Session 3 Wealth Management and Financial Planning -An Islamic Perspective Within The Context of Maqasid Al Shariah Prof. Dr. Mohamad Akram Laldin, Executive Direc tor of ISRA
Introduction Wealth in Islamic Perspective Understanding Maqasid al-shari ah Maqasid al-shari ah guidelines in Wealth Management and Financial Planning Conclusion
Wealth in Islamic Perspective Al-Quran provides comprehensive insights and principles on the nature of wealth and wealth spending and planning by human being. Wealth (Mal, pl. Amwal) Nature of Wealth Human Attitude towards Wealth
Nature of Wealth 1. Wealth is Fadl Allah to human being (al-jumu ah: 10): ك ث ير ا ل ع ل ك م ت فل ح و ن ف إ ذ ا ق ض ي ت ٱلص ل و ة ف ٱنت ش ر وا ف ى ٱأل رض و ٱبت غ وا م ن ف ضل ٱ لل و ٱذك ر وا ٱ لل And when the Prayer is finished, then may ye disperse through the land, and seek of the Bounty of Allah: and celebrate the Praises of Allah often (and without stint): that ye may prosper. 2. Wealth is described in Al-Quran using the word al-khayr which means Good (al- Baqarah 272-273): و م ا ت نف ق وا م ن خ ير ف ل نف س ڪم و م ا ت نف ق ون إ ل ٱبت غ اء و جه ٱ لل و م ا ت نف ق وا م ن خ ير ي و ف إ ل يڪم و أ نت م ل ت ظل م و ن Whatever of good (khayr) you give, benefits your own soul and you shall only do so seeking the "Face" of Allah. Whatever good (khayr)you give, shall be rendered back to you, and you shall not Be dealt with unjustly. Al-Maraghi (1946: Jld.2, p 129): Al-Quran describes al-mal as al-khayr to show that wealth is not only naturally good but it should be utilized for good purposes only.
Nature of Wealth 3. Wealth as Amanah (al-hadid: 7): آم ن وا ب ا لل و ر س ول ه و أ ن ف ق وا م م ا ج ع ل ك م م س ت خ ل ف ين ف ي ه ف ال ذ ين آم ن وا م ن ك م و أ ن ف ق وا ل ه م أ ج ر ك ب ي ر Believe in Allah and His messenger, and spend of that whereof He hath made you trustees (mustakhlafina fihi); and such of you as believe and spend (aright), theirs will be a great reward. 4. Wealth as Ibtila (test) (ali-'imran: 186): ل ت ب ل و ن ف ي أ م وال ك م و أ ن ف س ك م و ل ت س م ع ن م ن ال ذ ين أ وت وا ال ك تاب م ن ق ب ل ك م و م ن ال ذ ين أ ش ر ك وا أ ذى ك ث يرا وإ ن ت ص ب ر وا و ت ت ق وا ف إ ن ذل ك م ن ع ز م األ م ور Ye shall certainly be tried and tested in your possessions and in your personal selves; and ye shall certainly Hear much that will grieve you, from those who received the Book before you and from those who worship many gods. But if ye persevere patiently, and guard against evil,-then that will be a determining factor in all affairs. Wealth is essentially belongs to God alone Human being are granted wealth as amanah to play their role as Khalifah on earth. It, at the same time, is a test (ibtila ) to him. Human being should be responsible in utilizing and managing wealth.
6 UNDERSTANING MAQASID AL-SHARI AH ISRA األكاديمية العالمية للبحوث الشرعية International Syariah Research Academy for Islamic Finance
The Meaning of Maqasid al-shari ah The ultimate objective of Maqasid al-shari ah is to serve the interests (jalb al-masalih) of all human beings and to save them from harm (daf almafasid). Al-Ghazali (d. 1111 CE) defined maqasid al-shari ah as The very objective of the Shari ah is to promote the well-being of the people, which lies in safeguarding their faith (din), their lives (nafs), their intellect ( aql), their posterity (nasl), and their wealth (mal). Whatever ensures the safeguarding of these five serves public interest and is desirable, and whatever hurts them is against public interest and its removal is desirable.
