Bilal Dannoun – The Story Behind Barakah Capital
AI: Summary ©
AI: Transcript ©
Today, we have the founder and CEO of
Barkha Capital, Sheikh Bilal Danoon, with us. And
Inshallah,
today, we're gonna be talking about
Barkha Capital, which is the initiative that you
started,
and
the getting really behind the scenes look at
what you guys have going on, and the
really the impact that you're already making in
the Muslim community. Masha'Allah.
Sheikh,
how are you?
I'm doing well and I'm very excited
to be sharing
the vision, the mission, and the values of
Baraka Capital.
So, Sheikh,
I guess let's start right at the beginning
for you and your own personal
investment journey. Can you tell us a little
bit more about that
and and how what really brought you to
kind of begin this initiative for everyone in
the Muslim community? Sure. So on a personal
level, I always wanted to have a passive
income. So I'm looking out for the future
and having more of a lifestyle that allows
me to spend more time
with, you know, my family,
with worship, with dawah,
going to umra regularly,
going away. So SubhanAllah, you know, I didn't
want to continue to be trading,
you know, my time for money, right? So
I had to look for ways and then
SubhanAllah,
there was
somebody that I knew that was in investments
and so he said to me look why
don't you invest with us? And so I
did and SubhanAllah
we did but then we actually lost some
money because there was mismanagement
of funds,
there was,
a lack of transparency,
and, and SubhanAllah then,
I thought to myself wow, there's a lot
of people that are investing out there but
they're investing
in a non Sharia,
you know, way,
a non Islamic way that's not halal.
So we don't want to go down that
path. We want to find surely there is
Sharia
compliant
ways to do it and to do it
in a way that's going to bring about,
you know, good returns.
And so then,
sometimes it's the nearest people near you that
you don't even know that they're doing it
and they're doing it well. So I reached
out to somebody that I had an inkling,
that he's actually
doing
this and we got talking
and SubhanAllah he said, Yeah, I'm doing it
like this. And so,
he introduced me to,
you know,
to investing and how to do it, and
so then we adopted,
you know, his
model, and so then I started looking out
in the community
for others who were doing it well, and
before you before you knew it SubhanAllah,
you know,
when you start, when you when you start
looking for these for these things, you'll start
to see them everywhere and you just didn't
realize they were all around you. And SubhanAllah,
we started then learning more and more about
the different models that are out there,
that, that are Sharia compliant,
that are safe,
that are low risk,
and I started to invest my money and
I started to see the returns
and and I kept on doing it for
different,
industries
or different models SubhanAllah
and Alhamdulillah
it has liberated
a lot of my time and
the investing has been safe, but it took
some time, it took due diligence, it took,
you know, learning from the mistakes I made
earlier by just trusting,
by just trusting,
you know, people who just who who looked
like they were actually honest,
and spoke in an honest way, but really
they were,
not honest. They were dishonest.
So that's how the journey began, and then
I decided
to,
you know, to bring,
this initiative to the community
and, you know, our prophet sallallahu alaihi wasallam,
he said that none of you are true
believers until you love for others what you
love for yourself.
So then I thought about, hold on, what
if I bring this to the community,
and the community can also benefit from it,
especially that I've seen,
okay, a lot of failed
schemes,
right, And I saw a lot of people
go through,
what I've been through, and I've seen a
lot of people lose a lot more money
than than what I've lost. So SubhanAllah,
I wanted this to be a platform
for the community to learn
how to invest
and to invest in a way that gives
them, you know, peace of mind,
that gives them confidence
to invest
their hard earned money.
That's how
this came about,
SubhanAllah.
And Alhamdulillah,
it's been a it's been a, you know,
a really eye opening experience.
And and Alhamdulillah, it's good to know that
we now have a platform
that offers,
you know,
opportunity to the Muslim community
to do it well.
So, Sheikh, you mentioned that you you went
through, you know, a lot of different models,
for shari'at compliant investing.
Can you give us maybe some examples what
those models were and
what the Sharia compliant models were and how
they kind of work? So the 3 areas
that I really love to invest in personally
and so do my friends and many community
members
that I've spoken to,
number 1 is investing in an actual business.
Now when you're investing in a business,
there's going to be
returns or profits
from that business, and the profit
is shared amongst
the investors.
Okay? Because there's regular income coming in.
Number 2 is actually
investing
in products that are being manufactured.
Right? And those products
are being ordered regularly,
okay, by retailers.
And then the retailer pays the invoice and
then that profit,
okay, is then distributed to the investors.
Number 3 is real estate.
And with real estate,
you have,
what's known as joint venture. Okay? So here,
there's a legal entity known as a unit
trust,
and this unit trust has units. So you're
essentially buying
units
in or shares in this particular unit trust.
And then over time, your shares increase in
value and then you have the option
to, sell your shares or when the project
is actually sold, then subhanAllah,
the investors,
they will also receive,
okay, their their share based on, you know,
the profit sharing Insha'Allah.
