Allah informs us in numerous places in the Qur’an that human beings have an intense love for wealth.21
The insatiable thirst for wealth is exemplified in the hadith of the Prophet ﷺ: “If the son of Adam had a valley full of gold, he would like to have two valleys."22
The Prophet further cautioned about the potential dangers of obsessively pursuing wealth, saying, “By Allah, it is not poverty I fear for you; rather, I fear you will be given the wealth of the world, just as it was given to those before you. You will compete for it just as they competed for it and it will ruin you just as it ruined them."23
One of the most vivid illustrations of this warning comes from the following narration, where the Prophet ﷺ said, “Two hungry wolves roaming freely among a flock of sheep are less destructive to them than the passion of a man for wealth and fame is to his religion."24
attempt to nurture a vigilant mindset towards the pursuit of wealth, warning that such a pursuit may destroy a person. However, rather than merely warn the believers about the potential pitfalls of chasing money, Islamic guidance seeks to reframe our relationship with wealth so that we spend it appropriately in the service of Allah.
Reframing ownership of wealth
As previously stated, neoclassical economics and capitalism posit that the individual is the true owner of their wealth and possessions. However, in Islam, Allah is the true Owner of all wealth, and the individual is merely a trustee or executor whose role is to use the wealth and assets in a manner pleasing to Allah. The Qur’an says, “Believe in Allah and His Messenger and spend out of that of which He has made you trustees. For those who have believed among you and spent, there will be a great reward.”25
The Islamic notion that wealth ultimately belongs to Allah, and we are only trustees, has substantial ramifications for how wealth is spent and invested. Once the believer internalizes their role as a trustee, they become responsible for safeguarding the trust, understanding the terms of the trust to determine who has rights over the assets, and then distributing the assets to the deserving parties. The terms of the trust have been clearly articulated in the Qur’an and Sunnah, which include rules of inheritance, rules of zakah
, discouraging miserliness and hoarding of wealth, encouraging generosity and circulating wealth in society, encouraging moderation in spending, and principles of investing.
The paradox of pursuing wealth
Understanding the gravitational pull of wealth on the hearts of people, the Prophet ﷺ repeatedly gave advice on how to detach ourselves from stressing over wealth and from making the pursuit of it a central concern of our lives. In a powerful narration, he said, “Whoever is focused only on this world, Allah will confound his affairs and make him fear poverty constantly, and he will not get anything of this world except that which has been decreed for him. [However], whoever is focused on the Hereafter, Allah will settle his affairs for him and make him feel content with his portion, and his provision and worldly gains will undoubtedly come to him.”26
This hadith establishes an essential psychological principle of wealth in Islam: chasing the supposed reward of this life (dunyā)
leads to financial anxiety, whereas chasing the real reward of the afterlife (ākhirah
) leads to financial contentment. He reiterated this point in another narration, saying, “Allah says, ‘O son of Adam, focus on worshipping Me and I will fill your heart with contentment and take care of your poverty; but if you do not do that, then I will fill your heart with worldly concerns and will not take care of your poverty.’”27
These narrations are meant to calibrate the believer away from the inherent bias of obsessively pursuing wealth and free them to pursue more noble pursuits. In fact, the Prophet ﷺ repeated this message over and over in numerous ways. In another example, Abū Dharr reported that the Prophet said to him, “O Abū Dharr, do you say an abundance of possessions is wealth?” I said yes. The Prophet said, “Do you say a lack of possessions is poverty?” I said yes. The Prophet repeated this three times, then he said, “Wealth is in the heart and poverty is in the heart. Whoever is wealthy in his heart will not be harmed no matter what happens in the world. Whoever is impoverished in his heart will not be satisfied no matter how much he has in the world. Verily, he will only be harmed by the greed of his own soul.”28
The Prophet ﷺ focused on liberating hearts from lusting over wealth so that his ummah
became intrinsically motivated to spend and invest it in noble causes.
