Islamic Wealth Management
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Islamic Wealth Management

Theory and Practice

Edited by Mohamed Ariff and Shamsher Mohamad

From an Islamic perspective, although the ownership of wealth is with God, humans are gifted with wealth to manage it with the objective of benefiting the human society. Such guidance means that wealth management is a process involving the accumulation, generation, purification, preservation and distribution of wealth, all to be conducted carefully in permissible ways. This book is the first to lay out a coherent framework on how wealth management should be conducted in compliance with guiding principles from edicts of a major world religion.
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Chapter 21: Issues in waqf and zakat management

Mohamed Ariff and Shamsher Mohamad

Abstract

Zakat is charity payable each year on the excess wealth beyond that needed for one’s station in life. This is mandated as a duty of believers to give to charity a small portion ranging from as low as 2.5% on the excess to 7% (in the case of ornaments of precious items). It is given voluntarily by the faithful to whoever they wish to give and that includes the poor among the family. The sum is unknown and it is thought to be very large because these sums of money are supporting mosques, education, hospitals, and orphanages and support for the needy. Zakat is to be paid first before the balance of wealth could be invested to earn more wealth, which in turn will mandate further zakat payments in the ensuing year. This is pertinent to wealth management because the faithful is to have professional advice on how to compute this amount each year. We believe this is part of wealth management advisory services.

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