Follow these rules to achieve an investment portfolio worth $1m. Getty Images
Follow these rules to achieve an investment portfolio worth $1m. Getty Images
Follow these rules to achieve an investment portfolio worth $1m. Getty Images
Follow these rules to achieve an investment portfolio worth $1m. Getty Images

How to build a $1m portfolio by the time you retire


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Who wants to be a millionaire? It's not an easy goal to achieve and only the select few will be able to generate an income of $1 million (Dh3.67m) a year.

But when it comes to your investment portfolio, building a fund worth $1m in total is within many ordinary people's reach, provided they have plenty of time, get down to the task and stick with it. Here's a guide to how to make it happen.

Start as early as possible

In simple terms, if you invested $500 a month from the age of 25, and your money grew at an average rate of 7 per cent a year after charges, you would have $1.28m by the age of 65.

Save as much as you can

Due to inflation, $500 a month may not be enough to retire on by the time you turn 65, so you might need to save more than that, depending on your age.

If you are older, you will need to save more. So at 35, you will need to set aside $1,000 a month to build a similar-sized pot, that’s twice as much, and at 45, around $2,250 a month. So the first rule is that there is no time to waste.

Don't waste money on things you do not need

Stuart Ritchie, director of wealth advice at Dubai-based AES International, says building a large investment portfolio is possible for anybody on a reasonable income. What you need is discipline and a plan of action. You also have to commit yourself to the project.

“Life isn’t a rehearsal," he says. "You don't get a second chance at this, so do not waste time.”

His key tip is to spend less than you earn. “There’s a general rule of thumb called the 50/30/20 rule to building your wealth," Mr Ritchie explains. "It says that 50 per cent of your salary should go towards things like accommodation, food and bills, 30 per cent towards entertainment, eating out and shopping, and the remaining 20 per cent should be saved.”

Financial experts say novice investors should read author Andrew Hallam's books, such as Millionaire Expat: How to Build Wealth Overseas, to help them understand how to invest in low-cost ETFs. Antonie Robertson/The National
Financial experts say novice investors should read author Andrew Hallam's books, such as Millionaire Expat: How to Build Wealth Overseas, to help them understand how to invest in low-cost ETFs. Antonie Robertson/The National

Increase your monthly contributions by 3% every year

Mr Ritchie's second key tip is to not ignore inflation. “For millennials, with around 40 years until retirement, $1m will have the same spending power as around $300,000 today​, and it will continue to shrink throughout your retirement," he explains.

Mr Ritchie says you should work on the assumption that your money will shrink by 3 per cent a year on average: “Every year, you should invest at least 3 per cent more, just to keep up."

The good news is that salaries and bonuses typically rise every year. “Invest your spare capital, but do not speculate, take undue risks or fall for get-rich schemes,” he adds.

Mr Ritchie also recommends investing in some self-education, because financial literacy is a core life skill. "Andrew Hallam's Millionaire Teacher is truly inspiring and shows how the author managed to build up a $1m portfolio on a modest salary," he says.

Demos Kyprianou, a board member of SimplyFI.org, advises investing a portion of your salary the moment it hits your bank account. Leslie Pableo for The National
Demos Kyprianou, a board member of SimplyFI.org, advises investing a portion of your salary the moment it hits your bank account. Leslie Pableo for The National

Invest directly after receiving your monthly salary

Work out how much you need to save each month and make it a habit, says Demos Kyprianou, a board member of SimplyFI, a non-profit community of personal finance and investing enthusiasts in Dubai. “As soon as you get your salary, invest regularly in passive, low-cost exchange traded funds (ETFs), either monthly or quarterly, and live on what you need with as few luxuries as possible."

Keep it simple

Some people make portfolio planning complicated, but Mr Kyprianou says you can keep it simple with just two global ETFs: Vanguard FTSE All-World ETF (VWRD) invests in a spread of global equities, while you can get some exposure to lower-risk bonds with the iShares Global Govt Bond UCITS ETF (IGLO).

Do not time the market - buy and hold for the long term

Offshore investment guru Andrew Hallam, author of Millionaire Expat: How to Build Wealth Overseas, says to build a $1m portfolio, you also need to stay the course during periods of stock market underperformance.

Investors have done well over the last decade, which has seen the longest bull market run in history, but it won’t always be like that.

Mr Hallam says when markets fall, some people sell their holdings or cancel their regular monthly payments, especially if they stay low for some years. “It's easy to say, ‘yes, I can handle a market crash’, but one year is a long time to wait for most people to see a gain, three years feels like an eternity, and after that people begin to question their strategy.”

Investors in the S&P 500 made little in the first decade of the millennium, but the index took off after the financial crisis in 2009, climbing 380 per cent from 677 to around 3,280 at time of writing, according to Refinitiv data.