Reframing spending and investing
Islam aims to avoid extreme stinginess or excessive spending on oneself. In describing the righteous believers, Allah says in the Qur’an, “And [they are] those who, when they spend, do so not excessively or sparingly but are ever, between that, justly moderate.”29
The Prophet ﷺ also said, “Eat, drink, give in charity, and wear nice clothing, but without pride and extravagance. Verily, Allah loves for His blessings to be seen upon His servants.”30
These texts demonstrate that moderation in all forms of spending is optimal. However, as many of life’s expenditures pertain to one’s family, Islam reframes spending on family as a type of charity when done with the intention of pleasing Allah. The Prophet ﷺ said, “If a Muslim spends on his family seeking reward from Allah, it is charity for him.”31
In addition to understanding how to spend money moderately, Islamic psychoeconomic guidance reframes the meaning of investing.
Investing refers to a method of allocating wealth into assets that one expects to profit from. The objective of investing is to reap the rewards of one’s investments in the future. Ethical investing32
is encouraged in Islam, as the individual benefits by having their wealth grow and society benefits as the economy grows through successful investments. ʿUmar ibn Khaṭṭāb advised, “Invest the wealth of orphans so that it will not be eaten away by zakah
This statement establishes that money lying around will decrease due to the obligation of zakah
. If a person had $10,000, it would become $9,750 after paying 2.5% in zakah ($250) at the end of the year. After 10 years, the original $10,000 would be worth just under $8,000. Thus, paying zakah
should encourage investing, as money not being invested is effectively subject to a negative interest rate of -2.5% (this is only referring to interest from a purely financial perspective, not from an Islamic legal or spiritual perspective).
Although there is great reward and barakah
, the Prophet ﷺ nonetheless encouraged us to invest our wealth. Through putting our wealth in halal investments, we increase the likelihood of increasing our wealth and subsequently giving more. Although Islam encourages worldly investing in order to safeguard and grow wealth, it fundamentally reframes what types of investments are worth focusing on. The following aḥādīth
demonstrate how the Prophet reframed investing. He said, “…The son of Ādam boasts, ‘My wealth! My wealth!’ O son of Adam, have you truly earned any wealth but that you ate and consumed, or put on and wore out, or spent in charity so it remained?”34
In this narration, from a religious perspective, the only wealth that one retains is that which is invested in charity. In another narration, he said, “Who among you considers the wealth of his heirs dearer to him than his own wealth?” They replied, “O Allah’s Messenger! There is none among us but loves his own wealth more.” The Prophet said, “So his wealth is whatever he puts forth [in charity] during his life, whereas the wealth of his heirs is whatever he leaves after his death.”35
Again, the Prophet is reframing what constitutes true wealth by encouraging investing in charity as a way to build one’s spiritual net worth and nest egg for the afterlife. In yet another narration, it was reported that ʿĀʾishah had a sheep slaughtered. When the Prophet found out, he inquired about it. He said to her, “What remains of it?” She said, “Nothing remains of it except its shoulder.” He said, “All of it remains except its shoulder.”36
Thus, the Prophet explicitly reframed ʿĀʾishah’s worldview of wealth. Rather than interpret what has been given away as ceasing to be in one’s possession, what has been given away should be seen as an investment that one retains. All of these narrations reinforce the same principle in different contexts, highlighting the consistency of this Prophetic investing principle. Therefore, if we return to the definition of investing as a method of allocating wealth into assets that one expects to profit from in the future, there can be no greater investment in one’s future, in this life and the afterlife (ākhirah
), than philanthropy and charitable giving. Similarly, just as investing in our personal dunyā
portfolio is important and has best practices, investing in our personal ākhirah
portfolio also has best practices to be mindful of. Here are a few suggestions:
- Invest in your ākhirah portfolio as early as possible and consistently. Charity grows at an exponential rate.37 Investing in one’s ākhirah from a young age disciplines the soul, builds trust in Allah, and the returns in the afterlife will be greater than if one began investing in their ākhirah portfolio later in life. Additionally, regularly contributing ensures that one’s ākhirah investment steadily grows over time. Set aside a percentage of your income or a fixed amount for weekly or monthly investments.
