Why Muslims can't invest in RRSP, GICs etc anything that has interest ?

[canabiz]

Folks, our discussions at lunch time today quickly turned to RRSP since the deadline for contribution is next week...A couple of my co-workers who are Muslims asked me what is RRSP...i was rather taken aback since they were born here in Canada and is very much well-educated, i guess my point is we have been constantly bombarded about RRSP either on TV, on the 'Net, in the banks etc so it came as somewhat of a surprise why some people don't really have some sort of an idea what that is...

Anyway i explained to my co-workers briefly and was told that they don't invest in RRSP because it generates interest and that is against their beliefs. Same deal with stocks, GICs, bonds etc, even lottery stuff like 649, sports wagering and obviously the casinos.

Buying and selling a business to pocket the profit is apparently OK as is evident by one of the Prince of Saudi Arabia who recently purchased Four Seasons (Hotel) Corp.

Now i guess my question for the RFD Muslim stalwarts like Rehan, fakishan, asim and some others whose name escape me at the moment is kinda twofold

1/ What's so wrong about interest ? We have been taught since early age about saving and investing and diversifying and growing our money etc you know the drill. I would understand if you guys are against gambling but investing is a no-no as well ?

2/ How would you guys *manage* or *grow* your money in other words.

Looking forward to your thoughts. I don't agree with my co-workers' points of view but I do respect what they believe in.

[Gordon]

http://www.glumbert.com/media/rave.html :cheesygri

[TheRide]

Thanks for yet another useless post gordon.

maybe this helps... http://www.inter-islam.org/Prohibitions/intrst.htm

[b0rk]

This happened to me in high school as well. I think it's something along the lines of: "you work for your money, not your money working for you".

But...according to my economics prof, inflation is a tax (or cost) of holding money. If you hold money and dont invest anything with it, you're essentially giving away your money.

[TheRide]

Found this "Earning interest is not permitted according to the Shari'ah, and normally there are no reasons why a Muslim should earn interest. Muslims are required to use their money, funds and properties in businesses and investments that are compatible with the Islamic Shari'ah. Earned interest does not become a property of its earner because an interest-generating contract is not a means for earning. In other words earned interest is not yours and the principle is that you must return it to the person who paid it"

http://www.islamonline.net/servlet/Satellite?pagename=IslamOnline-English-Ask_Scholar/FatwaE/FatwaE&cid=1119503543718

so along the lines of what bork said. good job.

[fakishan]

wtf is a stalwart?
http://en.wikipedia.org/wiki/Stalwarts

for the record; i'm not a muslim nor an arab. I don't adhere to any religion for that matter. I simply studiy and observe other cultures out of pure intrest.

and profiting from interest was considered a sin in most major religions including christianity and judaism ( in fact, some orthodox jews still reject it).

[Sajjad]

1 out of every 1,000,000 muslims probably follow this.

[Sajjad]

wtf is a stalwart?
http://en.wikipedia.org/wiki/Stalwarts

for the record; i'm not a muslim nor an arab. I don't adhere to any religion for that matter. I simply studiy and observe other cultures out of pure intrest.

and profiting from interest was considered a sin in most major religions including christianity and judaism ( in fact, some orthodox jews still reject it).
a person who is loyal to their allegiance (especially in times of revolt)

[Sonbuster]

RRSP's are just a sneaky way for the government to get back some of the money issued via tax refunds, so in reality they're not really losing any money. i'm probably totally wrong, sorry for wastin gyour time

[Ryan]

It's technically against traditionally Christian beliefs as well.

http://en.wikipedia.org/wiki/Usury

When you put money in the bank, you are technically lending it to the bank.

[fakishan]

a person who is loyal to their allegiance (especially in times of revolt)
ah, then I suggest he retract my name from the list.

[Sajjad]

ah, then I suggest he retract my name from the list.