Choose low-cost globally diversified ETFs

Mr Hallam also believes in achieving your goal by investing in a portfolio of passive ETFs, mostly those investing in stocks and shares, but with some exposure to bonds, which are less risky and deliver a lower return over the longer run.

This may seem odd, given that over an investment lifetime, a portfolio that is 100 per cent in stocks would beat a portfolio that is 70 per cent in stocks and 30 per cent in bonds, Mr Hallam says. “The problem is that stocks are more volatile, but if you hold bonds as well, your portfolio will not fall as far in a correction.”

Look beyond short-term stock market volatility

A balanced portfolio means it should still grow even when markets are struggling, helping you maintain your resolve. “Diversified investors stand a higher chance of succeeding,” Mr Hallam says.

When filling your portfolio, the fewer "moving parts" the better; as a result, Mr Hallam favours all-in-one portfolio funds.

US nationals can invest in low-cost ETF provider Vanguard's Target Retirement Funds. “They are also available to Canadians and Australians, in the form of all-in-one portfolio ETFs,” Mr Hallam says.

UAE residents can purchase these from a discount brokerage such as Interactive Brokers, Internaxx or Saxo Capital Markets. “These are diversified portfolios of indexes wrapped up into single funds. Best of all, they rebalance automatically so you don’t have to do it yourself," he says.

UK residents can buy all-in-one funds directly from Vanguard UK, where they are called Life Strategy Funds. “British expats in the UAE can buy the same products, but at this point, only from Swissquote," adds Mr Hallam.

Stick at it

So what stops everyone from doing the same as Mr Hallam? All too often, people are their own worst enemy, Mr Ritchie explains. “Like dieting and exercise, it is easy to find an excuse not to do it," he says. "The right financial plan, budget and spending habits can get you there but only if you have the discipline.”

Enjoy life along the way

Mr Kyprianou says if you need to up your motivation levels to hit your $1m goal, imagine how your life would look if you had that amount stashed in the bank. "Be specific, imagine where you would like to be, and what you would could be doing,” he says.

While saving the maximum makes sense, do not overdo it. “Spend some money to enjoy life today, whether travelling or other activities," Mr Kyprianou says. "Saving like crazy only to end up being miserable will not help anybody.”

He suggests reading research on the connection between money and happiness. "The best book I've read on this subject is Kim Stephenson's Taming the Pound, which tells you how to make money your servant, not your master," he says

Mr Kyprianou recommends monitoring your spending for a month and cutting out anything that is either not essential, or does not make you happy. "If retail therapy isn't working for you, it’s time to cut back.”

That millionaire portfolio could be yours, so what are you waiting for? The sooner you get started, the better your chances of making it.

Test

Director: S Sashikanth

Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan

Star rating: 2/5

The%20specs
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If you go...

Etihad Airways flies from Abu Dhabi to Kuala Lumpur, from about Dh3,600. Air Asia currently flies from Kuala Lumpur to Terengganu, with Berjaya Hotels & Resorts planning to launch direct chartered flights to Redang Island in the near future. Rooms at The Taaras Beach and Spa Resort start from 680RM (Dh597).

ELIO

Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett

Directors: Madeline Sharafian, Domee Shi, Adrian Molina

Rating: 4/5

The specs: 2019 Mercedes-Benz C200 Coupe


Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km

Infiniti QX80 specs

Engine: twin-turbocharged 3.5-liter V6

Power: 450hp

Torque: 700Nm

Price: From Dh450,000, Autograph model from Dh510,000

Available: Now

The biog

First Job: Abu Dhabi Department of Petroleum in 1974  
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work

Maestro
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Jawan
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North Pole stats

Distance covered: 160km

Temperature: -40°C

Weight of equipment: 45kg

Altitude (metres above sea level): 0

Terrain: Ice rock

South Pole stats

Distance covered: 130km

Temperature: -50°C

Weight of equipment: 50kg

Altitude (metres above sea level): 3,300

Terrain: Flat ice
 

MATCH INFO

Uefa Champions League, semi-final result:

Liverpool 4-0 Barcelona

Liverpool win 4-3 on aggregate

Champions Legaue final: June 1, Madrid

Types of bank fraud

1) Phishing

Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.

2) Smishing

The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.

3) Vishing

The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.

4) SIM swap

Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.

5) Identity theft

Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.

6) Prize scams

Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.