- Take calculated risks and invest when others are hesitant. Just as risk tolerance is a consideration in worldly investments, it is recommended to invest in projects that have tremendous potential. The Qur’an alludes to this when praising those who donated to Islam during its most vulnerable times before the conquest of Makkah as being superior to those who donated after the Islamic state was powerful and solidified.38 The reward is greater in the early phases of a righteous project.
- Diversify your ākhirah portfolio. Building off the last recommendation, it is important to invest in a variety of causes. Although people have preferences for certain projects, they should still invest in a variety of righteous causes, including masājid, schools, poverty relief, education, social issues, and more. This ensures the person reaps a return on investment from each noble cause.
Figure 1. Hypothetical diversified ākhirah investment portfolio
Despite the tremendous reward in investing in one’s ākhirah, there may be psychological barriers to committing to a life of philanthropic investing. We discuss a few of these in light of the Qur’an, Sunnah, and modern science.
Spiritual biases related to wealth and giving
Scarcity and poverty can be debilitating to one’s perspective on wealth. Scarcity is not only a lack of resources but also a mindset.39
A scarcity mindset is the subjective perception that there is not enough for everyone, leads to anxiety about not having enough, and impairs decision-making.40
A scarcity mindset is the opposite of an abundance mindset, where one perceives that there is enough for themselves and others.
One of the consequences of having a scarcity mindset is feeling a sense of personal relative deprivation and diminished perceptions of financial well-being, which lead to making poor financial decisions, such as saving less, taking out high interest loans,41
and increased participation in lotteries.42,43
Personal relative deprivation refers to feelings of resentment and lack of financial contentment due to believing one is deprived of what they desire and deserve.44
Believing that one is deprived is related to lower levels of well-being,45
worse physical health,47
higher levels of materialism,48
and donating less.49
In addition to these aforementioned detrimental outcomes, personal relative deprivation is also linked to maladaptive attitudes and behaviors, including delayed discounting tendencies and engaging in risky behaviors.50
Delayed discounting refers to the preference for smaller, immediate rewards over larger, delayed rewards in the future. Thus, people who feel deprived compared to others are more likely to make irrationally risky decisions in the moment at the expense of better long-term decisions. For example, experiments have shown that inducing feelings of relative deprivation lead to delayed discounting tendencies, which lead to an increased likelihood of gambling.51
Thus, the person who feels deprived seeks an immediate reward that they irrationally believe can come about by gambling.
Personal relative deprivation is thus a spiritual bias that influences economic behavior, including how willing one is to give their wealth in charity, to gamble, and to take out interest-bearing loans. Believing that one is deprived is thus viewed negatively in Islam. Although the believer is not accountable for fleeting thoughts, deep resentment of one’s financial situation is a door through which Satan enters. Allah refers to Himself as Generous (al-Karīm) and Vast (al-Wāsiʿ) in His bounty in the Qur’an. It is through understanding these names that the spiritual bias is meant to be removed from the heart of the believer. The Qur’an addresses this bias directly in Surat al-Baqarah,
الشَّيْطَانُ يَعِدُكُمُ الْفَقْرَ وَيَأْمُرُكُم بِالْفَحْشَاءِ ۖ وَاللَّهُ يَعِدُكُم مَّغْفِرَةً مِّنْهُ وَفَضْلًا ۗ وَاللَّهُ وَاسِعٌ عَلِيمٌ
Satan promises you deprivation and thus commands you to immorality, whereas Allah promises you forgiveness from Him and bounty. And Allah is all-Encompassing and Knowing.52
The Qur’an frames perceptions of scarcity and abundance as polar opposites stemming from opposing sources. Satan exploits people’s fear of deprivation
as a motivator to engage in immoral financial behavior, whereas Allah promises forgiveness and to give from His abundance
as a motivator to engage in moral financial behavior. In other words, Allah is informing us that Satan will be diligent in finding ways to make a person feel deprived, which include feeling deprived of a higher income, a bigger home, a nicer car, and even non-material things that a person desires. Once the feeling of deprivation is rooted in the heart, Satan will take advantage of the spiritual bias and encourage the individual to engage in detrimental economic behavior. He will push and prod the person to seek what they desire by any means possible. It may be through encouraging interest-bearing loans to purchase what they desire or gambling to gain quick access to wealth. On an even more subtle level, he will command the person to withhold giving their wealth to charitable causes, suggesting that it is detrimental to be charitable at this particular time in life.53
The aforementioned findings that feelings of deprivation lead to the religiously immoral behaviors of gambling and securing high interest loans are more interesting and insightful now in light of this verse. Modern social science has provided specific examples of the relation between feelings of deprivation and immorality that the Qur’an highlighted 1400 years ago.