The Dimensions and Hierarchy of Maqasid al-shari ah 8 MAQASID AL-SHARI AH DIMENSIONS: (A). Din (Religion); (B). 'Aql (Intellect); (C). Nafs (Life); (D). Nasl (Lineage); (E). Mal (Property). MAQASID AL-SHARI AH HIERARCHY: (1) Daruriyyat (the essentials needs); (2). Hajiyyat (the comforts needs); and (3). Tahsiniyyat (the embellishments needs). Ibn al-qayyim al-jauziyah. الش ر يع ة م ب ن ي ة ع ل ى م ص ال ح ال ع ب اد
Hifz al-mal (Wealth Protection) DARURIYYAT Masalahah Facilitation HAJIYYAT Mafsadah Prevention TAHSINIYYAT
10 GUIDELINES OF MAQASID AL- SHARI AH IN WEALTH MANAGEMENT AND FINANCIAL PLANNING ISRA األكاديمية العالمية للبحوث الشرعية International Syariah Research Academy for Islamic Finance
Maqasid al-shari ah in Wealth Management & Financial Planning Wealth Management & Financial Planning Positive Imperatives Negative Prohibitions Realising Maslahah Preventing Mafsadah
Negative Prohibitions towards Wealth 1. Prohibition of Tabzir (Wastefulness) (al-isra, 26-27): وآ ت ذ ا ال ق ر بى ح ق ه و ال م س ك ين و اب ن الس ب يل و ل ت ب ذ ر ت ب ذ يرا )( إ ن إ خ وان الش ياط ين و كان الش ي طان ل ر ب ه ك ف ورا كان وا ال م ب ذ ر ي ن And give the relative his right, and [also] the poor and the traveler, and do not spend wastefully. Indeed, the wasteful are brothers of the devils, and ever has Satan been to his Lord ungrateful. Mausu ah al-fiqhiyyah al-kuwaitiyyah (vol. 4, p. 177) defines tabzir as to spend wealth not in a purposive thing or spending on the place that is not needed. This action refers to two meanings: (1) spending wealth not in what is needed and unnecessary, and (2) spending wealth not in appropriate way as desired by Shari ah.
Negative Prohibitions towards Wealth 2. Prohibition of Israf (Excessiveness) (7:31). ي ب ن ى ء اد م خ ذ وا ز ين ت ك م ع ند ك ل م سج د و ڪل وا و ٱشر ب وا و ل ت سر ف وا إ ن ه ۥ ل ي ح ب ٱلم سر ف ين O children of Adam, wear your beautiful apparel at every place of worship, and eat and drink but be not excessive; indeed, He does not like the excessiveness. Israf means spending wealth more than what is necessary or beyond the sufficient level of what is needed. Al-Mawardi in his tafsir (2/218) says, Israf means a wilful overspending of wealth or overuse of property when the actual purpose may be served by lesser spending or use.
Negative Prohibitions towards Wealth 3. Bukhl (Stinginess) (al-nisa : 37): ال ذ ين ي ب خ ل ون و ي أ م ر ون الن اس ب ال ب خ ل و ي ك ت م ون م ا آت اه م للا م ن ف ض ل ه و أ ع ت د ن ا ل ل ك اف ر ين ع ذ اب ا م ه ين ا Who are stingy (bukhl) and enjoin upon [other] people stinginess and conceal what Allah has given them of His bounty - and We have prepared for the disbelievers a humiliating punishment The meaning of bukhl refers to three things: It is an attitude that would prevent wealth to be spent in its proper use in fulfilling individual needs or the needs of his family. It is an attitude of unwillingness to share wealth with others. It is also an attitude that would prevent individual doing what Allah has ordered to do. In this case, bukhl character will prevent someone from spending his wealth in the way of Allah (fi sabilillah).
