Is the hadith, "The best charity is that which comes from a position of wealth," authentic? Does it mean giving charity while retaining some money out of fear of need? And does it contradict hadiths such as, "Wealth is not diminished by charity"?

The two prophetic hadiths, "The best charity is that which is given when one has a surplus, and begin with those whom you are obligated to support," and "Charity does not decrease wealth," are authentic and do not contradict each other.

The first hadith indicates that the best charity is that which is given after the essential needs of the giver and those he supports have been met, so that he does not become needy after giving charity. The meaning of "surplus" here refers to meeting essential needs, for which preferring others over oneself is not permissible, as such preference might lead to harming oneself.

As for the second hadith, the denial of decrease mentioned in it is not a sensory decrease; rather, it implies an increase in blessing or compensation in reward. What is spent in the way of Allah does not truly decrease but rather grows and its reward is multiplied.

The statement, "Those who spend are like martyrs; they will have no fear, nor will they grieve," is not a hadith, but its meaning is sound and has been mentioned in the Holy Quran for both those who spend in the way of Allah and the martyrs.