WOMAN AND CHILD

Director: Saeed Roustaee

Starring: Parinaz Izadyar, Payman Maadi

Rating: 4/5

Kill%20
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MATCH INFO

World Cup qualifier

Thailand 2 (Dangda 26', Panya 51')

UAE 1 (Mabkhout 45 2')

UAE currency: the story behind the money in your pockets

SM Town Live is on Friday, April 6 at Autism Rocks Arena, Dubai. Tickets are Dh375 at www.platinumlist.net

Champions parade (UAE timings)

7pm Gates open

8pm Deansgate stage showing starts

9pm Parade starts at Manchester Cathedral

9.45pm Parade ends at Peter Street

10pm City players on stage

11pm event ends

Pad Man

Dir: R Balki

Starring: Akshay Kumar, Sonam Kapoor, Radhika Apte

Three-and-a-half stars

BIGGEST CYBER SECURITY INCIDENTS IN RECENT TIMES

SolarWinds supply chain attack: Came to light in December 2020 but had taken root for several months, compromising major tech companies, governments and its entities

Microsoft Exchange server exploitation: March 2021; attackers used a vulnerability to steal emails

Kaseya attack: July 2021; ransomware hit perpetrated REvil, resulting in severe downtime for more than 1,000 companies

Log4j breach: December 2021; attackers exploited the Java-written code to inflitrate businesses and governments

UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

Match info

Manchester United 1 (Van de Beek 80') Crystal Palace 3 (Townsend 7', Zaha pen 74' & 85')

Man of the match Wilfried Zaha (Crystal Palace)

The specs

Price, base / as tested Dh12 million

Engine 8.0-litre quad-turbo, W16

Gearbox seven-speed dual clutch auto

Power 1479 @ 6,700rpm

Torque 1600Nm @ 2,000rpm 0-100kph: 2.6 seconds 0-200kph: 6.1 seconds

Top speed 420 kph (governed)

Fuel economy, combined 35.2L / 100km (est)

Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

The lowdown

Rating: 4/5

Tips for newlyweds to better manage finances

All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.

Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.

Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.

Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.

Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.

Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.

Uefa Nations League: How it works

The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.

The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.

Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.

MATCH INFO

South Africa 66 (Tries: De Allende, Nkosi, Reinach (3), Gelant, Steyn, Brits, Willemse; Cons: Jantjies 8) 

Canada 7 (Tries: Heaton; Cons: Nelson)

The specs

Engine: 2.0-litre 4-cylinder turbo

Power: 240hp at 5,500rpm

Torque: 390Nm at 3,000rpm

Transmission: eight-speed auto

Price: from Dh122,745

On sale: now

The specs: 2019 BMW X4

Price, base / as tested: Dh276,675 / Dh346,800

Engine: 3.0-litre turbocharged in-line six-cylinder

Transmission: Eight-speed automatic

Power: 354hp @ 5,500rpm

Torque: 500Nm @ 1,550rpm

Fuel economy, combined: 9.0L / 100km

Specs

Engine: 51.5kW electric motor

Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.

States of Passion by Nihad Sirees,
Pushkin Press

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%3Cp%3EEncourage%20innovation%20in%20the%20metaverse%20field%20and%20boost%20economic%20contribution%3C%2Fp%3E%0A%3Cp%3EDevelop%20outstanding%20talents%20through%20education%20and%20training%3C%2Fp%3E%0A%3Cp%3EDevelop%20applications%20and%20the%20way%20they%20are%20used%20in%20Dubai's%20government%20institutions%3C%2Fp%3E%0A%3Cp%3EAdopt%2C%20expand%20and%20promote%20secure%20platforms%20globally%3C%2Fp%3E%0A%3Cp%3EDevelop%20the%20infrastructure%20and%20regulations%3C%2Fp%3E%0A
Haircare resolutions 2021

From Beirut and Amman to London and now Dubai, hairstylist George Massoud has seen the same mistakes made by customers all over the world. In the chair or at-home hair care, here are the resolutions he wishes his customers would make for the year ahead.

1. 'I will seek consultation from professionals'

You may know what you want, but are you sure it’s going to suit you? Haircare professionals can tell you what will work best with your skin tone, hair texture and lifestyle.

2. 'I will tell my hairdresser when I’m not happy'

Massoud says it’s better to offer constructive criticism to work on in the future. Your hairdresser will learn, and you may discover how to communicate exactly what you want more effectively the next time.

3. ‘I will treat my hair better out of the chair’

Damage control is a big part of most hairstylists’ work right now, but it can be avoided. Steer clear of over-colouring at home, try and pursue one hair brand at a time and never, ever use a straightener on still drying hair, pleads Massoud.

The smuggler

Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple. 
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.

Khouli conviction

Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.

For sale

A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.

- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico

- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000

- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950

Most sought after workplace benefits in the UAE
  • Flexible work arrangements
  • Pension support
  • Mental well-being assistance
  • Insurance coverage for optical, dental, alternative medicine, cancer screening
  • Financial well-being incentives 

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

UAE currency: the story behind the money in your pockets