Agreed.
He made broad and possibly offensive statements by proclaiming that they were religious.
No one can say whether I'm religious or not, I can only say.

[Montague]

RRSP's are just a sneaky way for the government to get back some of the money issued via tax refunds, so in reality they're not really losing any money. i'm probably totally wrong, sorry for wastin gyour time
:confused:

Sorry but that makes no sense.

[fakishan]

Agreed. He made broad and possibly offensive statements by proclaiming that they were religious.
it's the usual, with them a 110% without question or against them thinking that terrorists and extremists use.

[ZenOps]

A lot of ultra-right Christians will not buy insurance on anything. House, etc.. and I'm sure car too (if it were legal)

Its a form of gambling really, insurance... You basically go to hell if you buy insurance. *Ned Flanders* does not buy insurance.

I don't see how that is any different from someone who does not believe in *tax breaks* or interest on money. Seems like an unscroupolous way to get around something, maybe a ticket to hell.

[Nemodigital]

It's technically against traditionally Christian beliefs as well.

http://en.wikipedia.org/wiki/Usury

When you put money in the bank, you are technically lending it to the bank.
Thats absolutely true, in the middle ages Jews were usually involved in 'banking' because if I remember correctly there is nothing in their religion against charging interest. For catholics you are not allowed to charge interest on money lent out.

[Rehan]

2/ How would you guys *manage* or *grow* your money in other words. Equity-based investments (stocks, etc.) are not a problem, as long as the company is not focused on activities not allowed in Islam. There are stock exchanges even in countries such as Iran and Saudi Arabia, and there are also Islamic indexes from Dow Jones -- http://djindexes.com/mdsidx/index.cfm?event=showIslamicOverView

[canabiz]

it's the usual, with them a 110% without question or against them thinking that terrorists and extremists use.

fakishan let's not sidetrack the topic. The question is why Muslims don't invest in RRSPs and the like

Sorry for mistaking you as a Muslim, i don't know which thread (you know there has been several threads about Muslims lately) but i was under that impression.

I am personally a Buddhist and we have no problem with interest and things of that nature, for the record.

[canabiz]

Equity-based investments (stocks, etc.) are not a problem, as long as the company is not focused on activities not allowed in Islam. There are stock exchanges even in countries such as Iran and Saudi Arabia, and there are also Islamic indexes from Dow Jones -- http://djindexes.com/mdsidx/index.cfm?event=showIslamicOverView

Rehan what about the *average Joe* Muslim who are not financial-savvy and perhaps with not a lot of money to buy stocks ?

I did pose this question to my co-workers and they don't seem to have a real answer.

Btw they have no problem with mortgage, it's a different form of interest but this time they are paying it and not taking it in.

[poromol]

the muslim people i know have no problem investing, even though they were discussed whether its not permitted due to religion. but they say that they're paid for a service (the money they invest), i guess they're logic makes sense.

its a weird subject and i dont understand it too well, just telling you my experience.

ps not muslim

[Cyrus the Great]

fakishan let's not sidetrack the topic. The question is why Muslims don't invest in RRSPs and the like

Sorry for mistaking you as a Muslim, i don't know which thread (you know there has been several threads about Muslims lately) but i was under that impression.

I am personally a Buddhist and we have no problem with interest and things of that nature, for the record.
lottery and gambling are forbiden in islam as far as i know. and that is because as we all know so many people loose their money and life on gambling cuz of getting deep into it and islam tells muslims not to gamble so that they don't loose their money or life.and for lottery as i asked a muslim about this he said it's because when u win ,everyone else loses their money,and again islam wants to prevent the sadness and money loss of all those people who lost so that u win.
But interest is OK .some banks in middle east offer something like 20% interest on ur money per year and as some one else said there are stocks in countries like saudi arabia and iran.

