How to Invest Halal without Losing All Your Money and Hair

You really want to invest your money because you know it is getting eaten away by inflation every day.

You also know that if you invest reasonably well, you could roughly double your money in just 10 years[1].

You’re not silly – but you’ve not actually invested due to the following concerns:

  1. You just don’t know which investment companies are any good.
  2. You don’t know which companies are halal and fully sharia-compliant.
  3. You don’t know how to spread out your portfolio in a way that doesn’t expose you to too much risk.
  4. You don’t know where to go to get the education/info you need to address the above concerns.

I have always been keen on investing (I was the sort of kid who started investing with my dad’s account as I was under 18 at the time!) and over the decades learnt a lot from my successes and failures.

But I appreciate not everyone will be as interested in investing – so in this article I condense down my experiences and break down a 5-point plan to address the key concerns most people have when it comes to investing.

How to pick good investment companies

Good investment companies are run by experienced, trustworthy and reputable people.

You should do the following checks to make sure the company is legit:

  1. Check if the company is regulated – and if they’re not ask them why not. Not all companies need to be regulated but always good to check and their answer will tell you how thoughtfully they’ve thought about customer protections.
  2. Look at their track record and experience. Check out their Linkedin and social media profiles. Make sure they look like professionals rather than a fly-by-night operation. Warning signs are if the team behind the investment company have no background in investment or finance.
  3. Look to see what neutral and reputable comparison websites say. For halal investments there’s really only one right now: Our Halal Investment Platform.
  4. Look at their reviews online. Reviews aren’t always fully reliable are surprisingly good at giving you a really good sense of the company. Trustpilot is a great place to start. IFG is on there too.

How to make sure the investment company is halal

Okay, you’re happy the company is legit, but is it halal?

I appreciate that Islamic finance for the uninitiated is a somewhat technical area. Terms like musharakah, mudarabaha, bai inah, tawarruq and istithmar are thrown around happily.

But your response to them is “come again?”

So here are three super effective ways of making sure something is halal without needing a degree in Islamic finance:

  1. Check if the investment company has been sharia-certified by a reputable Islamic scholar. You find out if the Islamic scholar is reputable by looking at their qualifications and just Googling them. If they are someone who is very active and involved in a bunch of different companies, that is usually a good sign.
  2. If the company doesn’t have an official sharia sign-off, then look at whether some reputable neutral part has confirm their claim that they are halal. One example of that would be our Halal Investment Platform.
  3. The other place you can check a company’s claim is by consulting with your trusted Islamic scholar. This does not always mean your local Islamic scholar – as they may not have the qualifications to effectively opine on investment companies. However you can quickly ask qualified muftis on the IFG Forum.

How to diversify your portfolio

So now you have a list of halal and reputable investment companies to choose from – how do you actually allocate your savings across these investment companies?

What are the metrics and rules you should be adhering to when it comes to allocation of your portfolio?

Ultimately though, if you are investing a few thousand pound, we recommend checking our Halal Investing for Busy Professionals course. This will systematically take you through the relevant asset classes, explain how you should think about your investment objectives and give you some portfolio allocation examples.

As a really really rough rule of thumb you should be doing the following:

Asset Class Allocation of your portfolio
Stocks and Shares 30-50%
Property (or sukuk if you can get them) 30-50%
Alternative Assets (find out more here) 10-30%


So for example, a 40/40/20 allocation across those three groups could be a middle-of-the-road kind of approach.

You can see a list of all three types of asset class and compare between them on our Halal Investment Platform.

Where to learn how to invest

So now you have a good working knowledge of the various knobs and levers on this Halal Investing car and you know where you want to go, but you are still a little uncertain about actually getting in and starting the engine and pressing down on the accelerator.

In order to get confident enough to properly start investing I would recommend 3 things:

  1. Subscribe to our mailing list. We send out weekly emails and if you read them, watch our Youtube, and podcast for about a month or two you’ll have picked up a ton of stuff and get a real “flavour” of halal investing.
  2. Check out our free and paid courses.
  3. Start small with just a few hundred pounds and dip your feet in. This is the equivalent of just lightly pressing the accelerator to get a feel of how the halal investing car moves.

Final Thought

Ultimately, you must remember that there will never be enough information in the world. Investing is never about guaranteed returns and no risk. Even if the lowest-risk and safest investment there are always some niggles.

But you sitting on the sidelines is not being “safe”. You are losing money every day due to inflation. So do all your research and follow all the steps above but don’t be that guy/girl who doesn’t invest for 3 decades and is still asking sceptical questions when he is 55.

It’s your money at the end of the day – you just can’t afford to sit on it for years and years.


[1] Assuming a 7% annual return rate, compounding annually, with an inflation rate of 1.5%.

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