by Umar Farouk Kabir | Mar 8, 2022 | Business & Finance
What are the best Halal investing apps? Times have changed drastically, and when great changes occur, it affects a lot of facets of life. One such facet is religion. Not every change is a welcomed one when put under several filters such as religion. Religion is a way of life, one’s belief, one’s creed. To be asked to change such things as beliefs and creeds are asking for too much.
In Islam, investment is indeed allowed, but – and it is a big ‘but’, some things have to be taken into consideration so as not to go against the shariah law and commandments.
Searching for the right investment app is sometimes arduous, and when you factor in an investment app that is halal, you are left with quite the task. In this article, we have gathered the best halal investment apps that will save you a lot of time when looking for halal investing apps. Read on to find which apps to use in order to make some serious cash—the halal way, of course!
What is The Shariah Law?
Shariah law is a set of Islamic laws that govern the principles, spiritual, mental, and physical conduct of Muslims. Regarded as God’s command for Muslims, shariah law is essentially Islam’s legal system.
There are four primary sources of shariah law:
- The Quran
- The Hadith
- The Ijma (opinions of Islamic scholars)
- Qiyas (Qiyas is the process of comparing difficult questions of doctrine with similar cases settled by the authority of the Holy Book and Sunnah).
With the shariah set in place as means of guidance, it is only natural for there to be rules set out regarding investment.
What is Halal Investment?
Halal investing apps in recent times have become a hot topic in the global Muslim community. Halal investment refers to the several types of investments that are allowed, and sanctioned by the shariah law; this makes them 100% lawful.
As a Muslim, you are advised to always carry out extensive research before investing in any business venture, not just because of the obvious risk, but to find out if it is allowed in Islam, in other words, halal.
What Constitutes a Haram Investment?
The answer here is quite simple direct; and investment opportunity that is involved in prohibited businesses such as gambling, alcohol, cigarettes, and the likes are considered haram, i.e. they are prohibited.
With all this being said, there are a number of applications that offer halal investment opportunities. Here we will list the 7 best halal investing apps.
7 Halal Investing Apps
1. Sukuk Investment
First up in our list of the 7 best halal investing apps is the Sukuk Investment. Sukuk bonds are like your typical long-term loan bond, but they will not issue you a certificate indicating periodic payments with interest.
This is because, in Islam, lending money with a view to receiving interest is haram. Rather, you will own a part of the asset and gain from whatever the asset gains.
2. M1 Finance
M1 Finance is a halal investing app that provides an intriguing blend of automated investing coupled with a wide array of portfolio customization to go alongside borrowing and spending features. You can select from expansive pre-built portfolios called “pies” (a reference to portfolio pie charts) or build your own strategy.
You will easily find the M1 Finance app a good halal investing app for obvious reasons. For one, its interface is quite simple; nothing spells ease like a user-friendly interface. Also, Opening an account is simple and you can start investing with an amount of as little as $100.
The clients can trade without any fees or commissions. The brokerage has introduced an innovative way when it comes to portfolio creation.
3. Fundrise
Next up on our list of the 7 best halal investing apps is Fundrise. Fundrise is an online real estate firm that offers investment opportunities in the private real estate sector. What makes this app so great is that it offers low minimum investment fees and it is also open to all investors. With just one investment entry, you can create a broad portfolio.
The portfolio may include a great number of real estate assets. You can also avail the assistance of a team of experienced real estate professionals.
Fundrise deals mostly in real estate investment trusts which generally invest in income-producing real estate through the purchase and management of buildings or by holding mortgages. Fundrise also offers eFunds, in which investors’ money is used to buy land, develop housing and then sell it.
Also, Fundrise offers what it calls an Interval Fund, which offers high liquidity and diversification.
4. Robinhood
Robinhood has made our list of best halal investment apps for reasons you will soon find out. One of its earlier glaring advantages is that it offers no charging commissions for cryptocurrency and stocks, although that is no longer the case seeing as a number of its competitors adopted the same strategy. The broker recently added cash management services and a recurring investment feature in an effort to attract new customers and deepen the financial relationship with existing customers.
While investing in the ETF, you can diversify your holdings. For this purpose, you must try to buy a wide range of stocks in just one investment. After that, you can execute more sophisticated strategies and secure bigger positions.
5. Amana Funds
Next up in our list of the best halal investing apps is Amana Funds. For many who don’t know, Amana is an Arabic word meaning fidelity, honesty or sincerity. This goes well in showing its users that this is an investment app where Muslims can rest easy knowing their funds are in safe hands. Nothing beats earning some cash in halal ways!
