Financial freedom. For the majority of us, that is the ultimate goal. We will need a lot of discipline, strategic financial planning, and hard work to pull it off.
There are several actions we need to take such as having a clear budget and shrewd spending. But one key method, without doubt, is being able to make wise investments. This can be tricky as there are multitudes of financial products that we can invest our money in.
Islamic finance as a worthy investment
Islamic finance is a system that follows Islamic Laws (Shariah) principles and Islamic-based economics. Money lending (interest-based) as well as investing in businesses are among the prohibited elements.
With each passing year, Islamic finance continues to grow in popularity. Its products are turning into the choice of not only Muslims but also non-Muslims. This is especially true here in Malaysia, considering that the country is a pioneer in the industry.
Among the reasons for its rise in popularity include:
- Fairness and protection from high risks
- Safe from crisis
- Fixed and clear fees
- Lower penalties
- Takaful coverage
Among the products that Islamic finance offers are gold investment accounts. The world’s leading Islamic scholars have already issued a collective Fatwa on the trading of gold. They have agreed that the transactions are permitted under Shariah laws.
Consequently, this has helped accelerate the development of new and innovative gold-backed products. Consumers across the Islamic world can now also benefit from the wealth preservation properties of gold.
Why invest in gold?
Gold is respected throughout the world for its value and rich history. It has been interwoven into cultures for thousands of years. Although gold is no longer the basis of the international monetary system, its status as a pillar of stability persists. This is particularly important in today’s uncertain economic environment.
Gold has historically been an excellent hedge against inflation. Its price tends to rise when the cost of living increases. When fiat currency loses its purchasing power to inflation, gold tends to be priced in those currency units. Therefore, it tends to rise along with everything else. During the past 10 years, gold has risen over 367% in US dollar terms and by more in currencies used in Islamic countries.
Seeing that it has no default risk and performs well in times of crisis, gold can be considered the ultimate safe-haven asset. Furthermore, it is a Sharia-compliant safe-haven asset.
Gold investment in Malaysia
Gold investment in Malaysia offers a secure asset class for investors through two different ways, physical gold and “paper gold” (gold investment account). Investment in physical gold enables investors to diversify their portfolio. Gold investment account, on the other hand, allows investors to make deposits when gold prices are low and withdraw the funds at a profit when the gold price rises.
With a gold investment account, you can engage in the purchase of gold based on the bank’s prevailing selling price, as well as, the selling of gold based on the bank’s prevailing buying price. The difference between the bank’s buying price and selling price is your profit or loss.
For example, if you bought one gram of gold at a selling rate of RM130 per gram. It is then sold the gold at a buying rate of RM140 per gram. Your profit from this particular investment is RM140 – RM130 = RM10.
Get today’s best Islamic financing offers in Malaysia
There comes a time when we would want to apply for a personal loan. The reasons could be for debt consolidation, business, travel, marriage, home renovation, etc. That’s where Islamic finance comes into the picture. As mentioned earlier, it has several advantages over conventional financing.
AsSidq.com is your one-stop platform for Islamic financial products. We help match you with the best shariah-compliant financial offers from our banking and financial partners, based on your requirements and needs.
We keep your financing completely free from unethical elements including riba (usury), gharar (deceit), maysir (gambling) and zulm (immoral practices).
The service is provided free, simple to use and you will be matched instantly. Apply now and get approved in no time!