spend in the correct avenues, it will reward the individual, his family, his society and the Ummah as a whole. The rewards also span the hereafter as well as this life

The purpose of wealth is not to encourage lust after money in the non-Muslim sense, but to :

a) Inspire Hope
Many Muslims around the world, especially in their native countries, still suffer from psychological syndromes such as defeatism and fatalism and believe that there is no hope for them to be lifted from poverty. You may hear a lot of youth who think that "there is no hope for us!" and "the train has passed us!" attitude.

b) Motivate Muslims
If non-believers can do it, with no higher motive of benefiting others who are less fortunate, or for the hereafter, then we can do it to, for the good of ourselves, our families, our society and the whole Muslim Ummah!

c) Encourage Discipline
Many Muslims live day to day or month to month, and do not have any discipline when money is concerned. Even some wealthy Muslims do not have the discipline of saving on a regular basis! They offer suffer from occasional financial distress due to not managing their money properly, not because they are misers, but rather because they have no discipline or money management skills.

Wealth management is a responsibility for the Muslim. So is his responsibility to his children, and the society as a whole. I recall a Hadith for the Prophet (saw) that he said: "Do not let your money be eaten away by Sadaqah". A Muslim should not leave his money in the bank to be eaten by inflation!

d) Fight Consumerism
Many high earners do not invest at all, but rather spend their high salaries on newer cars. Many westerners earn very high incomes but have a very low networth because of "keeping up with the Jones'" syndrome. We Muslims should be above that. It is not your daughter’s wedding, or your new car that matters, it is what you believe and what you do!

Poverty is a misery, and it is sad that too many of the poor around the world are Muslims. Do not let greed drive you, but rather the message from Allah, as evident in Quran and Sunnah.