Positive Imperatives towards Wealth 1. Wise and Moderation in Spending (al -Furqan: 67): و ٱل ذ ين إ ذ ا أ نف ق وا ل م ي سر ف وا و ل م ي قت ر وا و ڪان ب ين ذ ٲل ك ق و ام ا And [they are] those who, when they spend, do so not excessively or sparingly but are ever, between that, [justly] moderate (al-furqan: 67) Tawassut / wasatiyyah is between two extrem attitudes: ifrat dan tafrit. Ifrat: too stingy in spending wealth even in necessary things. Tafrit: too loose in spending wealth even in unnecessary things
Positive Imperatives towards Wealth 2. Priority in Wealth Spending: Self and Family (al-baqarah: 215): ي س أ ل ون ك م اذ ا ي ن ف ق ون ق ل م ا أ ن ف ق ت م م ن خ ي ر ف ل ل و ال د ي ن و األ ق ر ب ين و ال ي ت ام ى و ال م س ا كين و اب ن الس ب ي ل ب ه ع ل يم و م ا ت ف ع ل وا م ن خ ي ر ف إ ن للا They ask thee, (O Muhammad), what they shall spend. Say: that which ye spend for good (must go) to parents and near kindred and orphans and the needy and the wayfarer. And whatsoever good ye do, lo! Allah is Aware of it (al-baqarah: 215). و ي س أ ل ون ك م اذ ا ي نف ق ون ق ل ال ع ف و ك ذ ل ك ي ب ي ن للا ل ك م ا ل ي ات ل ع ل ك م ت ت ف ك ر ون They ask thee what they should spend (in charity). Say (Spend) what is beyond your needs (al- afw). The word al- afw according to al-maraghi (2/146) means something extra (al-fadl or al-ziyadah) above one s needs and his family and after spending the obligatory spending (such as zakāh and others).
Positive Imperatives towards Wealth 3. Spending for Good Purposes (Fi Sabil Allah) (al-hadid: 10: و ما ل ك م أ ل ت ن ف ق وا ف ي س ب يل للا و لل م يراث الس ماوات و األ ر ض ل ي س ت و ي م ن ك م م ن أ ن ف ال ف ت ح و قات ل أ ولئ ك أ ع ظ م د ر ج ة م ن ال ذ ين أ ن ف ق وا م ن ب ع د و قات ل وا و ك لا و ع د للا ال ح س نى ت ع م ل ون خ ب ير ق م ن ق ب ل و للا ب ما And what cause have ye why ye should not spend in the cause of Allah?- For to Allah belongs the heritage of the heavens and the earth. Not equal among you are those who spent (freely) and fought, before the Victory, (with those who did so later). Those are higher in rank than those who spent (freely) and fought afterwards. But to all has Allah promised a goodly (reward). And Allah is well acquainted with all that ye do. Imam al- Zamakhshari (1407H: vol.4, p. 473) reminds that wealth is a test (ibtila ) whether it is spent in the way of Allah (fi sabilillah) or in the evil way (fi sabil alsyaitan).
Positive Imperatives towards Wealth 4. Spending Wealth in accordance with the Hierarchy of Needs (al-maqasid al-shari ah): Spending for Daruriyyat Needs: Spending in the essential needs that are important to normal order in society as well as to the survival of individuals, in their religious and worldly affairs. The Daruriyyat constitutes all-encompassing needs of human being that should be satisfied for a sustainable life and wellbeing. Failure to spend wealth in Daruriyyat needs would lead to life destruction, chaos and collapse of normal order in individuals lives and/or society
Spending for Hajiyyat Spending in the complementary needs that supplement the essential needs. Spending in Hajiyyat would facilitate people s affairs in a better way and removing severity and hardship in their life. The absence of spending in Hajiyyat needs does not pose a threat to the very survival of normal order of life. It only brings hardship or inconvenience in human life. Spending in Hajiyyat should be done only if the Daruriyyat needs are preserved.
Spending for Tahsiniyyat Needs Spending in the embellishments needs whereby the realisation of those needs leads to life s improvement (tahsin), beautification (tazyin), and perfection (kamaliyyat). Islam enjoin human being to satisfy all Tahsiniyyat needs which are desirable without any violation of good moral standards (makarim alakhlaq) or an excessive or extravagant lifestyle (mahasin al- adat)
Conclusion Wealth is perceived in Islam as something which is good in nature and being created for human wellbeing in pursuing his role as khalifah of Allah. To preserve the nature of wealth as al-khayr and fadl Allah, human being is expected to follow the guidelines in wealth spending and management and financial planning. In maqasid al-shari ah perspective, the objective is to achieve benefits (maslahah) and to prevent harms (mafsadah) in wealth spending and management and financial planning The Negative attitudes needs to be eliminated such as excessiveness (israf), wastefullness (tabzir) and stinginess (bukhl) in wealth spending and management and financial planning. Some Positive Attitudes in wealth spending and management and financial planning such as: Spending in wise and moderate way (tawassut / wasatiyyah) Spending in the way of Allah (fi sabilillah) Priority to the self and family Spending in accordance with the hierarchy of needs, daruriyyat, Hajiyyat and Tahsiniyyat.
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