Is It Permissible for Me to Invest in the Stock Market?

Answered by Shaykh Yusuf Weltch

Question

My family is already living on haram earnings like the house we own and the source of our income is haram. So can I make an investment in the stock market because somewhere in my mind it is like we are already into haram so it will make no difference?

Please advise me on this matter because I am the sole earner in my household and need a passive source of income.

Answer

In the Name of Allah, the Most Merciful and Compassionate

Short Answer

It is permissible to invest in the stock market as long as one invests in companies whose main activity is permissible in the Sacred Law. [Usmani, Fiqh al-Buy’u]

Illicit Sources of Income

You mentioned that your family’s income is of a prohibited source (haram). This means that those people in your family who are earning an income for the others are engaged in an occupation that is strictly prohibited and that their entire income is from that illicit source. This seems unlikely.

Unless, your family owns a bar, sells drugs, owns an interest based bank, or the like it is unlikely that the entire household income is prohibited. [Usmani, Fiqh al-Buy’u]

Partially Prohibited Income

Many people fall into sin regarding income, but few people earn all of their income from illicit sources. Many people have a job that is permissible, but invest their money in interest based banks, funds, etc… Thus, the principle wealth (which is the majority) is permitted and the interest is prohibited. [Usmani, Fiqh al-Buy’u]

Allah Most High says, “O believers! Fear Allah, and give up outstanding interest if you are (true) believers. If you do not, then beware of a war with Allah and His Messenger! But if you repent, you may retain your principal—neither inflicting nor suffering harm.” [Quran; 2:278-9]

A person with a partially prohibited income can transact, invest, donate, gift, etc… as long as one does not use above the percentage of the permissible wealth. [Usmani, Fiqh al-Buy’u]

Islam is Not Zero-Sum

The fact that you are entangled in some sin relating to finances, does not mean abstaining from other sins is of no benefit. There were people of the early Muslims who were major sinners, robbers and criminals, yet they would still give charity and do certain acts of worship. When they would be asked about it, they would say, “I want to leave some connection between Allah and I, so that one day I can sincerely repent.”

Though, you may, as a family, become accustomed to having your income from illicit sources, the opportunity to repent to Allah is always there. You will find, once you repent and rectify your situation, that Allah Most High will give you such blessing in your home, wealth, family, etc… that no money could ever buy.

Hope this helps
Allah knows best
[Shaykh] Yusuf Weltch
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Yusuf Weltch is a teacher of Arabic, Islamic law, and spirituality. After accepting Islam in 2008, he then completed four years at the Darul Uloom seminary in New York where he studied Arabic and the traditional sciences. He then traveled to Tarim, Yemen, where he stayed for three years studying in Dar Al-Mustafa under some of the greatest scholars of our time, including Habib Umar Bin Hafiz, Habib Kadhim al-Saqqaf, and Shaykh Umar al-Khatib. In Tarim, Shaykh Yusuf completed the memorization of the Qur’an and studied beliefs, legal methodology, hadith methodology, Qur’anic exegesis, Islamic history, and a number of texts on spirituality. He joined the SeekersGuidance faculty in the summer of 2019.