Making Money from Money according to Islam
Under Shariah Islamic law, making money from money, such as charging interest, is usury and therefore not permitted. Wealth should be generated only through legitimate trade and investment in assets. But investment in companies involved with alcohol, gambling, tobacco and pornography is strictly off limits.
Shariah Law and Islamic Finance
The overarching principle of Islamic finance is that all forms of interest are forbidden. The Islamic financial model works on the basis of risk sharing. The customer and the bank share the risk of any investment on agreed terms, and divide any profits between them.
Friday
Making Money from Money
Thursday
What is shari'ah?
Shari'ah is the comprehensive Muslim law derived from two sources: (1) the Quraan (2) the Sunnah or practices of Prophet Muhammad (Peace and blessings of God be upon him). It covers every aspect of daily individual and collective living.
The purpose of Islaamic laws is to protect individual's basic human rights to include right to life, property, political and religious freedom and safeguarding the rights of women and minorities. The low crime rate in Muslim societies is due to the application of the Islaamic penal laws. These however can only be applied in a society which has established all other Islaamic laws to ensure justice and protection of each other's rights
Source: daar-ul-ehsaan.org
Sunday
Halal Investment
In recent times, more and more banks came forward to capture a potentially profitable slice of Muslim and ethical investment market. However, financial and investment products that meet the requirements of Shariah law are still comparatively thin on the ground. Traditionally, small savings account or buying a property through Islamic finance is considered as an investment to expect a return. In few instances, buy-to-let is also considered as a good investment.
However, Muslims and ethical investors are missing out of a relatively untapped market- 'Investment in land'.
Buying undeveloped land that can be built on is the new craze - and given the supply and demand equation in relation to the UK's housing needs it is not difficult to see why. Unlike conventional property market, where investors require financing through banks, investments in land do not usually require big chunks of money and do not require to be entangled with a bank or interest.
Buying land for sale in Britain appears attractive during a period when property still seems to be the best and safest investment.
Yet it is all the rage as back gardens fall into the hands of developers and homes start to sprout up in the most unlikely of places. That means there is money to be made from owning land that has building potential and today land speculation is all the rage.
It is simply an accepted fact that there is a huge potential market for such investment. Recent surveys shows that investment land has outperformed stocks and shares for each of the last 5 years and is one of the most popular forms of investment by private individuals.
A recent survey by the Halifax showed that the value of residential land had risen by 808% over the previous twenty years in England and Wales. This figure excluded London. Over the same period, surprisingly, the average house price had risen by only 306% - making this type of land investment - a better opportunity than bricks and mortar.
There is little doubt that a site suitable for residential development would be considered the most prime type of investment land. But unsurprisingly these tend to be the most expensive and are relatively scarce, so investors are now looking at other possibilities for land investment.
A recent report from the Chartered Institute of Surveyors (RICS) noted that farmland investment was partly viewed as an alternative investment to the stock market'.
Nevertheless, the Halifax Survey reminds that land investment, like stocks and shares, could go up and down in value. There was a correlation between land values and house price inflation. "When these has been either positive or negative price growth in the housing market ... this has typically been amplified in the value of building
business consider that less expensive and more abundant end of the scale comes agricultural land. This had been the cheapest point of entry for the potential land investor, but in November 2004 the RICS survey concluded that the land investment buying trend had moved to farmland too. It reported, "Farmland is being targeted by a new breed of investors, fuelling demand and raising land prices".
Comparatively lower prices per acre used to be the norm. Not so any more, the RICs report stated " the average land price of farmland continues to edge close to the £10,000 per hectare, with the price rises rivaling those of the residential sector in the past year".
In fact now many types of land may be worth considering as potential investment land. Although, one might consider investing in firm land, a prudent investor would certainly look for better potential for better return. There are few points to note before deciding which property is best for your investment. There are a number of factors that the investor new to the potential in self-build land needs to know about, even though investment land for sale has been considered by many to have performed well over the past few years and with the current shortage of affordable housing, the value of self-build land development looks set to rise again.
