Managing Your Money and the Halal Economy with Harris Irfan
The Thinking Muslim
Strategic Wealth Allocation in a Diverse Financial Landscape
Islamic finance emphasizes halal investing, which mandates constructing a portfolio aligned with Sharia principles. Muslims predominantly invest in three asset classes, with real estate being a primary choice due to its tangible nature and income-generating potential. However, overexposure in real estate is a concern, with a recommended allocation of no more than 15% of personal wealth to this asset class. Additionally, many Muslims sometimes resort to conventional financial products, including pensions, due to the limited availability of Sharia-compliant options. In the UK, for instance, a Self-Invested Personal Pension (SIPP) allows individuals to self-select their investment choices, which could include compliant alternatives, thus providing an avenue for better-aligned investment strategies.
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