Amana Funds is a non-profit investment company with its base in North America. For the sake of transparency, Amana Funds allows its clients to keep tabs on the business activities so they can aware of the sources through which the company generates its revenues.
6. Wahed Invest
Another halal investing app that offers its clients the opportunity to invest money ethically without having to worry about going against the divine rules of Islam is Wahed Invest. Wahed is Arabic word meaning unique, or one.
Wahed invest the new wave in the world of shariah-compliant investment apps. In addition, Wahed invest is the largest Islamic Robo Adviser based on the number of clients counted is the United States after just one of its releases.
Just like M1 Finance, Waheed allows users to open an account with a minimum of $100 and invest in a portfolio of ethically responsible stocks, Islamic bonds, and gold. The company utilizes the services of a full-time Ethical Review Board to ensure all returns are following Islamic principles.
7. ShariaPortfolio
Last, but certainly not the least is ShariaPortfolio. This app focuses solely on ethical and halal investment options.
According to experts, ShariaPortfolio offers the best halal investment strategies. It utilizes three key points to help clients to make the right investment moves. The key points include:
- Client preferences
- Financial aspirations
- Risk tolerance
When these three key points are taken into consideration before making a move, they are bound to improve the chances to reap huge rewards.
Conclusion
When inclusion is done the right way, it is beautiful and admirable. It is a good thing to see that financial apps are making room for halal investments, thereby catering to the needs of Muslim clients worldwide.
As promised, we have delivered the best halal investing apps currently on the market. You no longer have to do the arduous task of combing the internet looking for the right app; we have narrowed down the list for you considerably.
Stay tuned and be sure to check out Northpad for more eye-opening financial write-ups. What halal investing app is your favorite? Let me know in the comments!
FAQs on Best Halal Investing Apps
What is the best halal investment?
In terms of investment, gold is seen as a secure, conventional, and Sharia-compliant option. Gold is easy to get and invest in, and it is not considered to be in violation of any Islamic finance laws.
Is investments haram in Islam?
No. as matter of fact, investment is not haram in Islam. What is haram is investing in business ventures that are not in line with the sharia laws; such as gambling, alcohol, and tobacco.
How can I invest halal?
Investing in enterprises, often known as equities or stocks, and fixed income assets, such as Sukuks (Islamic bonds) or real estate, are the two main categories of halal investing. Both forms of investments must adhere to Islamic rules in order to be considered Halal.
Are investment companies halal?
Some investment companies are halal as they follow the rules laid down in the sharia; this makes them halal. Other companies aren’t because the sharia law is used as a means of guidance.
Which investment is halal in Islam?
The major types of halal investments are Sukuk Bonds, Jarrah, and Murabaha.
Is Fundrise Halal?
Yes, Fundrise is a halal investing app that is compatible with the Shari’ah
by Umar Farouk Kabir | Nov 29, 2021 | Business & Finance
Regardless of the scale of your business, how well you manage your cashflow will decide whether it ultimately succeeds or fail. Cash flow could be regarded as the blood that flows within the veins of your business.
According to a study carried out by Jessie Hagen of US Bank, cashflow is the primary reason why a business fails due to financial reasons. In fact, he estimated that a whopping 82% of the time, businesses crumble due to poor cashflow management.
The importance of knowing how to manage cashflow can’t be overemphasized, but before that, you have to understand what cashflow is and why it’s so important.
What Is Cashflow?
Cashflow can be defined as the amount of money that comes in and out of your business in a specified period of time. Your cashflow can either be positive (in the green) or negative (in the red). We’ll drop the heavy grammar and explain it in simple terms.
You have a positive cashflow when there is more money coming into your business than you have leaving it i.e. the money being earned is greater than the money being spent. While you have a negative cashflow when your business spends more than it makes within a specified period. A negative cash flow indicates there is an imbalance in the revenue stream. Bear in mind that it doesn’t necessarily equate to loss.
What Is the Difference between Cashflow and Revenue?
Cashflow and revenue should in no way be confused with one another as there is a clear difference between the two. Revenue is the amount of money that a company or business earns from the sale of products and services, while cashflow is the net amount of cash that comes into and leaves a company or business. Where revenue measures the effectiveness of a company’s sales and marketing, cashflow indicates the liquidity of a company.
Now that we have established a firm understanding of cashflow, we will see the various ways in which you can manage your cashflow.