[fakishan]

fakishan let's not sidetrack the topic. The question is why Muslims don't invest in RRSPs and the like

i'm sorry too, but it just seemed you were picking on the muslims, when most religions hold the same value. i didn't know you were just ignorant about the subject :) peace

[Gordon]

Thanks for yet another useless post gordon.

maybe this helps... http://www.inter-islam.org/Prohibitions/intrst.htm

No problem

[R23]

wait, did you say your coworkers are born here and well educated and have never heard of RRSP?

lol dumbasses

[Rehan]

Rehan what about the *average Joe* Muslim who are not financial-savvy and perhaps with not a lot of money to buy stocks ?

I did pose this question to my co-workers and they don't seem to have a real answer. Then they can find a Muslim financial advisor that can tell them what is available out there. :) It doesn't take much money at all to start small in stocks or mutual funds -- $500 initial investment in the Dynamic SAMI fund (http://globefunddb.theglobeandmail.com/gishome/plsql/gis.fund_pro?fundname=Dynamic+SAMI), for example.

Btw they have no problem with mortgage, it's a different form of interest but this time they are paying it and not taking it in.Mortgages are generally allowed not because it's a different form of interest (i.e., paying instead of taking), but because it's a "necessity". Ask them about paying interest on credit cards, and they'll probably tell you that they avoid that as well.

[e0gdi]

Islam discourages sitting on wealth and "hoarding". An Islamic economic system is supposed to encourage investment and the flow of capital - the foundations of a strong economy. Just think about it, if you are receiving interest on something it essentially means you have lent your money to some other person or company who in turn are using that money to buy something (acquisitions, land, property, machinery,...). Not allowing interest means everyone has to invest DIRECTLY without the middle man. As an investor you will share in the risk and the reward. In essence stocks are the PERFECT investment because you really are sharing in the risk and the reward. Thats the main idea but there are other benefits as well.

[that_staples_guy]

Interesting story, happened last year when I was selling a printer to a customer, a muslim couple. When I threw the warranty pitch at them the husband piped up and remarked "service plans are strictly against my religious beliefs." I told my manager later and then he wondered out loud if they had insurance on their car.

Is this true, the muslim folk aren't allowed by religion to purchase a warranty with their product, what about the warranty that comes with the product?

[Nemodigital]

Interesting story, happened last year when I was selling a printer to a customer, a muslim couple. When I threw the warranty pitch at them the husband piped up and remarked "service plans are strictly against my religious beliefs." I told my manager later and then he wondered out loud if they had insurance on their car.

Is this true, the muslim folk aren't allowed by religion to purchase a warranty with their product, what about the warranty that comes with the product?
Well thats a good way to get a sales guy off your back... 'sir, are you aware of the benefits of our warrenty plan?' ... 'It is against my religion'. Thank you RFD

[Rehan]

Interesting story, happened last year when I was selling a printer to a customer, a muslim couple. When I threw the warranty pitch at them the husband piped up and remarked "service plans are strictly against my religious beliefs." Service plans and extended warranties are basically a type of insurance. I would guess they made the comment about the service plan because they consider such insurance to be a form of gambling/risk that is not allowed, a view that a small minority of Muslims have.

[that_staples_guy]

Hmmm, so I guess they steered clear because of the "what if" factor involved there.

[Ferman]

Where can I borrow money at an Islamic financial organization at zero percent?

Please.. someone tell me.

[Ferman]

Thats absolutely true, in the middle ages Jews were usually involved in 'banking' because if I remember correctly there is nothing in their religion against charging interest. For catholics you are not allowed to charge interest on money lent out.

This is not true.

Why do people think that just because there are some quotes on the wikipedia website, that it must be true?

I can find you quotes in the Bible and the Quran that don't make sense out of context..

[R23]

Well thats a good way to get a sales guy off your back... 'sir, are you aware of the benefits of our warrenty plan?' ... 'It is against my religion'. Thank you RFD

i might try that.
that orig post was too funny.

[Rehan]

Where can I borrow money at an Islamic financial organization at zero percent?

