FYI Please see the following url: http://www.muslimsonline.com/mailinglists.html ----------------------------------------------------------------------------- As Salaamu 'alaikum wa arhamtullahi Recently there was a discuission with follow ups on Islamic investement; they are valuable proposals, which I would like to share with you - May our efforts be a useful source of information for our Umma- may Allah give us barakah in the efforts.... Acknowledgement for the redistribution: Jaffer Manek Euro Asia Pacific Professionals International Ltd www.euroaspa.com/euroaspa/ Jaffer Manek- EuroAsPa Int'l <[log in to unmask]> The mail is actually in response to an interesting discussion about the stockmarket, in the frame of which, brother J. Manek brought forward his comments/thoughts and proposals.. It seems a consensus has been reached that the system of stockmarkets is not as benign and benevolent a vehicle of investment for small-savers as it is made out to be. Secondly, it is undeniable that criticism per se is lame without an offer of possible solutions and alternatives. Thirdly, it appears we uphold the maxim that it is incumbent for every individual to improve his/her own position, at all times, but in a positive way not only for himself/herself but also for the community he/she lives in and the wider global community. I feel this sentiment is not exclusive to Muslims but to people of other faiths also. So now we should move on to address the central question " ... where small investors could place their money in their absence." I am going to attempt a suggestion subject to adjustment, further consideration and further fine-tuning. I have already put forward a provisional list of possible avenues of investment for small savers. As a reminder, it is: ----------------------- 1 - pay-off all credit cards, personal loans, hire-purchase loans, mortgage on housing. 2 - invest in boosting the education both temporal and spiritual of your own children 3 - pay-off debts of own business if applicable 4 - invest in own business expansion with paying for product innovation & development, marketing, customer care, distribution/transport, staff amenities, etc 5 - invest in personal development of self e.g. elocution to remove accent in speaking, improve writing ability, improve personal appearance 6 - buy real estate to derive rental income, if necessary organise a team where several people take an equal share and make clear provision to pay the one who puts in the effort, management etc in the democratic decision-making at the same time agree in writing a clear exit route at the outset for anyone who needs to withdraw. 7 - inject funds to be a minority equity holder in a local small business without dominating or threatening the entrepreneur. Agree in writing at the outset a clear exit route for any investor in the team who needs to leave. 8 - invest in the environment and social amenities e.g. schools, hospitals, water-wells, parks, gardens, plant trees, have the rubbish and weeds cleared, deal with stray animals, hobbies for youngsters, etc as a healthy and happy neighbourhood will rub-off on the small investor in the locality. I feel the pension, well before 65 years' age, can be the combination of the value of your residence, the sale of your business or dividends from your ownership in your business, a stream of rental income and the pleasure of living in a friendly neighbourhood full of amenities. Depending on the stockmarket to produce monthly payments from the age of 65 cannot be such an attractive or reliable proposition. ----------------------------- Someone queried whether the order in which the list above should operate. I suggest it is up to the individual to invest in the way most beneficial to them in their particular circumstances. There could be a mixture of the items in the list. Regarding the query about charity (zakat, khums, etc) it is assumed that the surplus is after all charitable dues. Regarding the query about investing in real-estate, it is possible for fifty or hundred or five hundred small investors to come together to buy outright real estate for cash and participate proportionately in the rental income after costs and overheads. The small investor has got into the habit of assuming he/she must generate a % interest income or dividends on their small pot of money savings. This is a passive position. I suggest if the amount of savings is small (I do not offer a definition of "small"), the small investor should instead be proactive and take the initiative to bunch up with other like-minded small investors and in that way the overall amount would be significant. That therefore means operating something akin to a bank or a co-operative for holding a collection of small deposits. The exit route from the grouping for the small investor must be very clear and in writing from the outset to provide maximum facility to exit whenever the need or desire to do so arises for fairness (emergency, alternative investment opportunity, travel, interruption of steady earnings, etc. ). Secondly, the small investor must desist from the conditioning/greed in demanding the "market" level of return on their small savings. Such a grouping can then invest in ethical projects such as business ventures, infra-structure, community projects, parks and amenities, etc. Some noble examples in developing countries are before us: - A bank from Bangladesh offers unsecured small loans (up to £500 sterling) to women only for them to derive a living from arts, crafts, own manufacture, small retail, etc. It has been successful in Bangladesh and has just opened a branch in East London where the Bangladesh community is settled. - A Turkish company in Turkey that is owned with one share each for its small investors. It is very successful in its backing of ethical commercial ventures although it is facing trying times from the vested interests who are trying to find fault with it to close it down. If such successes can take place in developing countries beset with all kinds of impediments and loaded systems, why not replicate them in the western democratic countries where there is great freedom to create and operate such organisation? So, whilst a small individual by himself/herself cannot be a significant investor, a group of like-minded and harmonious small investors can be a formidable force. However, a sincere and competent leadership is a pre-requisite to keep the group together. Now, the crux of the matter is how many of such sincere and capable leaders exist? And, how many of such sincere and capable leaders take the trouble to put themselves forward to organise such groupings? I feel that is where this matter is stuck and we need to wait for a wonderful "can-opener" to set free this "ginny" to try to achieve the potential that we aspire to, an aim that is possible and that is in everyone's hands. Perhaps there is insufficient personal development, perhaps there is insufficient "Takwa" (= nobility of purpose?) Jaffer Manek, London, UK Discussion was lead in the froum of the: Islamic Banking and Finance Net Listserver [log in to unmask] ============================================================================== FINANCE-NET URL: http://www.muslimsonline.com/finance http://islamic-finance.net/forum.html Wa 'alaikum as Salaam ---------------------------------------------------------------------------- To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html ----------------------------------------------------------------------------