This, coupled with the fact that land is seen as a real investment and that the supply of self-build land cannot be manufactured out of nothing, shows why building plots of land for sale are viewed by many as an attractive investment opportunity.
Even so people buy land for different reasons. Some wish only to care for animals or use their land as a pony paddock; others take a long term investment perspective and hold on to their building plots of land for sale for many years, waiting for the value to appreciate. Many people also use their plot as self-build land to build their own 'dream' home.
Because you are entering the unknown, a land agent can help with the buying process. To the man in the street, or even to those more experienced in financial matters, selfbuild land development is probably a foreign business. Many people are experienced in the purchase of new homes, and there is some overlap between this and the purchase of the land, but there is also a great deal of territory between the two. As with any investment, there is an element of risk with investment land. And, of course it is all about speculation and having an eye on the long game. The government has already said that to cope with the demand for housing in London green belt areas will need to be developed. The figures suggest 40 per cent development of greenfield land and 60 per cent of brownfield sites.
The risk here is that speculative land investment in plots without planning permission in areas of high housing need is done with the longer term view in mind and the hope and belief that planning permission will be granted in years to come. Having gained planning permission the land may then increase in value 10 times over.
So a cool head and a rational approach are vital.
Promoters of land speculation often tell you: "You don't wait to land, you buy land and wait."
To this end there is a lot of activity from land agents particular across South East England. They specialise in land for sale close to existing housing that has been identified as having a good medium to long-term chance of gaining planning permission for residential housing.
Residential-sized plots of land for sale are then offered to the public allowing them to share in possible future development gains and, with the dotcom crash and the recent accounting scandals, the simplicity and transparency of investment building plots for sale has gained many followers.
There are no complicated concepts that investors need to understand with land, just that there is an everincreasing demand for building land for sale and a restricted supply of plots for sale.
The advantages are:
• Land is real.
• Unlike shares land is tangible - it can be visited, seen and walked on.
• There is a limited supply on land.
• England is a small country with the majority of the population wanting to live in the South East.
• It is easy to understand and seen as a solid investment.
• Land is not open to accounting scandals and it is clear when property prices are going up (or down) and the reason for this movement.
• It is a cheap way to invest in property
• Land increases in value in two ways: - By increasing property values (due to demand outstripping supply).
• By gaining permission to have houses built on it.
For example, a £15,000 plot of land in the South East that gains planning permission to build a four bedroomed detached house on it would then be worth in the region of £200,000 to a developer wanting to put a £600,000 house on the land.
It is, therefore, easy to see why land speculation is the new Klondike. The potential returns outstrip any other investment by miles. But like all these ‘too good to be true’ deals you need tp approach business with a cool head.
Source: lawsonfairbank.co.uk
Ivestment and Invest money
Investing is essential to making money.
Investment
Definition 1
In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.
Definition 2
In business, the purchase by a producer of a physical good, such as durable equipment or inventory, in the hope of improving future business.
Investing is essential to making money. You have to invest money to make money. Whatever your motto may be the idea to invest money is larger now more then ever and continues to grow more and more each year.
The most common known areas to invest money are stocks, bonds, mutual funds, real estate, and e-commerce. Everybody plans to invest money in the stock market and for good reason because the stock market is a great way to make money. Millions of people have made millions of dollars in the stock market. However, millions of people have also lost millions of dollars in the stock market. The stock market is the poster child for high risk, high reward investing.
That is why if you plan to invest money in the stock market, it is of great importance that you do your research on any company you have interest in investing in. There are no guarantees with the stock market nor are there any ways of completely knowing if the market is going to crash. That is what makes investing in the stock market a high risk. However, the stock market is the quickest way to make big money.
Ways to invest money exist worldwide and if you are like me and have thought about investing, you might just be wondering what are the ways to invest money that will be manageable, profitable and, ultimately, to your best interest. Although there are different ways to invest money, you need to find out what is the best way to invest for your lifestyle and your family.