The Prophet ﷺ also gave a specific treatment to the spiritual bias of feeling deprived, saying, “Compare [yourself] to those who are lower than you [in wealth] and do not look at those who are above you [in wealth], for it is more suitable that you do not discount the blessings of Allah.”54
The Prophet is informing us that constant exposure to and comparison with the wealthy will lead a person to belittle the blessings that Allah has bestowed upon them, which again leads to feelings of deprivation. Thus, the psychological intervention that Islam recommends is for the believer to make downward social comparisons (i.e., to compare oneself with someone less wealthy) in order to feel blessed and grateful for the bounties one has been given. Using the wealthy as a reference point may lead to a scarcity mindset that leads to stinginess, whereas using the poor as a reference point should lead to an abundance mindset that leads to generosity.
Although making downward comparisons is preferred, it is likely that people will be exposed to the wealthy and wish for what they have. The Qur’an recommends what to do in this situation in Sūrat Tāhā,
وَلَا تَمُدَّنَّ عَيْنَيْكَ إِلَىٰ مَا مَتَّعْنَا بِهِ أَزْوَاجًا مِّنْهُمْ زَهْرَةَ الْحَيَاةِ الدُّنْيَا لِنَفْتِنَهُمْ فِيهِ ۚ وَرِزْقُ رَبِّكَ خَيْرٌ وَأَبْقَىٰ
And do not extend your eyes toward that by which We have given enjoyment to [some] groups of them, [its being but] the splendor of worldly life by which We test them. And the provision of your Lord is better and more enduring.55
In addition to reiterating not to look to the wealthy as a reference point, the verse adds that their wealth and possessions are in reality nothing more than a test from God that one should not wish upon oneself. The test of possessing wealth includes being grateful for it, being humble, and spending it appropriately; therefore, many scholars considered the test of wealth to be more difficult than the test of poverty.56
The Qur’an is full of stories of those who struggled and failed the test of wealth.57
These stories are meant to warn us about having the wrong mindset towards wealth and to correct a theological misunderstanding that many hold about wealth.
Theological myth: God rewards believers with wealth
فَأَمَّا الْإِنسَانُ إِذَا مَا ابْتَلَاهُ رَبُّهُ فَأَكْرَمَهُ وَنَعَّمَهُ فَيَقُولُ رَبِّي أَكْرَمَنِ
وَأَمَّا إِذَا مَا ابْتَلَاهُ فَقَدَرَ عَلَيْهِ رِزْقَهُ فَيَقُولُ رَبِّي أَهَانَنِ
And as for man, when his Lord tests him and [thus] is generous to him and favors him, he says, “My Lord has honored me.” But when He tests him and restricts his provision, he says, “My Lord has humiliated me.”58
In these verses from Sūrat al Fajr, Allah is correcting a theological myth that people hold about wealth, which is the belief that Allah honors people when giving them substantial wealth and that Allah humiliates people by withholding wealth. The reality is that both wealth and lack of it are trials that have no bearing on a person’s value in the sight of Allah. The Qur’an highlights the story of Qarun as an example for us. Allah gave tremendous wealth to Qarun, who was an Israelite in the land of the Pharaoh. His people admonished him not to be arrogant and to seek the pleasure of Allah and Paradise through using his wealth to do good. He responded arrogantly saying, “I was only given it because of the knowledge I have”59
and would flaunt his wealth before the people. Some of the Israelites were enamored with his wealth and fell into the theological bias wishing, “Oh, would that we had like what was given to Qarun. Indeed, he is one of great fortune.”60
Then, Allah caused an enormous sinkhole to destroy Qarun and his palace, opening the eyes of the people to the reality of wealth and Allah’s favors. They said, “Oh, how Allah extends provision to whom He wills of His servants and restricts it! If Allah had not conferred His favor on us, He would have caused the earth to swallow us. Oh, how the disbelievers do not succeed!”61
Thus, we can take a reminder from Qarun’s story not to envy the wealthy amongst us nor consider them more honorable in the sight of Allah. Allah clearly states, “Indeed, the most honorable of you in the sight of Allah is the most righteous of you.”62
The story is a reminder of the error of the capitalist mindset that “my money is mine because I earned it” and the myth that Allah honors people by giving them wealth.
