Ways to invest my saved money in Germany in a halal way?
"The UK has Islamic banks. I don't know whether Germany has the same or not (with a quick search I can find articles stating intentions to establish one, but not the results). Even if there's none in Germany, I assume that with some difficulty you could use banks elsewhere in the EU and even non-Euro-denominated. I can't recommend a specific provider or product (never used them and probably wouldn't offer recommendations on this site anyway), but they advertise savings accounts. I've found one using a web search that offers an ""expected profit rate"" of 1.9% for a 12 month fix, which is roughly comparable with ""typical"" cash savings products in pounds sterling. Typical to me I mean, not to you ;-) Naturally you'd want to look into the risk as well. Their definition of Halal might not precisely match yours, but I'm sure you can satisfy yourself by looking into the details. I've noticed for example a statement that the bank doesn't invest your money in tobacco or alcohol, which you don't give as a requirement but I'm going to guess wouldn't object to!" You can invest in a couple of Sharia-conform ETFs which are available in Germany and issued by Deutsche Bank (and other financial institutions).  For instance, have a look at these ETFs: DB Sharia ETFs In addition, Kuveyt Turk Bank aims to become Germany's first Islamic bank offering Sharia conform investments (Reuters). "What is actually a halal investment? Your definition of halal investment is loose and subject to interpretation. On one hand, nothing is fixed in the financial world. You might get a 10 Year Germany Bund with a fixed coupon rate of 1%, but the real rate of return of this investment is far from fixed. It depends on the market environment, the inflation, etc. (Also, you can trade this investment on the secondary market at any time.) Moreover, the country can default. For example, nothing is ""fixed"" if you hold the Argentina bonds. You might think a saving account in the bank is a fixed investment. But again, what about the inflation? And if you talk with the account holders in Cyprus, you will understand there is no such thing that you are ""guaranteed to profit a fixed amount each month or year"". So, from this point of view, everything is ""halal"", because nothing is fixed and the risk of losing the principle is alway there.  On the other hand, if you assume that investing a government bond and having a saving account is not halal by definition, you will end up with a situation that every investment is not halal. Suppose you invest in a company. What does the company do with your money? Sure, they will use some of your money to buy equipments, hire new people, and so on. But they will always save some money as cash reserves to meet the short-term and emergency funding needs. Those cash reserves are usually in the form of highly liquid investment, such as short-term bonds, money market funds, savings in a bank account, etc. Because those investments are not halal per definition, is your investment in the company still halal? So in the end, you might just do whatever you want depending on your interpretation." What is not permitted in Islam is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Originally, usury meant interest of any kind. A loan may be considered usurious because of excessive or abusive interest rates or other factors. But In case of financial markets, people borrow money to make money and both parties benefits, and no one is taking advantage of the other. I may be wrong in interpreting this way, God knows the best.
You are not limited in these 3 choices. You can also invest in ETFs, which are similar to mutual funds, but traded like stocks. Usually (at least in Canada), MERs for ETFs are smaller than for mutual funds. Bank accounts?  It is worse than that.  People are afraid to invest in bank accounts. Did you see the bit when German government bonds hit a negative interest rate recently? (As in you buy a bond and in five years time the government promises to give nearly all of it back) One possibility would be to invest in a crude oil ETF (or maybe technically they're an ETP), which should be easily accessible through any stock trading platform.  In theory, the value of these investments is directly tied to the oil price.  There's a list of such ETFs and some comments here.  But see also here about some of the problems with such things in practice, and some other products aiming to avoid those issues.  Personally I find the idea of putting all my savings into such a vehicle absolutely horrifying; I wouldn't contemplate having more than a small percentage of a much more well diversified portfolio invested in something like that myself, and IMHO it's a completely unsuitable investment for a novice investor.  I strongly suggest you read up on topics like portfolio construction and asset allocation (nice introductory article here and here, although maybe UK oriented; US SEC has some dry info here) before proceeding further and putting your savings at risk. "This is my two cents (pun intended).  