How to Calculate Cashflow
You cannot manage your cashflow effectively without knowing how to calculate it. There are two generally accepted methods of calculating cashflow statements. They are:
Direct Method
This is a cash-based operation; what that means is that this method for calculating cashflow involves subtracting from cash sales only those operating expenses that consumed cash. For this to be successful, you need to record every cash transaction, and then deduct cashflow from the inflow. That includes items such as cash receipts, interest received, and income tax payments
Indirect Method
In this method, a technique known as accrual accounting is employed. Accrual accounting represents the liabilities and non-cash-based assets recorded over a period of time. In short, accrual accounting is defined as the entry of transactions into accounting books as they occur even without receiving payment for those goods or services.
Small scale businesses prefer this method to record cash received and cash payments as they can record transactions whenever they happen without having to wait for when they receive the cash payment.
You will have to use income statements to eliminate transactions that do not reflect cash transfers.
Methods of Managing Cashflow
1. Bookkeeping
It is next to impossible to run a smooth business operation without having a firm grip on what bookkeeping is.
Bookkeeping is the process of keeping tabs on all of your business’s financial transactions i.e. what goes in and what goes out. It lets you see exactly where your business is spending money, where your income is coming from, and also tax deductions.
This is the single most important step in managing cashflow.
2. Cashflow Statement
Cashflow Statement is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents. Generating cashflow statements can easily be done when you have an accountant. If you don’t, you can use a software or spreadsheet to generate your cashflow Statement.
Go to QuickBooks for easy cashflow statement generation and forecast
3. Analyze Your Cashflow Statement
The next step in managing your cashflow is by analyzing the cashflow statement generated by your account, spreadsheet, or software. This analysis is important because it helps you understand how money moves through your business.
A good scenario is when your revenue streams are not as effective as they should be i.e. they aren’t producing as much money as projected. Cashflow analysis will help to highlight the problem. When a business is not producing money as much as it should and it maintains the amount of money it spends, eventually it’ll end up in the red zone, a negative cashflow.
4. Credit Management
Credit management is another good measure for managing cashflow problems. When you give out credit to your clients, your cash in-flow drops because you record the credit that you give out as accounts receivable rather than as cash payments. When you sell products on credit, you normally give your clients a certain window to pay for those products. But in the meantime, your cash flow drops because you paid for the inventory with cash that is yet to receive a payment from the client(s).
5. Reduce Spending Where Necessary
When you overspend because of unnecessary expenses, it affects your positive cashflow in the sense that it reduces it. So cutting down on spending cash unnecessarily increases cash flow.
6. Shorten Accounts Receivable Window
Account receivable or AR is any amount of money owed by customers for purchases made on credit. ARs are always marked as current assets on the balance sheets.
When you, as a business owner or company, sell products on credit, depending on how long payment is due, it could affect cashflow. When the window is too wide, it will affect your cashflow negatively.
Shortening the accounts receivable window ensures you always have more cash flow as credits are paid quicker.
7. Provide Discounts on Products
One might raise an eyebrow at this, but really, it is a good way of ensuring quicker payments on products.
For instance, if your payment terms allow a 30-day window for payment after the receipt of an invoice, with at least a 2% discount if paid within the first 14 days, this will encourage quick credit settlements.
Bear in mind that you can offer more, less, or no discount for payment, depending upon your needs and your customers’ payment habits.
Conclusion
There’s a saying that “revenue is vanity, profit is sanity, cash is reality”. It is no overstatement that cashflow is indeed the lifeblood of any business. Managing cashflow is all about ascertaining when you’re going to have cash in hand, how to get more of it in your hands faster, and how to spend it wisely so as not to create cashflow problems.
Knowing how to manage your cashflow is a fundamental skill for effectively managing your business finances. Once you’re able to do this properly, the thing for you will be to grow your business to realize even greater profits.
You could also read on: Why 90% of Startups Fail and What to Do About It
by Umar Farouk Kabir | Nov 15, 2021 | Business & Finance
A lot of people these days are drawn to business for numerous reasons. Everyone wants financial freedom, having to call the shots yourself without being answerable to anybody. A business offers you that and so much more. Over the years, the numbers of individuals going into businesses have actually increased, but have you ever wondered about the success rates of all these startup businesses? It is quite disquieting to learn that a whopping 90% of startups fail. A study carried out back in 2019 discovered that 9 out of 10 startup businesses fail.
The numbers are scary, aren’t they? In this article, you’ll get to learn why nearly a hundred per cent of startup businesses fail and what to do about it.
Why 90% of Startups Fail
1. Inadequate Creativity
One of the reasons why 90% of startup businesses fail is due to a lack of creativity. Business is a combination of science and art if we’re being frank. Creativity is crucial to the success of any business. An entrepreneur needs to be creative enough to bring fresh and bright ideas to market their products and services in such a way that customers are drawn to them.