The following are just some of the ways to invest money:
. Money Market Accounts
. Stocks
. Bonds
. Franchise/Business Ventures
. Overseas
. Home-based Businesses
. Real Estate
Planning a way to invest money boils down to some basic factors.
1. How much money do you have to invest?
2. How much do you know about your investment?
3. Who do you have to help you establish and maintain your investment? And,
4. What are your investment goals?
You should have the answers to these questions prior to you taking the plunge and investing. Once you do have a clear plan, you can then move forward. And, don't be afraid to invest in various lines of business.
Where to invest money is a question that many will ponder once they decide to invest. It is incumbent on any investor to seek out places to invest that will be beneficial to them in the long run. When it comes to answering the question, "Where to invest money?" you must think about if you are talking about a tangible place or if you are talking about the right opportunity.
When it comes to determining where to invest money, you have to be clear about what it is you want and what it is you expect. Another key factor in determining where to invest
money is knowing how much money you have to invest at the forefront of your plans.
If you are in the Indonesia and you want to invest overseas, you have to establish some connections and network in the country that you are trying to invest in. This is because the differences in currency, language and spending can be drastically different than what you are use to and you need someone that is familiar in that part of the region to act as your guide.
It is pertinent that you get someone that you trust and make plans to meet and visit the country in which you would like to invest. Although the Internet and virtual capabilities makes it limitless when it comes to deciding where to invest money, you want to make a note that it is never a good thing to do everything, all the time virtually.
Especially when your money is involved. If we were limiting ourselves to stocks and bonds, that would be a different story. However, with investment opportunities like real estate and businesses, you want to be hands on. So when you decide where to invest money, you want to make sure that you can get there.
Researching the venture and talking to people in the country that you live that have invested in similar businesses or real estate markets can lead you in the right direction. Check on an organization for investors by going online or visiting your local chamber of commerce. It is here that you can find valuable information that will help you pinpoint where to invest money that is best for you.
source: dervish.org
How do I start investing money?
How do I start investing money?
Investing starts with a financial plan. Make a list of the financial goals that are most important to you, such as buying a home, paying for a child's college education or living comfortably in retirement. Then look at where your money comes from and where it goes. If you're spending all of the money you make, and never have enough money to save or invest, look for ways to cut back on your expenses. When you find the extra money, make it a habit of paying yourself first and putting the money into your savings and investments.
Sound investment decisions require work, and you're probably already busy with your job, your family and other responsibilities. If you feel you don't know enough about investing on your own, you may need professional investment advice. Investment professionals offer a variety of services at a variety of prices. So it pays to shop around.
How do you start investing money?
The key to investing is savings.
An effective savings strategy coupled with a smart investing strategy will help you to meet your financial goals.
Every dollar saved now helps you to control your current consumption by which the size of the income that you think will be required for retirement is lowered.
Also, through the power of annual compounding, it increases the size of the nest egg you’ll have for retirement.
Saving and Investing Strategy
Discipline
To achieve any goal in life, one needs to be disciplined. Similarly, saving and investing too requires discipline. A disciplined approach helps you to remain focused on your financial goals. Formulate a plan and review it periodically to ensure that you are on the right track.
The 10% rule
Your goal should be to save at least 10% of your total before tax earnings. This should be the minimum. Most millionaires live far below their means as they are disciplined and highly focused on their financial goals from the beginning. They are millionaires because they have decided to be so.
Review your current consumption patterns
Conduct a careful study of your consumption patterns. Identify items of expenditures that you can do without or explore opportunities to reduce your costs without unduly sacrificing the item. Review such items as your cable bill, telephone bill, entertainment expenditure, insurance, brokerage services, utilities, cars. Divert these cash savings automatically to an investment account.
