Sticking to a budget is something all UAE residents have to consider, no matter how much they earn. This week, The National’s Money section attended a financial literacy programme for low-income workers in Dubai organised by Western Union. During the session, the financial trainer, Becollan Mageto, detailed the 10 personal finance principles low-income workers should adhere to. But it’s something we could all live by. Here are the 10:
1. Get to know your income before spending
Make sure you know how much your monthly expenses will be before you start splashing the cash.
2. Save first, spend later
Have a budget and then save 10 per cent of your monthly salary somewhere you can’t touch. If you have money leftover at the end of the month, add that to your savings too.
3. Start saving young
If you are below 30, start saving now. Between the ages of 21 to 30, you might want to be generous towards your family. But as you get older, your expenses will increase. You will have your children’s higher education to consider, along with their marriages and any family medical issues. Start young and by the time you retire, you will have enough stashed away to live comfortably.
4. Distinguish between needs and wants
A need is having to eat, and to call your family back home. But if you see an iPhone 6 in the shop – that’s a want, because you can always buy a cheaper model. Before you go to the supermarket, tell yourself ‘I am going to the supermarket because I need to buy these items’ – and stick to that list.
5. Track your income and expenses
Every time you grocery shop, write down how much you spent. Maybe you called some friends - how much did that call cost? Or how much did that taxi fare set up back? At the end of the month, you will then see where you scan reduce your spending. This will help you track your income.
6. Stay within your budget
Stick to this rule and there is no reason for not saving every month.
7. Don’t borrow what you can’t repay
Only borrow what you know you can easily afford to pay back. If you have savings, and an emergency crops up, use those to cover it rather than burdening yourself with debt.
8. Discuss your personal finances with trusted people
If you have savings in the UAE, then it’s important to tell someone you trust - such as a member of your immediate family - that you are saving in such and such an account. But don’t tell a friend here that you have money, particularly if it is stored in your room.
9. Don’t fall for a high-risk scam
If someone tells you ‘I can help you to double your money’ – be very wary. Also don’t trust anyone who tells you ‘give me your money, I will send it to your home country for you’.
10. Invest your savings
As well as emergency cash savings, you need short-term savings which you can put away for one to three years. Tell your bank you have money that you don’t plan to spend for at least a year or two. Tell them you want the money to grow. They may advise depositing it into a long-term savings account. These are called fixed deposits and offer a higher interest rate on your savings.
Read more: This week in our Money section:
■ Money lead: 'Dh100 is enough to buy a month's food'
■ Keren Bobker: Unpaid debt on credit card rules out holiday plans for Dubai resident
■ Money & Me: Egyptian F&B entrepreneur in Dubai is fearless with business investments
■ Nima Abu Wardeh column: Proper parenting comes at a price
pf@thenational.ae
more from Janine di Giovanni
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
If you go
Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.
Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com
A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
