Purification of Impure Income

The following question and answer by Sheikh Yusuf Talal DeLorenzo attendees of the Dow Jones University Courses on Islamic Investement.Question:: In lesson 1 we learnt how a Muslim investor may trade in common stock so long as thepreconditions apply. In the section "The debate over Riba" it was clearly mentioned that whena company derives benefit from interest, the Muslim investor will be responsible for cleansinghis holdings. My question is : 1) How can one work out what percentage of riba is involved in their money ? It would seemvery difficult ?Answer: Yes, this is a very difficult task. But please refer to Lesson Six: Zakah and Purification,and then turn to the section entitled: Purification as a Fiscal Responsibility. There is a detailedexplanation there, and several examples with which to practice. Even so, the best way to accomplishthis sort of purification is by investing in a reputable Islamic mutual fund with a Shari`ahSupervisory Board that will work with the fund management and their accountants to ensure thateverything is done in complete compliance with the Shari`ah. If your fund cannot provide thisservice for its investor/ clients, it's time to look for another fund! Unfortunately, the numberof funds that offer such a service is limited. But when the funds that do not offer this servicebegin to lose clients and assets to funds that do, then we will see, Allah willing, more and morefunds offering the service. This is the nature of competition, and it is a healthy thing becauseultimately it is the consumer who benefits.