Allah’s wisdom in distributing wealth
وَلَوْ بَسَطَ اللَّهُ الرِّزْقَ لِعِبَادِهِ لَبَغَوْا فِي الْأَرْضِ وَلَٰكِن يُنَزِّلُ بِقَدَرٍ مَّا يَشَاءُ ۚ إِنَّهُ بِعِبَادِهِ خَبِيرٌ بَصِيرٌ
And if Allah had extended [excessively] provision for His servants, they would have committed tyranny throughout the earth. But He sends [it] down in an amount which He wills. Indeed He is, of His servants, Acquainted and Seeing.63
This verse is another important principle of wealth in Islam. The believer should internalize that not only does Allah distribute wealth or withhold it as a test, but that he distributes it with His infinite wisdom with people’s best interests in mind. Allah may withhold an abundance of wealth from someone out of His infinite knowledge that the person would become corrupted by it, as He knows His servant best. This concept can be found in numerous aḥādith
, which despite the weakness in their transmission, support the meaning of the verse and the statements of numerous scholars. The Prophet ﷺ was reported to have said that Allah said, “Perhaps my righteous believer will ask me for wealth but I turn him from wealth towards poverty. Had I turned him towards wealth it would have been worse for him. Perhaps my righteous believer will ask me for poverty but I turn him from poverty towards wealth. Had I turned him towards poverty it would have been worse for him.”64
Ibn Taymiyyah and Ibn Kathīr both explained that poverty may be more beneficial for some people than wealth, whereas wealth may be more beneficial for others.65,66
However, this knowledge is only known to Allah, and the believer’s responsibility is to distribute wealth in the most appropriate fashion. Allah provides for people through various means, including through jobs, investments, inheritance, zakah
, and through people’s generosity. Therefore, the believer should always look for opportunities to be the means by which Allah provides sustenance to others.
The secret of barakah
implies increase and growth, and it may apply to that which is tangible (e.g., wealth) or immaterial (e.g., time). Barakah
connotes that something has received divine blessing and is therefore more productive, efficient, nourishing, or valuable. The Prophet ﷺ would invoke Allah for barakah
often. When the Prophet was given the first fruit of the season, he would take it and say, “O Allah, give us barakah
in our fruits, give us barakah
in our city [Medina], and give us barakah
in our our mudd
[a measure equal to two handfuls] and in our ṣāʿ
[a measure equal to four mudd
The Prophet ﷺ understood that something tangible would be more nourishing and valuable if Allah blessed it. That is why he taught the companions that “the food of one person is enough for two, the food of two is enough for four, and the food of four is enough for eight.”68
He further elaborated, “Gather together to eat and mention the name of Allah upon your food and Allah will put barakah
Thus, we understand that the value of a commodity is not fixed and intrinsic to the commodity. Rather, the extent to which the commodity benefits is proportional to the barakah
it has been given. The Prophet ﷺ explained this clearly when he said, “Both parties in a business transaction have the right to accept or reject the deal as long as they have not parted. If they tell the truth and make everything clear to each other [e.g., describe the defects and qualities of the goods], then their transaction is blessed. If they conceal anything and lie to each other, the blessing of their transaction will be eliminated.”70
This notion of barakah
is the secret to the contentment of the believer. If the believer has conviction that Allah can bless their halal
wealth and strip the barakah
wealth, the motive to seek wealth using impermissible means should be eliminated. Furthermore, through awareness that things can have more value than what is apparent, the believer is comforted in spending their wealth in a manner pleasing to Allah, as He alone possesses the ability to increase it in value.
