Investing is a popular way to develop assets. For millennials, the use of technology makes it a lot easier to access investment instruments, making investing their money as easy as using their cellphones. Sharia investments is one of the investment instruments that has gained a lot of attention from Muslim youth. They are interested in growing their assets using the principles of the sharia. 

However, before diving in and investing your money, there are a few things that you must understand: the risk, how it works, the goal of each investment instrument, and how each of these instruments works. 

There are many kinds of investment instruments that you can choose. However, if you choose to be sharia-compliant, first understand the contracts that take place in each of the investment instruments. Read this article to learn more about the contracts that take place in sharia investments. 

Do these before you begin investing your money

To beginners, including millennials, investing your money might make you worried. Maybe you are afraid that you may lose your money. However, in sharia investments, the risk of these investments is minimized because the sharia prohibits speculation, uncertainty, and gambling. This becomes a major difference between the sharia investments from its conventional counterparts. 

In general, there are three kinds of contracts that are commonly used in sharia investments: joint venture (musharakah), profit and loss sharing (mudarabah), and the appointment of agents with fees (al-wakalah bil ujrah). Before you begin investing, do these to make sure you are well-prepared!

Set your goals

The first step to begin investing is to set your goals. What do you aim to reach by investing? Determine if you want to set long term or short term goals. Each goal needs to be reached using a different investment instrument. These instruments include deposits, gold, and P2P funding. Determine the instrument of your choice and make sure that it’s sharia-compliant. 

Understand your current situations

Understand your current situations. Do you have your own personal targets? This is very important to make sure the decisions you make really suit your needs. Also, don’t hesitate to begin now. Don’t wait until you get well-off because the parameter to that might be relative. 

Choose the right instrument based on your risk profile 

Find out your risk profile, whether you are the aggressive, conservative, or moderate type. If you want low-risk investments, why don’t you try sharia fixed income mutual funds, gold, termed deposits, government bonds and retail obligations?  

If you like high-risk investments and challenges, sharia stocks offer you high profits, commensurate with its high risk. 

Don’t stop learning

Once we decide to invest, knowledge is the key. With the dynamics in the field of financial investment, we need to learn endlessly. Keep yourself updated with your portfolio. In addition, it is important to enrich your references from many sources. With enough knowledge, you will be able to manage your investment and minimize the risk. 

Start now

Think, but don’t overthink. In the end, the most important thing is to take your first step. Once you have enough understanding about investments and enough capital to invest, execute your plan immediately. If you keep putting it off, you’ll never start, reap your profits, and achieve your financial goals. 

One of the investment instruments that are relatively safe is P2P funding offered by ALAMI. By chipping in to the funding projects, you can not only grow your asset but also make impacts by supporting Indonesian MSMEs. As a sharia-based P2P funding platform, ALAMI offers competitive earning in a 90-day tenor.