So these are three areas
that are
quite safe
if, of course, there is transparency
and, of course, there is very low risk
and due diligence has been, done,
and they are Sharia compliant,
and they are ethical,
right, and there is good management,
you know, the finger being on the pulse,
okay, that's very, very important insha'allah.
And that's something that I personally would recommend,
to my brothers and my sisters.
So you spoke about
Sharia compliancy and and Sharia compliant models.
You know, for for those of us who
don't really understand
that term or what it actually means, what
what actually is Sharia compliant?
Sharia compliant
is fundamentally
three areas.
Number 1
is that there is no riba, no interest
component
in the transaction or in the investment.
Okay? That's the first and that's the most
important one
because
when it comes to riba or when it
comes to interest bearing,
transactions whether you're giving interest or receiving interest,
this is one of the major sins in
Islam.
And Muslims really need to be aware of
that, that it's a major sin, not minor,
major.
And interestingly,
what we find in Islamic literature,
there are only
two times
that we read about Allah going to war
with someone
because of an action. And one of those
two times
is the person who is engaging
in riba transactions.
Whether he's
receiving it, whether he's paying it, whether he
is witnessing it. Right? This is very, very
serious in Islam.
Okay? So this is the first area that
we have to be careful and be aware
of when it comes to Sharia compliant.
Right? You can't be making
money from money. It needs to be an
asset, a product.
Right?
Number 2, it needs to be ethical.
It needs to be halal. So you can't
be investing
in an initiative or a project or a
company
that is, for example,
dealing with pork
products
or dealing with,
gambling
or dealing with alcohol
or drugs and intoxicants.
Anything, anything that is haram, you're not allowed
to earn any
revenue
from something which is clearly haram in the
Sharia.
Right? Allah says in the Quran,
is support, help,
assist
when it comes to goodness
and when it comes to that which is
pious. But do not
and do not
support which means
sin,
animosity.
Alright? Anything that's going to lead to that.
So we have to ensure
that
whatever we're investing in is ethical,
is is wholesome. You know? So even at
Barkha Capital, we feature projects that must not
only be halal, but also very pure. We
have had opportunities come to us, and
we felt
and we know that this is
a beverage, it was,
that is not healthy for people filled with
lots and lots of sugar.
Right? I don't want to be investing in
something that's going to be,
you know, hurting the people in any way.
That's not good for their health. That's very
important as well.
Okay?
Thirdly,
okay, there needs to be,
there needs to be
low risk.
Low risk
investing
and,
very low uncertainty.
So the Islamic term there is harar. There
must be no harar.
There must be no ambiguity,
high risk,
right, uncertainty,
lack of transparency.
When you don't have that,
that's and that's an Islamic. That's not allowed.
So we need to remember
these 3
main
contributors
to Sharia compliancy
that there is
no interest, no riba
at all, anywhere in that transaction.
Right?
And
that there is ethicalness,
okay, and purity
And that thirdly,
there is no ambiguity,
low risk or uncertainty. Let's remember that inshallah.
Could you give us some examples of
interest based or or reba based transactions or
dealings that some of the Muslim
community
could be involved in without really knowing?
That's a very good question,
in terms of breaking down what does constitute
riba. So what constitutes riba? Number 1 is
interest on loans.
So if you, are borrowing money and you're
expected to pay back more than the principal
amount, the amount that you borrowed,
that extra is classified as Riba. That's haram.
Right? So you can't be asking for extra
and you can't give back extra.
K. The only time you can give back
extra is, let's say, for example,
I borrowed a $100 from you,
and you're not expecting except a $100. So
I come back and give you the 100,
and I say to you, here's $50
as a gift from me. That's okay.
But you did not ask for it.
Number 2, we have interest bearing savings account.
Because the people put their money, they park
their money in a bank account,
and then they're getting interest on it along
the way. That money needs to be taken
out and needs to be given to certain
organizations
who will know what to do with it.
So if you, for example, approach
a charity organizations,
they know what to do with interest bearing
savings account. If you can speak to the
bank about removing that part, that that is
even better.
Number 3,
we have mortgages,
the conventional mortgages,
you know, where people,
are purchasing
a home or a car. Again, so they
borrow,
the money from the bank,
conventional banks. Right? And they're paying again more
than the principal
amount.
Okay? Now that is something that's very common
in the west, and we have to be
very very careful about that because that is
riba and there's going to be no barakah,
okay, in your wealth,
potentially in your home. And what I have
seen, okay, from my marriage counseling
is people who are engaged in these riba
bearing transactions,
right, who have no barakah in their relationship
and they're fighting and there's so much problems
and SubhanAllah,
as soon as they remove
the riba from their life,
their relationship
becomes better than before.