Budgeting Plan
Budgeting is vital to any savings strategy. It helps you to identify where your money is going. Wasteful consumption patterns can be controlled through successful budgeting. Often a simple spreadsheet in Excel would suffice. In fact, you can use the budget template that is already available when you buy the Home edition of Windows XP.
Plan to make saving automatic
Find out from your employer whether you can direct your paycheck to different accounts. If you don't have such a service, you can set up an account that will take the money automatically out of your checking account each month. Let the amount be directed to an investment account. This is re-enforced savings which implies you save first and spend the rest from your paycheck.
From: moneyinstructor.com
Saturday
Investment Tips
1. Planning to Invest
Buying real estate, whether you are buying the family home or an investment, is one of life's most important financial decisions. However, in buying an investment property, it is wise to remember that you are making a business decision. You are not buying from the heart but from the head. You are buying the property because you expect it to appreciate in value. Common mistakes made in investing are that people look for the same things they would want in a home or buy in their local area so they can 'keep an eye on it'.
In searching for a residential investment property it is important to consider three things:
• Look for a consistent streetscape. A mixture of conflicting building styles lowers the desirability of the street.
• The property should be located within easy walking distance of all amenities.
• The street should have potential.
As a business and financial investment decision, it is important to make your purchase in a methodical way:
• Assess your financial position,
• Decide on your strategy,
• Assess the financial capability of the investment,
• Negotiate effectively,
• Shop around for finance,
• Obtain legal advice, and
• Obtain professional property management services.
2. Assess your financial position
When investing, it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long term objectives, for example, will the property be part of your retirement financial plan?
Potential changes to your current situation should also be factored in such as the birth of a child or the loss of one income. It is wise to seek advice from an investment adviser or qualified financial planner to help determine goals and strategies.
3. Decide on your strategy
Some properties provide good rental returns but have little potential for capital growth; for some the converse is true. It is more difficult to find the ideal of high yield and high appreciation potential.
It is important decide on your strategy before you start you search.
4. Assess the financial capability of the investment
You should try to assess the soundness of your investment. Study the capital growth history and the potential rental income.
If you are familiar with computer spreadsheets, try to analyse the impact of an interest rate change or a potential vacancy period.
5. Negotiate effectively
Professional negotiation can help ensure that you do not pay too much for a desirable property. Negotiation can also include structuring a contract to allow items favourable to the purchaser such as access or installation of tenants.
6. Shop around for finance
The choice of your loan can be just as important as the choice of property. Some lenders have a different (and higher) rate for investment; others have the same rate. Some lenders have a package where your entire borrowings are just one big mortgage but with different accounts with different features. In this competitive environment, it pays to shop around. See our list of Home Loan Lenders.
7. Obtain legal advice
Sound legal advice will ensure that the contract is fully examined and approved and that any changes are allowable. A good solicitor should be an integral part of your investment strategy.
8. Obtain professional property management services
Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is also up-to-date with changes to the Residential Tenancies Act and is better suited to negotiate on your behalf should the need arise. He is also in a position to obtain credit checks on potential tenants and has access to tradespeople. If you prefer not to meet to your tenants then a managing real estate agent is definitely recommended.
Source: realestate.com.au
Tips for Online Investing
What You Need to Know About Trading
In Fast-Moving Markets
The price of some stocks, especially recent "hot" IPOs and high tech stocks, can soar and drop suddenly. In these fast markets when many investors want to trade at the same time and prices change quickly, delays can develop across the board. Executions and confirmations slow down, while reports of prices lag behind actual prices.In these markets, investors can suffer unexpected losses very quickly.
Investors trading over the Internet or online, who are used to instant access to their accounts and near instantaneous executions of their trades, especially need to understand how they can protect themselves in fast-moving markets.
You can limit your losses in fast-moving markets if you
• know what you are buying and the risks of your investment; and
• know how trading changes during fast markets and take additional steps to guard against the typical problems investors face in these markets.