It was too long for a comment, so I tried to make it more of an answer.  I am no expert with investments or Islam: Anything on a server exists 'physically'.  It exists on a hard drive, tape drive, and/or a combination thereof.  It is stored as data, which on a hard drive are small particles that are electrically charged, where each bit is represented by that electric charge.  That data exists physically.  It also depends on your definition of physically.  This data is stored on a hard drive, which I deem physical, though is transferred via electric pulses often via fiber cable.  Don't fall for marketing words like cloud.  Data must be stored somewhere, and is often redundant and backed up. To me, money is just paper with an amount attached to it.  It tells me nothing about its value in a market.  A $1 bill was worth a lot more 3 decades ago (you could buy more goods because it had a higher value) than it is today.  Money is simply an indication of the value of a good you traded at the time you traded.  At a simplistic level, you could accomplish the same thing with a friend, saying ""If you buy lunch today, I'll buy lunch next time"".  There was no exchange in money between me and you, but there was an exchange in the value of the lunch, if that makes sense.  The same thing could have been accomplished by me and you exchanging half the lunch costs in physical money (or credit/debit card or check). Any type of investment can be considered gambling.  Though you do get some sort of proof that the investment exists somewhere  Investments may go up or down in value at any given time.  Perhaps with enough research you can make educated investments, but that just makes it a smaller gamble.  Nothing is guaranteed.  Currency investment is akin to stock market investment, in that it may go up or down in value, in comparison to other currencies; though it doesn't make you an owner of the money's issuer, generally, it's similar.  I find if you keep all your money in U.S. dollars without considering other nations, that's a sort of ignorant way of gambling, you're betting your money will lose value less slowly than if you had it elsewhere or in multiple places. Back on track to your question: [A]m I really buying that currency?  You are trading a currency.  You are giving one currency and exchanging it for another.  I guess you could consider that buying, since you can consider trading currency for a piece of software as buying something. Or is the situation more like playing with the live rates? It depends on your perception of playing with the live rates.  Investments to me are long-term commitments with reputable research attached to it that I intend to keep, through highs and lows, unless something triggers me to change my investment elsewhere.  If by playing you mean risk, as described above, you will have a level of risk.  If by playing you mean not taking it seriously, then do thorough research before investing and don't be trading every few seconds for minor returns, trying to make major returns out of minor returns (my opinion), or doing anything based on a whim. Was that money created out of thin air? I suggest you do more research before starting to trade currency into how markets and trading works.  Simplistically, think of a market as a closed system with other markets, such as UK market, French market, etc.  Each can interact with each other.  The U.S. [or any market] has a set number of dollars in the pool.  $100 for example's sake.  Each $1 has a certain value associated with it.  If for some reason, the country decides to create more paper that is green, says $1, and stamps presidents on them (money), and adds 15 $1 to the pool (making it $115), each one of these dollars' value goes down.  This can also happen with goods.  This, along with the trading of goods between markets, peoples' attachment of value to goods of the market, and peoples' perception of the market, is what fluctates currency trading, in simple terms.  So essentially, no, money is not made out of thin air.  Money is a medium for value  though values are always changing and money is a static amount. You are attempting to trade values and own the medium that has the most value, if that makes sense.  Values of goods are constantly changing. This is a learning process for me as well so I hope this helps answers your questions you seem to have.  As stated above, I'm no expert; I'm actually quite new to this, so I probably missed a few things here and there." There are lot of options. I personally avoid keeping money in bank accounts and invest in one of the funds. It's just my personal opinion, you can ask your Ulamas A guy I used to work with would buy some shares in certain companies on a regular basis.  The guy in question chose Coke, Pepsi, GE, Disney and some other old stable stocks.  He just kept buying a few shared ($50 or so at a time) year after year after year.  He worked his entire life, but by the time he was ready to retire, he had a pretty sizable investment; he was worth a rather tidy sum. The moral of the story is, it is very much worth it to invest a bit at a time.  