Money & Me: ‘I got on track with my savings after my family cut me off'

Entrepreneur Abdelrahman Rashwan says he is thankful for the lesson from his twenties

Abdelrahman Rashwan, of The Discounter, saves some of his money in Egyptian bank accounts that pay 13 per cent in interest. Chris Whiteoak / The National

Abdelrahman Rashwan is the founder of three companies, including Authentic8 Advertising, Spot On Event Management and The Discounter — a free app launched last year to compete with discount platforms such as The Entertainer and Groupon. Born in Egypt, Mr Rashwan, 30, moved to Dubai with his family at the age of three and has lived in the UAE ever since. While completing a bachelor’s degree in hospitality management from Emirates Academy, he worked as a sales executive at a Radisson hotel in Dubai before taking the plunge into entrepreneurship. He lives in a villa in the Meadows.

Borrowing from banks is a big regret … the first time I was burnt, I stopped it.

How did your upbringing shape your attitude towards money?

I come from a family of entrepreneurs. My mother actually started her own business when she was 17 and she built a mini empire. She started a local beauty salon while growing up in Egypt and within five years she opened five branches in Egypt. When she moved to Dubai, she opened [another] branch. She then opened three branches in Lebanon and one in Kuwait. It was very inspiring seeing her operating a business in all these countries. My dad has an oil factory back in Egypt.

They dedicated a lot of time for me — and I’m the only child, so you can imagine the kind of attention. At the same time, seeing how they managed and grew their businesses made me feel pressure to do something myself.

I was brought up in a way where everything I wanted was there, with a couple of spoiled years during my university life. I was getting my pocket money daily. Whatever was coming in, was going out the same day. It was straight away after that my family cut me off from everything — literally everything. No more cars, no more this, no more that; you’re not allowed to be in this house; you’re on your own. That is what set me on track. I am thankful it happened because if that lesson was not learnt during my twenties, I wouldn’t be where I am today.

How did that affect your money philosophy?

When I was cut off, my dad called his accountant and said ‘OK, here’s an excel sheet: this is how much you were given in the last three-and-a-half years. This amount, if you put it in a bank that gives you 10 per cent interest … you would make this amount in a year. Imagine this money if you invest it when you’re 18,19 or 20, by the time you’re 30 how much you would have’. And that’s when it hit.

When I started working — in a hotel because that’s what I studied — my mentality was I’m not going to be doing this for long. I took the decision that all the money from my entire third year [of university], would go into an account and I wouldn't touch it. Thank God the hotel paid for three meals a day and my transportation costs. I had no accommodation costs because I was staying in the dorms. I made around Dh12,000 a month, Dh134,000 a year. It’s not much, but it was enough for me to start my first company Spot On Event Management in 2013. I got an instant trade licence and an office space.

What led you to start an events management business?

We dealt with everything in regards to booking artists from abroad, bringing them to Dubai, renting the space out. Given that I was young, it was fun. Basically after 18 months of doing events, I realised I can’t live like that. A person brought up to wake up at 6am … can’t suddenly turn into a night creature that [starts the day] at 9pm and goes to sleep at 7am. So I turned the operations exclusively into corporate events.

Mr Rashwan says he has hit rock bottom financially twice in his life. Chris Whiteoak / The National

What about your other two companies?

I saw a lot of demand in the market for advertising agencies. In 2016, I started the second company, Authentic8 Advertising. Today we have over 380 active clients with us.

The Discounter concept is something I've wanted to do since day one. However, I started Authentic8 with zero capital. To do something like The Discounter app — it’s been five months of operations and we’ve already spent Dh750,000. I didn’t have that budget in 2016, so it seemed impossible. [Starting an advertising company was] a way to generate revenue and at the same time gain market knowledge.

We started developing the application in January last year and it then was very easy to approach our 380 clients and say, ‘we want to take your offers live’. We took our app live in September, and until the end of December we reached 10,000 users that have downloaded the app and we have approximately 100 vendors.

How do you save?

In Egyptian bank accounts; if you put money in a trust, they you give 13 per cent. If I have enough cash that I won’t need for a year, I put it there. Azerbaijan gives 18 per cent. I have an account there as well. [At one point] Lebanon gave 20 per cent if you put it in the Lebanese currency, because they wanted more investments to their central bank. I tried that in 2018, but then thank God I exited at the right time. I have a personal account here in the UAE and I never have more than Dh40,000 in it. The remaining, I either send to Egypt or Azerbaijan or invest it in one of my businesses.

Did you borrow money to fund your businesses?

Borrowing from banks is a big regret. I think if you have an opportunity to borrow from family, do that instead — because they’re not going to charge you high rates. Especially that, if you borrow from a bank and let’s say after a month or two, things pick up and you want to pay it off, banks tell you, ‘No, you can’t. You need to pay interest for six months and then you have to pay an additional 1 per cent to pay off the loan’. The first time I was burnt, I stopped it. That was in 2017; it was close to Dh800,000.

Have you ever had a month where you feared you could not pay the bills?

There have been a lot of stages where I went bankrupt, where I went zero — and sometimes it was even below zero. [Since] starting my business in 2013 … I’ve hit rock bottom two times. Growing up and trying to achieve something by yourself, you’re going to have to experience these things. Everybody has to experience this to know the value of money.

Mr Rashwan owns two properties on the north coast in Egypt, which he paid for in cash. Chris Whiteoak / The National

Do you have any other investments?

I have two summer houses on the north coast in Egypt. I paid for them in cash. However, I took a loan from the bank against these two properties. So I took the actual value of those properties and put that as a deposit in the bank and whatever interest comes out on a monthly basis, it pays back for the property and it makes me a profit on top. Plus I rent them out three months a year, so that brings me 16 to 17 per cent per year of the actual value. So in five years, I should triple my investments.

What is your retirement plan?

None. I like what I do and I’m happy. Just the idea that I’m free, I can do whatever I want, just makes you happy. I built myself a very comfortable lifestyle. I live close to my work, my gym … I have my dogs. Everything’s just perfect.