[USER]

A friend (35 yo, F) with 2 elementary age kids, solo parent no child support asked me how she can save for retirement. She is Muslim.

She currently have 9K in cash, no IRA/401k because it’s against her religion to have her money grow?

She has 18k car loan, that’s her only debt. Anyone in the Islamic faith have tips that I can pass on to her?

[Tan]

As for your question, I would start with educating her on finances. There are halal investing options.

AMANA funds is a big one. She has to first get convinced that it is permissible, Muslim folks who are hesitant in investing or ones who question whether investing is halal will often avoid investing.

I believe she has to avoid bonds. But general index funds are permissible.

[Nabila]

As others have pointed out this is a common misconception and she should learn about “Islamic finance” and “halal investing”.

You’re a good friend for finding out this info for her!

[Rajo]

As others have said please point her to halal investing options.
It’s not true that you can’t grow your money. It’s about “how” you grow your money.

I believe all the Abrahamic religions have similar tenets, but enforced to varying degrees.

[Jimansy]

It is not against their religion to have her money grow. They just aren’t allowed to participate in usury (interest).

Stock market growth is capital gains, not interest.

Though I imagine it is difficult for Muslims to find companies in the west to invest in that do not engage in usury or other aspects against their religion

[Maissa]

Interest is problematic. But buying mutual funds or etfs or stocks is accepted by the strictest interpretations because it is not a loan with interest (like term deposits or bonds)

[Ali]

The only problem is 401K Funds with Bonds. So, 100% Equity Funds are ok, the problematic ones are the target date Funds that hv Bonds in them.

Otherwise, there’s multiple Halal investment options available today.

[Author]

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