Don't bother with the idea of buying low and selling high; not right now.  Just go ahead and buy stable stocks (or shares of index funds) and wait them out.  This strategy (mixed with other retirement tactics like a 401K from work, and IRA of your own, Social Security in the US) is a good way to build wealth. Don't spend money you don't have, be ready for a long term investment and I think it makes great sense, regardless of what country you live in. This. Why not convert the 50k euro to dollars and AUD, and invest in a basket of companies that trade on American/Australian exchanges instead. You could hold a bit of gold, but I would definitely not put everything into gold. To start with, you are right, there shouldn't be any additional fees other than the currency exchange fee - I'm not sure of the exact fee for Natwest, but for Halifax this was around 2.5% for big currencies like the Euro. However, Germany doesn't actually use debit cards nearly as much as we do here in the UK, so you will almost certainly need cash. Rather than taking this from a currency exchange booth, what you should do in order to get the lowest fees is head straight to the ATM of any bank, and put your card in to make a cash withdrawal. It will almost certainly ask if you want to use their exchange rate, which it will show you, and you will almost certainly be better turning this down and allowing Natwest to do this for you. Dependent on the bank their currency exchange spread may be as high as 4.5%. I hope this helps, it certainly saved me a lot of money when I have been going abroad. Here's an unconventional approach: If you really need the money you can always call the bank or go to one of their branches and get new login credentials after some kind of formal process like proving that you are in fact the account holder. Since it will be a hassle to get the credentials you will not do it if it's not necessary. In germany the banks all use transaction authentication numbers (TAN) that you need to authorize a transfer. If there is such a thing in UK you can just throw the TAN list away. This way you can still check your savings balance but you cannot transfer the money without requesting a new TAN list which takes time and effort. "With permanent contract in Germany you shouldn't have any problem getting a loan. It's even more important than how much do you earn. Generally, you should ask for a house mortgage (Baufinanzierungsdarlehen) with annuity as a type of credit to save on interest. Besides, you usually get a better conditions with a saving bank (Sparkasse) or a popular bank (Volksbank) situated in the area where your house is situated. You also shouldn't combine your credit with extra products (the simpler is the product, the better is for you), maybe I'll write later an extra piece on the common pitfalls in this regard. Probably, you could find a bank that would give you such a loan, but it would be very expensive. You should save at least 40%, because then the bank can refinance your loan cheaply and in return offer you a low interest. Taxes depend heavily on the place where you buy a house. When you buy it, you pay a tax between 3.5% and 6% (look up here). Then you pay a property tax (Grundsteuer), it depends on community how much do you pay, the leverage is called Hebesatz (here's example). Notary would cost ca. 1.5% of the house price. All and all, you should calculate with 10% A country-independent advice: if you want to save on interest in the long run, you should take an annuity loan with the shortest maturity. Pay attention to effective interest rate. Now to Germany specifics. Don't forget to ask about ""Sondertilgung"" (extra amortization) - an option to amortize additionaly. Usually, banks offer 5% Sondertilgung p.a. The interest-rate is usually fixed for 8 years (however, ask about it), this period is called Zinsbindung. It sound ridiculous, but in southern lands (Bayern, Baden-Württemberg) you usually get better conditions as in Berlin or Bremen. The gap could be as big as 0.5% p.a. of effective interest rate! In Germany they often use so-called ""anfängliche Tilgung"" (initial rate of amortizazion) as a parameter." Compound interest is your friend. For such a low amount of cash, just pop it into savings accounts or deposits. When you reach about 1.500€ buy one very defensive stock that pays high dividends. With deposits, you don't risk anything, with one stock, you can lose 100% of the investment. That's why it's important to buy defensive stock (food, pharma, ...). Every time you hit 1.500€ after, buy another stock until you have about 10 different stock in different sectors, in different countries. Then buy more stock of the ones you have in portfolio. You're own strategy is pretty good also. We don't have a good answer for how to start investing in poland.  We do have good answers for the more general case, which should also work in Poland.  E.g. Best way to start investing, for a young person just starting their career? This answer provides a checklist of things to do.  Let's see how you're doing:   Match on work pension plan. You don't mention this.  