Consequences of the Islamic worldview of wealth
أَوَلَمْ يَرَوْا أَنَّ اللَّهَ يَبْسُطُ الرِّزْقَ لِمَن يَشَاءُ وَيَقْدِرُ ۚ إِنَّ فِي ذَٰلِكَ لَآيَاتٍ لِّقَوْمٍ يُؤْمِنُونَ. فَآتِ ذَا الْقُرْبَىٰ حَقَّهُ وَالْمِسْكِينَ وَابْنَ السَّبِيلِ ۚ ذَٰلِكَ خَيْرٌ لِّلَّذِينَ يُرِيدُونَ وَجْهَ اللَّهِ ۖ وَأُولَٰئِكَ هُمُ الْمُفْلِحُونَ. وَمَا آتَيْتُم مِّن رِّبًا لِّيَرْبُوَ فِي أَمْوَالِ النَّاسِ فَلَا يَرْبُو عِندَ اللَّهِ ۖ وَمَا آتَيْتُم مِّن زَكَاةٍ تُرِيدُونَ وَجْهَ اللَّهِ فَأُولَٰئِكَ هُمُ الْمُضْعِفُونَ
Do they not see that Allah extends provision for whom He wills and restricts it? Indeed, in that are signs for people who believe. So, give the relative his right, as well as the needy and the traveler. That is best for those who desire the countenance of Allah, and it is they who will be successful. And whatever you give for interest to increase the wealth of people will not increase with Allah. But what you give in zakah, desiring the countenance of Allah, they shall have manifold increase.71
Developing the proper mindset and attitude towards wealth is optimal for both an individual’s well-being and that of society. Once the believer internalizes that wealth belongs to Allah, that they are merely trustees of what they have been given, and that what they do with their wealth is a test from Allah, they are now in position to spend and invest it properly. The above verses of Sūrat al-Rūm provide a formula for how beliefs about wealth transform into appropriate economic behavior. Rāzi mentions that the first verse orients the believer to who
gives rather than what
is given. If the attention is on the Giver, then one’s psychological state should not fluctuate if they are given a lot or a little, as the believer should have absolute trust in Allah and be content with their sustenance. Rāzi further states that when Allah declares that He alone extends and restricts [wealth], this implies that one should never hold back from giving freely, for if Allah gives then charity will not decrease one’s wealth, and if He restricts then holding onto one’s wealth will not increase it.72
This is the essence of the narration where the Prophet ﷺ mentioned the paradoxical nature of many faith-inspired actions. “Charity does not decrease wealth, no one forgives another person but Allah increases their honor, and no one humbles himself for the sake of Allah but that Allah raises their status.”73
Once these beliefs are firmly in the heart of a believer, we are commanded to give generously to our relatives, the poor, and travelers. There is an important connection between giving to those nearest to us and our psychological states. Recent neuroscience research has found that people who believe in the obligation to help family and kin find giving money to them to be just as personally rewarding and pleasurable as receiving money themselves.74
People from these interdependent backgrounds that value assisting others have increased mesolimbic reward system activation in the brain when contributing to their family compared to those who are more individualistic.75
This appears to be a neural manifestation of loving for others what one loves for themself.
Finally, the notion of growth is reframed in the third verse. From a worldly perspective, fixed-income securities (e.g., bonds, money-market accounts, certificate of deposit) are low-risk safe investments that typically rely on interest for growth. Many investors feel a sense of security when dealing with such interest-based assets. However, Allah informs us that money invested in these interest-bearing assets do not grow from His perspective, which is the only perspective that truly matters. In fact, such investments are seen as repulsive, as the Qur’an states that “Allah destroys interest and gives increase for charities.”76
Allah reframes the notion of compound growth by saying that it is charitable (e.g., zakah
) investments that are subject to compound growth. This juxtaposition of interest-based investments versus charitable investments as growth items is intrinsically tied to the notion of barakah