Investment activities have essentially existed since the time of Prophet Muhammad (peace be upon him). The Prophet was not only recognized as a spiritual leader and role model for Muslims in daily life, but also as a successful figure in trade and business.

So, what kind of investment strategy did Prophet Muhammad practice?

According to the research titled The Rasulullah Way of Business (2021), Prophet Muhammad’s primary capital was trust. Because of his honesty and integrity, he was able to gain the confidence of investors who were willing to entrust their capital to him.

After managing businesses using funds from these investors, Prophet Muhammad distributed profits to them through a profit-sharing system. Following that, he also made investments aimed at generating passive income.

One form of investment practiced by Prophet Muhammad was livestock farming. He had developed this skill since childhood and continued it into adulthood by owning dozens of camels. In addition, the Prophet was also known to own several other animals, including horses, donkeys, cattle, and sheep.

Beyond livestock farming, Prophet Muhammad also invested in land and property. A report from Musaffa states that land leasing was carried out with Jewish partners using a profit-sharing arrangement.

The Prophet also leased date plantations and land in Khaybar to Jewish residents. They were allowed to live on the land, cultivate it, and share the profits generated from it. This profit-sharing concept later became known as mudharabah.

One important aspect of the Prophet’s investment practices was his commitment to charity. In Islamic teachings, it is emphasized that a portion of a person’s wealth belongs to others, and helping those in need brings significant blessings and rewards.

Prophet Muhammad did not hoard his wealth. He was widely known for his generosity, frequently giving charity in the form of money, clothing, and food.

Ultimately, for those who wish to follow Prophet Muhammad’s approach to investing, they may consider assets such as property, land, and livestock. At the same time, they should also remember to regularly give charity.