May not apply in Poland, but ask around in case it does.  Given your income, you should be doing this if it's available.   Emergency savings. You have plenty.  Either six months of spending or six months of income.  Make sure that you maintain this.  Don't let us talk you into putting all your money in better long term investments.   High interest debt. You don't have any.  Keep up the good work.   Avoid PMI on mortgage. As I understand it, you don't have a mortgage.  If you did, you should probably pay it off.  Not sure if PMI is an issue in Poland.   Roth IRA. Not sure if this is an issue in Poland.  A personal retirement account in the US.   Additional 401k. A reminder to max out whatever your work pension plan allows.  The name here is specific to the United States.  You should be doing this in whatever form is available.   After that, I disagree with the options.  I also disagree with the order a bit, but the basic idea is sound:  one time opportunities; emergency savings; eliminate debt; maximize retirement savings.  Check with a tax accountant so as not to make easily avoidable tax mistakes.   You can use some of the additional money for things like real estate or a business.  Try to keep under 20% for each.  But if you don't want to worry about that kind of stuff, it's not that important.  There's a certain amount of effort to maintain either of those options.  If you don't want to put in the effort to do that, it makes sense not to do this.   If you have additional money split the bulk of it between stock and bond index funds.  You want to maintain a mix between about 70/30 and 75/25 stocks to bonds.  The index funds should be based on broad indexes.  They probably should be European wide for the most part, although for stocks you might put 10% or so in a Polish fund and another 15% in a true international fund.   Think over your retirement plans.  Where do you want to live?  In your current apartment?  In a different apartment in the same city?  In one of the places where you inherited property?  Somewhere else entirely?  Also, do you like to vacation in that same place?   Consider buying a place in the appropriate location now (or keeping the one you have if it's one of the inherited properties).  You can always rent it out until then.  Many realtors are willing to handle the details for you.   If the place that you want to retire also works for vacations, consider short term rentals of a place that you buy.  Then you can reserve your vacation times while having rentals pay for maintenance the rest of the year.   As to the stuff that you have now:   Look that over and see if you want any of it.  You also might check if there are any other family members that might be interested.  E.g. cousins, aunts, uncles, etc.  If not, you can probably sell it to a professional company that handles estate sales.  Make sure that they clear out any junk along with the valuable stuff.   Consider keeping furniture for now.  Sometimes it can help sell a property.   You might check if you want to drive either of them.  If not, the same applies, check family first.  Otherwise, someone will buy them, perhaps on consignment (they sell for a commission rather than buying and reselling).   There's no hurry to sell these.  Think over whether you might want them.   Consider if they hold any sentimental value to you or someone else.  If not, sell them.  If there's any difficulty finding a buyer, consider renting them out.  You can also rent them out if you want time to make a decision.  Don't leave them empty too long.  There's maintenance that may need done, e.g. heat to keep water from freezing in the pipes.   That's easy, just invest that.   I wouldn't get in too much of a hurry to donate to charity.  You can always do that later.  And try to donate anonymously if you can.  Donating often leads to spam, where they try to get you to donate more. "On contrary of what Mike Scott suggested, I think in case of EURO DOOM it's a lot safer if your savings were changed into another currency in advance. Beware that bringing your money into an EURO CORE country (like Finland, Austria, Germany, Nethereland) it's useful if you think those banks are safer, but totally useless to avoid the conversion of your saving from Euro into your national currency. In case of EURO CRASH, only the Central Bank will decide what happens to ALL the Euro deposited wherever, single banks, even if they are Deutsche Bank or BNP or ING, can not decide what to do on their own. ECB (European Central Bank) might decide to convert EURO into local currencies based on the account's owner nationality. Therefor if you are Greek and you moved your saving in a German bank, the ECB might decide that your Euro are converted into New Dracma even if they sit in a German bank account. The funniest thing is that if you ask to a Finland bank: ""In case of Euro crash, would you convert my Euro into New Dracma?"", they sure would answer ""No, we can't!"", which is true, they can not because it's only the ECB (Europe Central Bank) the one that decides how an ordered Euro crash has to be manged, and the ECB might decide as