Please.. someone tell me. http://www.umfinancial.com/
There is no interest, but there are other fees. http://www.umfinancial.com/UMF_Press1.htm has some details.

[Ferman]

http://www.umfinancial.com/
There is no interest, but there are other fees. http://www.umfinancial.com/UMF_Press1.htm has some details.

Looks like this is for mortgages only, and only if your muslim.

Charinging fees for the proceeds? Sounds like interest to me.

I will donate 100% of the interest proceeds to charity if any muslim can show me where I can borrow $100,000 in cash without having to buy a house.

[Nemodigital]

This is not true.

Why do people think that just because there are some quotes on the wikipedia website, that it must be true?

I can find you quotes in the Bible and the Quran that don't make sense out of context..
Actually it did occure see here just two quick links I found off google and I heard off it a few other times as well. At the same time Jews were not allowed to own land in most of Europe during the middle ages as well. http://www.pbs.org/wnet/heritage/episode4/documents/documents_6.html
http://www.jewishvirtuallibrary.org/jsource/vjw/England.html

[Ferman]

Actually it did occure see here just two quick links I found off google and I heard off it a few other times as well. At the same time Jews were not allowed to own land in most of Europe during the middle ages as well. http://www.pbs.org/wnet/heritage/episode4/documents/documents_6.html
http://www.jewishvirtuallibrary.org/jsource/vjw/England.html

I'm talking about Catholics not being allowed to charge interest. All the Catholics I know will agree with me when I say this is BS.

It also talks in the Bible about plucking your eye out if it causes you to do evil. Parables were meant to teach, not to be taken literally.

[Nemodigital]

I'm talking about Catholics not being allowed to charge interest. All the Catholics I know will agree with me when I say this is BS.

It also talks in the Bible about plucking your eye out if it causes you to do evil. Parables were meant to teach, not to be taken literally.
Oh absolutely if we are talking about now and not 500-800 years ago.

[Rehan]

Charinging fees for the proceeds? Sounds like interest to me.

I will donate 100% of the interest proceeds to charity if any muslim can show me where I can borrow $100,000 in cash without having to buy a house.What may look like interest to you is allowed in Islam. What's your point in asking for an interest-free lender?

[Ferman]

What may look like interest to you is allowed in Islam. What's your point in asking for an interest-free lender?

My point is that it is impossible to let someone have money for nothing.

If the lender hides the interest in fees makes it a totally different story, and is not really lending out money for nothing.

[ZenOps]

I gotta say though that I tend to agree that a usary system with interest is a lot more progressive than any trade based system.

With real estate, in the old days it used to mean that if you owned land, you *had* to make it produce something (usually agriculture) or you wouldn't be able to payback the king taxes for that year. Sometimes it meant working yourself really hard, but it *is* progressive. Do badly enough times, and you lose the land because you have proven you can't do anything meaningful with it. Leases and usary laws allowed people who otherwise did not originally own the land to at least have a *chance* at making it come to fruition by giving the landowner a set percentage.

The Islamic idea may be *nicer* and slightly less oppressive, but then again on paper communism is nicer too.

I'm still firmly on the 'interest is a good idea' side.

[Casanova]

I'm talking about Catholics not being allowed to charge interest. All the Catholics I know will agree with me when I say this is BS.

It also talks in the Bible about plucking your eye out if it causes you to do evil. Parables were meant to teach, not to be taken literally.
this is insulting to me and my religion calling its rules BS.

[Nemodigital]

this is insulting to me and my religion calling its rules BS.
There are a whole bunch of rules that catholics are supposed to follow such as not eating meat on fridays, exercising lent, confessions... etc. Catholocism is really watered down lately... we need to go back to the good old days of mass in latin with the priest's back turned towards us :lol:

[The_dream2k]

In islam, The interest on bank accounts is unlawful because such interest is an increase of money made without effort or trade. Islam prohibits depositing one’s wealth and taking specified increase without the risk of either loss or profit making. Therefore, the type of investment allowed is where a person deposits money in an account and shares both the risk of making profit or losing. This is the definition of the Islamic investment method.