So sometimes you're being punished
whether it's your health, whether it's your wealth,
whether it's your relationships
because of,
okay, because of that mortgage
that you have engaged in.
Likewise,
what you can do,
Insha'Allah,
the Islamic alternative
is something
known as Murabaha.
So murabaha
is, you know, is basically whereby,
for example, you will have, let's say an
Islamic bank, okay, purchase a house for you.
So let's say the house is,
you know,
$500,000.
So they will now purchase the house
and they will sell it back to you,
but they'll sell it back to you for
700,000.
They wanna make a profit,
but now they're buying it and they they
are the ones who are selling it, but
they're selling it at a higher price. We
do it all the time. We buy something,
we put a markup.
That's not riba,
that's Morabaha,
or they do so with a car. So
you can actually not only go to a
bank, but you can go to somebody that
has money and say to them, look, I'm
looking for a car. I'm interested,
in a car, and,
in I'm interested in a particular type of
car. So now that person purchases the car
and they put a markup on top and
they sell it to you, and you can
even pay it in installments.
That's fine.
That's not riba. So there are ways to
do it in a halal way.
Right? Sometimes,
you know, you're basically
charging that extra because of the timeline that
and the and and the the repayments coming
in over a longer period of time as
opposed to being immediate.
Another form of riba is credit cards.
So you might have,
a credit card and, you know, you either,
you know, you're paying again, you're paying riba,
you're paying interest
because you haven't paid,
you know, your repayments on time. Another one
would be fixed deposits.
So you have a fixed deposit
into an account
and it's earning you,
riba or earning you interest. So the alternative
to that would be to invest,
okay, in a your money in a business,
in a in a product,
in real estate that we said before,
that will earn you a return on investment,
an ROI,
right, instead of earning you riba. So there
are alternatives.
Wherever there is
haram,
we find that there is an alternative
halal and consequently,
you're going to experience
more enlightenment,
more barakah,
okay, in your wealth, in your health, in
your relationships,
and we're going to have a thriving community
because it's built upon the pleasure of Allah
Subhanahu Wa Ta'ala.
So Sheikh,
what would be
some final
words or final pieces of advice that you
can give to the audience
who, you know, some of them they're new,
they're looking to invest, they've never invested before,
it's kind of a new thing for them,
they're kind of scared,
and some of them they've been, they're very
well experienced
and they've done a lot of investments but
they don't
know what makes Market Capital different.
What would be your final words? Well, first
of all make sure that
your income is from Halal,
right? That's the first thing, do you want
Baraka in that income?
Secondly,
when you come to invest do your due
diligence,
do your research,
you know, read the fact sheets,
read the agreement,
right? And then of course,
maybe also check-in
with other investors.
Also you can,
do your Istikhara prayer as we said, right?
Make sure that there's a legal framework,
okay? Make sure that
that whatever you're investing in, whoever you're talking
to,
that they're not using any pressure tactics.
Right. So be careful of that. Look out
for the red flags.
Don't ignore the red flags. Question what is
potentially
a red flag,
right? So
these are just basics that if you implement
them Insha'Allah
they can be very very impactful
in terms of your result
and, you know, not
being part of any scheme
that's going to fail.
So always,
you know, do the work Insha'Allah
that needs to be done. Don't go in
blindly just because your friend went in or
you know, your friend seems to be,
you know, doing so well
and you just
copycat and you just basically just jump in
without
any sort of understanding of what you're getting
yourself into.
You know, ask the questions.
You know, what is the minimum amount?
What is the,
minimum period?
What,
what is the sort of return on investment
that I can expect. Now, of course, from
a sharia perspective,
there is nothing definitive.
As soon as somebody says it's defined as
this is the percentage,
that's haram, that's
not part of an islamic transaction.
Because we don't know the unseen.
So insha'Allah if you do it well and
you put your trust in Allah Azza wa
Jal
and you understand that with every
investment no matter what investment it is there
will always be an element of risk.
But if you've done your due diligence
then inshallah you don't need to be
stressed out about the
risk. And then, you know,
not taking a risk at all
is in and of itself a risk.
That's life. We need to take calculated risks
inshallah
and when we do
that the outcome will be good. May Allah
bless the wealth of the community
and may Allah
guide us always to do what Sharia compliant
and what is ethical,
and what is best for our worldly life,
and now hereafter.
So, Sheikh, thank you so much for your
time, and for your wonderful wisdom and insights
when it comes to investments and when it
comes to what you're doing with Baraka Capital,
alhamdulillah.
I'm very excited to see what you guys
achieved inshallah in the coming years, the coming
decades,
inshallah.
Sheikh, where can people find you? People wanna
learn more about you, what can they find
you?
For the discussion.
I think it was very informative Insha'Allah and
may it be of benefit to the community.
Anyone looking out to,
Insha'Allah
reach me or learn more about what we're
doing at Barakah Capital,
then please visit the website barakacapital.org.