Online trading is quick and easy, online investing takes time
With a click of mouse, you can buy and sell stocks from more than 100 online brokers offering executions as low as $5 per transaction. Although online trading saves investors time and money, it does not take the homework out of making investment decisions. You may be able to make a trade in a nanosecond, but making wise investment decisions takes time. Before you trade, know why you are buying or selling, and the risk of your investment.
Set your price limits on fast-moving stocks: market orders vs. limit orders
To avoid buying or selling a stock at a price higher or lower than you wanted, you need to place a limit order rather than a market order. A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. When you place a market order, you can't control the price at which your order will be filled.
For example, if you want to buy the stock of a "hot" IPO that was initially offered at $9, but don't want to end up paying more than $20 for the stock, you can place a limit order to buy the stock at any price up to $20. By entering a limit order rather than a market order, you will not be caught buying the stock at $90 and then suffering immediate losses as the stock drops later in the day or the weeks ahead.
Remember that your limit order may never be executed because the market price may quickly surpass your limit before your order can be filled. But by using a limit order you also protect yourself from buying the stock at too high a price.
Online trading is not always instantaneous
Investors may find that technological "choke points" can slow or prevent their orders from reaching an online firm. For example, problems can occur where:
• an investor's modem, computer, or Internet Service Provider is slow or faulty;
• a broker-dealer has inadequate hardware or its Internet Service Provider is slow or delayed; or
• traffic on the Internet is heavy, slowing down overall usage.A capacity problem or limitation at any of these choke points can cause a delay or failure in an investor's attempt to access an online firm's automated trading system.
Know your options for placing a trade if you are unable to access your account online
Most online trading firms offer alternatives for placing trades. These alternatives may include touch-tone telephone trades, faxing your order, or doing it the low-tech way--talking to a broker over the phone. Make sure you know whether using these different options may increase your costs. And remember, if you experience delays getting online, you may experience similar delays when you turn to one of these alternatives.
If you place an order, don't assume it didn't go through
Some investors have mistakenly assumed that their orders have not been executed and place another order. They end up either owning twice as much stock as they could afford or wanted, or with sell orders, selling stock they do not own. Talk with your firm about how you should handle a situation where you are unsure if your original order was executed.
If you cancel an order, make sure the cancellation worked before placing another trade
When you cancel an online trade, it is important to make sure that your original transaction was not executed. Although you may receive an electronic receipt for the cancellation, don't assume that that means the trade was canceled. Orders can only be canceled if they have not been executed. Ask your firm about how you should check to see if a cancellation order actually worked.
If you purchase a security in a cash account, you must pay for it before you can sell it
In a cash account, you must pay for the purchase of a stock before you sell it. If you buy and sell a stock before paying for it, you are freeriding, which violates the credit extension provisions of the Federal Reserve Board. If you freeride, your broker must "freeze" your account for 90 days. You can still trade during the freeze, but you must fully pay for any purchase on the date you trade while the freeze is in effect.
You can avoid the freeze if you fully pay for the stock within five days from the date of the purchase with funds that do not come from the sale of the stock. You can always ask your broker for an extension or waiver, but you may not get it.
If you trade on margin, your broker can sell your securities without giving you a margin call
Now is the time to reread your margin agreement and pay attention to the fine print. If your account has fallen below the firm's maintenance margin requirement, your broker has the legal right to sell your securities at any time without consulting you first.
Some investors have been rudely surprised that "margin calls" are a courtesy, not a requirement. Brokers are not required to make margin calls to their customers.
Even when your broker offers you time to put more cash or securities into your account to meet a margin call, the broker can act without waiting for you to meet the call. In a rapidly declining market your broker can sell your entire margin account at a substantial loss to you, because the securities in the account have declined in value.
No regulations require a trade to be executed within a certain time
There are no Securities and Exchange Commission regulations that require a trade to be executed within a set period of time. But if firms advertise their speed of execution, they must not exaggerate or fail to tell investors about the possibility of significant delays.
From: sec.gov
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