[Ferman]

In islam, The interest on bank accounts is unlawful because such interest is an increase of money made without effort or trade. Islam prohibits depositing one’s wealth and taking specified increase without the risk of either loss or profit making. Therefore, the type of investment allowed is where a person deposits money in an account and shares both the risk of making profit or losing. This is the definition of the Islamic investment method.

What about lending money out at higher interest rates to those with lower credit ratings? You are risking your money because repayment is not guaranteed.

Also, are companies like consulting firms that charge a higher price for their subcontractors that what they pay them against the rules? There is no effort in making money off of someone else's work.

[gilboman]

is this why muslim's arent supposed to own property? a muslim friend of mine explained why he can't own a house before and has to rent. it's because owning the house will generate "unearned" profits.

[R23]

ok i can see this being followed back in xxx bc or whenever this rule was made, but someone actually following it now, thats just odd.

everyone's religion has those quirky laws that were made long ago and im sure they meant well back then (ya i get that they probably wanted people to have to work for their money and not get it from another person, and it would prevent other problems), but people take it so seriously and follow it now.
im sure the people who wrote it back then today would probably be like 'buddy, get the interest'

[Rehan]

is this why muslim's arent supposed to won property? a muslim friend of mine explained why he can't own a house before and has to rent. Probably because of the mortgage issue? Owning property is not at all a problem.

[gilboman]

Probably because of the mortgage issue? Owning property is not at all a problem.

but from this thread it seems if you are hardcore muslim,you can't get profits for something you didn't directly do. so if you own a house and it appreciates in value (just like investing) its against the religion?

i do see your point of mortgage too though.

[Rehan]

but from this thread it seems if you are hardcore muslim,you can't get profits for something you didn't directly do. so if you own a house and it appreciates in value (just like investing) its against the religion?Maybe you missed a few posts in this thread...equity investments (such as a house or stocks) are okay.

[gilboman]

Maybe you missed a few posts in this thread...equity investments (such as a house or stocks) are okay.

are there different sects or degree of religiousness so that those at the more extreme end will view any type of profit without actual work is ill gotten? or am i completely off base?

[Benny]

What about lending money out at higher interest rates to those with lower credit ratings? You are risking your money because repayment is not guaranteed.

Also, are companies like consulting firms that charge a higher price for their subcontractors that what they pay them against the rules? There is no effort in making money off of someone else's work.


I was watching an arabic Satellite program with the Imam (like Priest) of the biggest Mosque in all America in Dearborn Michigan. A caller called in and said is it Haram (like wrong) to charge 30% interest. The Imam said if its to a Muslim you are not allowed. But to a non Muslim you are allowed and it is OK. I found that disturbing.

Btw it was in English

[Rehan]

I was watching an arabic Satellite program with the Imam (like Priest) of the biggest Mosque in all America in Dearborn Michigan. A caller called in and said is it Haram (like wrong) to charge 30% interest. The Imam said if its to a Muslim you are not allowed. But to a non Muslim you are allowed and it is OK. I found that disturbing.

Btw it was in EnglishThat was probably Sayed Hassan Al-Qazwini (http://www.icofa.com/about.htm)? If so, he would have been explaining interest from a Shia Muslim perspective. Here's what Ayatullah Sistani (one of the world's most learned Shia scholars today) says about it in one of his books of religious rulings:

Father and son, husband and wife can take interest from each other. Similarly, a Muslim can take interest from a non-Muslim who is not under protection of Islam. But a transaction involving interest with a non-Muslim who is under protection of Islam, is haraam (forbidden). But after the transaction is completed, and the deal is closed, if payment of interest is permissible in the religion of that non-Muslim, a Muslim can receive interest from him.