Wanting to go into business and having the capital to finance it isn’t enough, you need innovation in order to stay ahead of the curve. There are so many business ideas out there. This makes the competition pretty stiff. Jumping head-first into the business sector without a solid blueprint is just another recipe for disaster.
The solution to this is not to rush head-first into anything. Take your time. Think of ways to make your products and services unique. Come up with something new and fresh. Customers love new products, fun products, products that scream innovation.
2. Insufficient Research
Another reason why 90% of new businesses fail is insufficient knowledge backing them. For a startup business to be successful, proper and adequate research must be carried out regarding the products and market availability. This is one of the first things you need to know as an entrepreneur.
What is the general public in need of right now? Is the market readily available for me?
How much would it cost to finance this business?
What is the competition like and how can I stay ahead?
How do I generate clout for my business?
You need to ask yourself these questions and set out to find the solutions to these problems.
Check out these steps to help you make proper market research for starting up a business
3. Trying to Create the Perfect Product Right from the Get-Go
The problem with trying to create the perfect product at an early stage is that, regardless of all the hours put into research, you might still come up short in a real-world application. What you need isn’t a perfect product from the start, what you need is MVP.
No, not the most valuable player but Minimum Viable Product.
Minimum Viable Product refers to any version of a commodity that has enough features to be usable by early-stage consumers who can critique and provide feedback for the further development of said commodity. This is a very useful technique in the sense that by the time the product is fully developed, it will be something that customers really want for the reason that it was developed according to their taste.
Customer satisfaction is always a top priority for any business, and what better way is there to satisfy customers than to give them exactly what they want?
4. Lack of Desire and Passion for the Business
This is something that you should truly focus on a mental level. Let’s face it; the majority of people go into various businesses in order to make money. But if money is your only motivation, then it’s safe to say that your startup is bound to fail.
You need the desire and passion to seek to make a difference in the market with your goods and services. The need to make a difference will invariably fuel your innovation and push you to do more, to be more. Success doesn’t come without desire and perseverance.
A solid reason why 90% of startups fail is that entrepreneurs give up easily once they hit a bump in the road. Those who desire success dig in deep and find innovative ways to bypass their challenges, and in so doing, they open doors of opportunities for themselves.
Passion is one of the best qualities of an entrepreneureur, and if you lack it. Well…
5. Building a Business with the Wrong Team
As your business grows, you will need to keep up with the pace by hiring a team. It could be just one person or more, regardless, the type of people you hire will have an impact on your business. You do not hire an engineer to do the work of a doctor.
To avoid falling into the 90% statistic of failed startups, take your time and search around for the best people to help build your business to the level you want. We all need some help at some point in time, so why not get the best possible help for your business?
6. Inability to Adapt to Changes in the Industry
Another reason why 90% of startups fail is their inability to adapt. In order to be among the 10% who see their startup businesses thrive, you must be able to adapt to situations.
A market can be a turbulent place as things are in constant motion. Being able to adapt to these changes, even going as far as making those changes work in your favour is a priceless skill. With it, you will not only have the upper hand in dealing with competitors, but you will also have longevity in the business.
You must be able to see these changes and act accordingly in ways that will see you succeed.
90% of startup businesses fail because the business owners are unable to adapt.
7. Funding Issues
Another top reason why 90% of startups fail is largely due to funding; overfunding or underfunding. Underfunding occurs primarily due to insufficient research by the entrepreneur. When you venture into a business underestimating the cost to run that business, it will inevitably crash.
You might raise an eyebrow at how overfunding could make your startup fail. I mean, isn’t lots of money good? You may be right but not entirely. Overfunding for startups is a double-edged sword. When there are excess funds for a startup, it speeds up development and the business expands rapidly.
That sounds great, doesn’t it? Well, here comes the tricky part; when a startup business expands at that speed, it gives rise to more expenses in hiring personnel, product development, and marketing. The warning light illuminates when revenue can’t keep up with the massive expenses; this is what experts call a negative operating cash flow.
Conclusion
A startup may fail due to any of the reasons mentioned above. A problem known is half solved, isn’t it? If you are just starting a new business, you will do well to read this article carefully and avoid the mistakes that lead 90% of startup businesses to failure.
This article was written to help be part of the 10% that succeed.
by Johnson Temiloluwa | Jun 3, 2021 | Business & Finance
Every entrepreneur has a list of failures before their success stories as mistakes are inherent in life. It’s a normal phenomenon. However, common mistakes entrepreneurs are bound to happen and there are some that are avoidable if carefully thought about. Firstly, who is an entrepreneur?
