Mr Abdulkareem, 42, studied civil engineering and now works as a resident engineer for an international consultancy in Dubai.
Mr Abdulkareem manages a “moderate-sized fund” for friends and family. He lives with his wife and twin children, aged four years, in Emaar South, Dubai.
What was your first job and how much did it pay?
I graduated in 2003 and spent almost five years in Egypt.
My first job was as an engineer in Egypt in 2004 on a very minimum salary, it didn't exceed $100 per month at the time. I tried to gradually increase my income.
However, when I got an opportunity in the UAE, it was five times my salary in Egypt. Engineers were in demand in the Gulf.
So, I decided to move here in 2008 to gain more experience. It was not only to get a better income.
I was a site engineer with a contracting company and earned a monthly salary of Dh5,000 ($1,361).
When did you start earning a side income?
I always had a passion to start new businesses to make a side income. So, I started saving and started a contracting company. But it wasn’t successful.
Then, I accumulated money in 2015 and started a farm in Ajman. However, I realised that one had to undertake studies about expenses and income before starting a business.
I had to raise a big amount, but was spending more than what I raised. The business didn’t do well and I shut it down after a year.
Meanwhile, I was working on my passion of portfolio management and stock trading and this clicked.
I believe a person needs at least three sources of income. Right now, I earn money from different sources: my nine-to-five job as a consultant and portfolio management by running a small fund for friends and family.
I ventured into portfolio management in 2021.
How did you learn to trade in stocks?
I learnt to trade stocks in 2011 as it is my passion. My first experience was currency trading and forex trading.
Gradually, I read books and learnt from the internet to do common stock trading, which opened me to the world of corporate finance and financial management.
I wanted to reinforce my knowledge with academics. So, I started taking certifications and joined the Corporate Finance Institute in Canada in 2020. The online course added to my financial knowledge.
Later, I wanted to do an MBA in finance and enrolled with the Gies College of Business at the University of Illinois in the US. I am almost halfway through the course.
I believe learning is a never-ending process. I even wish to do a PhD one day.
Do you have any other side hustles?
In 2023, I published a book, which is sold on Amazon. So, I receive some revenue from it.
My book is titled From Novice to Investor: Your 10 Days Stock Investing Guide.
I also have a financial blog called Cash a Wish, which focuses on financial freedom and personal finance.
It's in the initial stages and I plan to monetise it gradually. Maintaining the blog needs discipline and consistency.
I don't advise people to start many things at the same time.
What does your portfolio management job involve?
I help people to invest their savings. I act as their adviser and decide what stocks to buy and what to sell.
I handle the growth of their portfolios. I aim for annual revenue growth of about 25 per cent.
I currently manage a moderate-sized fund for friends and family.
How do you dedicate time for this?
Since I'm a long-term investor/portfolio manager, I don’t need to sit in front of the screen buying and selling shares. I am not into day trading.
I read about companies, earnings and revenues. I follow my gurus in this field: Warren Buffett, Mohnish Pabrai and Peter Lynch. I learn from their writing and books.
I check the portfolios I manage twice or three times a week.
How much do you earn from portfolio management?
I usually charge an annual fee of 5 per cent of my overall portfolio size. But this is not a fixed fee, it depends on the performance of my clients’ portfolios.
I earn about Dh80,000 a year from portfolio management. I want to earn the majority of my income, say 90 per cent, from portfolio management one day.
I plan to increase this income to Dh300,000 in the next couple of years.
Currently, my major source of income is from my nine-to-five job.
Do you save and what asset classes do you invest in?
I save aggressively every month and this amount is channelled towards investments. I save about 50 per cent of my monthly salary.
I invest in stocks for the long term. I diversify my stock investments in clean energy, pharmaceuticals, technology and semiconductor exchange-traded funds.
I currently receive very high revenue from semiconductor stocks. But, it's not always positive.
I also own stocks in companies like Apple and Ford.
Sixty per cent of my portfolio is allocated to ETFs, 20 per cent to individual companies and between seven per cent and 10 per cent is in cash for new opportunities.
How often do you rebalance your own portfolio?
I check my portfolio every month. If it requires some balancing, I'll do it.
Have you purchased property in the UAE or elsewhere?
I have two properties in Egypt; one is rented out and the other isn’t. They are fully paid up.
I rent a property in Dubai. I tried to buy property here, but prices were expensive. Once the prices went down, I didn't have sufficient cash.
I don't like to take out a mortgage.
Do you have any debt?
I have no debt, except about Dh3,000 monthly on the credit card, which I pay off in full. I use credit cards only to avail of points, cashback schemes and other offers.
This aversion to debt can be traced back to an incident before the pandemic.
I had opened a foodstuff kiosk called Ougi Franks in a mall in Dubai in 2019. But I had to close it in 2020 because I couldn't sustain the loss caused by Covid-19 closures.
I had taken a personal loan to start that business and it was a very bad experience. I ended up paying back the loan from my salary.
From that date, I decided not to have even one fil as debt.
Have you ever inherited a sum of money?
No. I have earned all my money so far and am self-funded.
Growing up, were you taught how to handle your finances?
We learnt by observing our parents. I come from a middle-class family in Egypt. My father was an accountant and mum did not work.
We were taught to manage our expenses and were given a certain amount of money every week to fulfil our requirements in school and college.
We were taught not to spend the entire amount in one go and ask for more.
My siblings and I received money on occasions like Eid and we would plan how to spend it, so we'd never run out of money.
What are your major monthly expenses?
It’s mostly on house rent. Because my kids are still young, I expect next year's expenses to mainly come from education.
Right now, my expenses per month add up to between Dh7,000 and Dh8,000. I save the remaining amount.
I abide by the principle of “pay yourself first”. I learnt it from a book called The Richest Man in Babylon.
Do you have an emergency fund?
My emergency fund is safe in my portfolio because I'm a long-term investor.
I consider that percentage of money, which I keep as cash in my portfolio, as my emergency fund.
However, it is not something in my bank’s current account, it’s in my portfolio account.
Have you started saving for retirement?
I'll never retire because I do something I love.
Maybe later, I will quit my nine-to-five job. I look forward to being financially independent in a couple of years.
But I'll still work as a fund manager or become a non-executive board member in publicly traded companies.
What do you spend your disposable income on?
I spend on family entertainment. I allocate between Dh1,000 and Dh1,500 every month for this purpose.
Do you ever worry about money?
No, I don't worry about money now. But I used to worry between 2009 and 2010 before I was financially literate.
Money is not a goal, rather it’s a vehicle to get you from point to point. Once you learn how to utilise this vehicle, you will not have financial worries.
Concerns arise when you don't have knowledge on how to navigate this vehicle.
If you know how to handle your expenses, be in the right place at the right time and grab opportunities, money will follow.
Once I read more, took certifications and started my MBA, it made me feel more comfortable with money.
I'm not making money every day from portfolio management, but I feel like I can handle it.
Do you earn passive income?
I earn it from my book and hopefully from the blog, soon.
I also earn dividends from companies in my investment portfolio.
What strategies do you use to offset inflation?
Don’t keep your money in the bank or cupboard. It will erode the value by at least 3 per cent.
I hedge against price hikes by buying stocks in companies that have a strategy to deal with inflation.
What are your financial goals?
My short-term goal, say within two years, is to quit my nine-to-five job and scale up my portfolio management.
My long-term goal, say in 10 years, is to become a board member for at least two publicly traded or listed companies.
What is your idea of financial freedom?
That’s a phase when you don't have worries and you own your time.
I am on track to be financially independent in two years.
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