I explained you above. Other Central Banks (Swiss, FED, etc.) would only follow the decisions of the ECB. Moreover in case of EURO DOOM, it's highly probable that the Euro currency looses a tremendous value compared to other currencies, the loss would be huge in case the Euro Crash happens in a disordered way (i.e. a strong country like Germany and their banks decides to get out and they start printing their own money w/o listening to the ECB anymore). So even if your saving are in Euro in Germany they would loose so much value (compared to other currencies) that you will regreat forever not to have converted them into another currency when you had the time to do it. Couple of advises: 1) If you want to change you savings into another currency you don't need to bring them into another bank/country (like US), you could simply buy US Shares/Bonds at your local bank. Shares/Bonds of a US company/US gov will always be worth their value in dollars no matter in what new pathetic currency your account will be converted. 2) But is there a drawback in converting my saving into another currency (i.e. buying dollars in the form of US treasury bonds)? Unfortunately yes, the drawback is that in case this Euro drama comes finally to an happy ending and Germans decide to open their wallets for the nth time to save the currency, the Euro might suddenly increase its value compared to other currencies, therefor if you changed your saving into another currency you might loose money (i.e. US dollars looses value against the Euro)." "Buying physical gold: bad idea; you take on liquidity risk.  Putting all your money in a German bank account: bad idea; you still do not escape Euro risk.  Putting all your money in USD: bad idea; we have terrible, terrible fiscal problems here at home and they're invisible right now because we're in an election year.  The only artificially ""cheap"" thing that is well-managed in your part of the world is the Swiss Franc (CHF).  They push it down artificially, but no government has the power to fight a market forever.  They'll eventually run out of options and have to let the CHF rise in value." "You are in your mid 30's and have 250,000 to put aside for investments- that is a fantastic position to be in. First, let's evaluate all the options you listed. Option 1 I could buy two studio apartments in the center of a European capital city and rent out one apartment on short-term rental and live in the other. Occasionally I could Airbnb the apartment I live in to allow me to travel more (one of my life goals). To say ""European capital city"" is such a massive generalization, I would disregard this point based on that alone. Athens is a European capital city and so is Berlin but they have very different economies at this point. Let's put that aside for now. You have to beware of the following costs when using property as an investment (this list is non-exhaustive): The positive: you have someone paying the mortgage or allowing you to recoup what you paid for the apartment. But can you guarantee an ROI of 10-15% ? Far from it. If investing in real estate yielded guaranteed results, everyone would do it. This is where we go back to my initial point about ""European capital city"" being a massive generalization. Option 2 Take a loan at very low interest rate (probably 2-2.5% fixed for 15 years) and buy something a little nicer and bigger. This would be incase I decide to have a family in say, 5 years time. I would need to service the loan at up to EUR 800 / USD 1100 per month. If your life plan is taking you down the path of having a family and needed the larger space for your family, then you need the space to live in and you shouldn't be looking at it as an investment that will give you at least 10% returns. Buying property you intend to live in is as much a life choice as it is an investment. You will treat the property much different from the way something you rent out gets treated. It means you'll be in a better position when you decide to sell but don't go in to this because you think a return is guaranteed. Do it if you think it is what you need to achieve your life goals. Option 3 Buy bonds and shares. But I haven't the faintest idea about how to do that and/or manage a portfolio. If I was to go down that route how do I proceed with some confidence I won't lose all the money? Let's say you are 35 years old. The general rule is that 100 minus your age is what you should put in to equities and the rest in something more conservative. Consider this: This strategy is long term and the finer details are beyond the scope of an answer like this. You have quite some money to invest so you would get preferential treatment at many financial institutions. I want to address your point of having a goal of 10-15% return. Since you mentioned Europe, take a look at this chart for FTSE 100 (one of the more prominent indexes in Europe).  You can do the math- the return is no where close to your goals. My objective in mentioning this: your goals might warrant going to much riskier markets (emerging markets). Again, it is beyond the scope of this answer."