An entrepreneur is generally defined as an individual who organizes or operates a business or business. In my own opinion, an entrepreneur is a person who starts a business or many firms, discovers and solves problems, and is creative, imaginative, opportunist, risk-taker, self-starter, and open-minded with the hopes of profiting from the venture.
Now that we know this, let’s take a run down through common mistakes entrepreneurs make in Nigeria.
Common Mistakes Most Entrepreneurs Make
1. Inadequate Capital
There’s something called “starters financial pit”. It is when an entrepreneur or startup desperately stays to search for funding 2 to 3 months after the launching of the startup.
It is highly advisable to get an extra stream of income or a stable one – it can include friends, investors, or even family members. Making sure the financial assistance coming from the source(s) is indeed stable and reliable is an important step that every entrepreneur should do. A minimum of 6 months financial buoyancy plan should be drawn and managed.
Starters’ financial pit is one that every entrepreneur wishes to never be in, but somehow end up in. You can avoid it by making adequate financial preparations.
2. A No-Plan Game
The popular phrase, “failure to plan is planning to fail” is indeed true. It is not only a common mistake every entrepreneur makes in Nigeria, but it is an impractical and unrealistic way to start a business or startup as an entrepreneur.
Plan is a detailed formulation of a program of action OR an orderly arrangement of parts of an overall design or objective.
Without a detailed formulation of a set of actions as an entrepreneur, it’s a failed start-up already before it even started.
This mistake of the no-plan game can be avoided by just having a plan. A well-thought plan. A plan includes Market research, content strategy, running ads, and many others.
3. Putting Together the Wrong Team
A team thrives and grows on teamwork. An ineffective and unproductive team fails at teamwork and fails at the business entirely. For the growth of any business, knowledgeable personnel that handle specific roles are highly needed.
Having a great team in place is equal to having an indispensable asset in your business. Find the right team and set business to sail.
4. Monetizing an Invaluable Business
I defined an entrepreneur as a person who discovers and solves problems. If you are not solving a problem, you are not an entrepreneur. A business is set to fail if it doesn’t have a target audience and targeted problems.
People put their money and trust in places that give value, something of relative importance to them. As an entrepreneur, if you do not have that, it’s a failed one right at the beginning, even more so monetizing an invaluable business. Value is offering a better solution to a problem than the existing products, providing a cost-effective product, and standing out, by bringing a unique approach to a business.
This is one common mistake every entrepreneur makes in Nigeria. It is bad enough that businesses are ventured into without the aim of providing value. It is worse because you just want to make a name and money by running a business on vibes and zero value. Think of business as a give-and-take situation. You give value and take their money.
5. Wrong Partnership
A business partner is meant to make the whole bulk of running a business simpler, and fun sometimes.
The problem will be if the partnership is one that doesn’t share the same views, visions, and plan for the business.
There will be disparity and in the long run, failure.
Getting a partner that shares the same views in any partnering entrepreneurship is key.
6. Not Improving Entrepreneurial Skills
An entrepreneur’s personal improvement is the improvement of the business. Don’t stay stagnant, make an effort to increase your standard and skills. You have most likely dodged a bullet if you take this step.
7. Poor Marketing
A business thrives on marketing. People become aware of what you do as an entrepreneur when you market it to them.
Sadly, this is one common mistake every entrepreneur makes. They focus on just one type of marketing strategy instead of being dynamic with it. Draw a marketing plan that targets every kind of customer.
8. Extravagant Office Set-Up
It’s no longer news that the world business is largely remote in this century and time. An extravagant office setup might be needless or not of topmost priority. If a workplace should be set up, it should be invested wisely.
9. Ignoring Customers’ Feedbacks
Feedbacks help to spot mistake and flaws in businesses. It also helps in understanding what the customers need and expect from you. In addition, it builds improvement and ignoring it will definitely wreck the business.
Also, poor customer’s service is a turn-off and a bad look for entrepreneurs
10. Obsessed With Competition
Focus on building the best possible business. If you are great, people will notice and opportunities will appear.
Mark Cuban
There is no win in an obsessive competition. It only leaves you worrying and never evaluating your growth. Furthermore, having a competitive spirit has its perks but only when it is healthy. Focus your energy on building your startup and being good at the values you give.
Conclusion
Trial and error might be a failure but, don’t stay there. Try and try again. Make sure you are avoiding common mistakes entrepreneurs make too while at it.
