Money & Me: ‘I once made Dh40,000 on a car that cost me Dh80,000’
The Smash Room co-founder Ibrahim Abudyak finds his biggest returns trading in the used car market
Ibrahim Abudyak is co-founder and managing partner at The Smash Room, a Dubai warehouse where people pay to break things and smash their stress away. Mr Abudyak, a Jordanian of Palestinian origin, moved to the UAE in 2010 to work as a service advisor at a car dealership. After life threw him an unexpected twist, the 31-year-old started The Smash Room with co-founder Hiba Balfaqih in 2017.
What brought you to the UAE?
I came to the UAE in 2010 for my first professional job three months after graduation. I studied mechanical engineering for five years in Jordan and I love cars, so cars is one of my biggest passions. The first seven years, I spent it between my entry-level job all the way to being a country manager in sales and marketing for a big international car company.
What led you to start The Smash Room?
I got fired all of a sudden, also without anticipating it. I thought I was doing great, every year I was getting a raise, I was getting promoted, until I reached to a point where my manager told me ‘you’re not welcome anymore, you’re out’.
I strongly believe in this term that says 'savers are losers'
When this happened, I thought maybe this is the universe giving me that kick in the butt. I was this close to going to a university here to study for my MBA. But then I used the same money - which was about Dh200,000 - educating myself the non-conventional way. Part of it was going to London for Tony Robbins. Over six months I attended more than six seminars from world-class people in online trading, forex, internet marketing, funnel hacking, building businesses and real estate investment between Dubai, Singapore, London and Malaysia.
What did that teach you?
I moved from someone who’s thinking in the normal context where your parents taught you to get a good degree, graduate, get married in between and have your retirement plan – and that’s it, that’s life. But there’s more to life than that. On the personal level, I got married really early, but I got divorced as well after just a few months of losing my job.
Through the seminars I met Hiba and she threw in The Smash Room idea and she said no one has supported her, no investor wanted to invest. I came in with my operational and business background; she is the creative mind and we were like the absolute perfect combination.
How did your upbringing shape your attitude towards money?
I was born in Kuwait, but when my family left Kuwait I was three. When my family moved from Kuwait to Jordan, they had to start over from almost zero. They lost everything during the Gulf War, so they had nothing.
My parents are very religious, very traditional. My father studied Islamic literature and had a very traditional government job. He started as an imam and then moved into a managerial position in the orphan centres. My mother was interested in teaching, so she had to get a job at some point also to support family. It was very humble beginnings - although my uncles started their own business in Jordan. The extended family was very close, so we were meeting them every week and you could see the differences between what my family could afford and what my uncles could afford because they managed to grow their business every year while my family was at the same level every year.
So I was brought up in this very traditional environment where the way you think about money is that “money is the root of all evil” and you should not put money as your goal. So you think oh OK, maybe I should just settle down for anything, and not think about having money or luxury because we should look at the afterlife. Which is all cool, but later on you’re exposed to the real meaning of money – and money to me now is just a tool to achieve whatever you want.
Are you a spender or a saver?
I strongly believe in this term that says “savers are losers”. I think it’s not about saving, it’s about how much income you can get, how much you can increase your income and how you optimise your spend. The logic behind it is that money loses its worth and its value over time. If you save, how much money can you get as a return on your savings every year in the best case scenario - 3 or 4 per cent? But you have the inflation rate, which sometimes exceeds 3 per cent in some countries, which means you’re actually losing on your savings.
My vehicles are positive cash-building businesses and also trading. Keeping your money in the bank to me is one of the worst ideas. I have silver coins, gold. I do have a bank account, but I maintain the minimum in my bank account to keep it running.
Do you have other investments?
I do car trading myself, which generates a profit percentage that is much, much higher than what I could get from a bank or even real estate. Cars have always been an asset, rather than a liability, to the point where I borrowed money from an Islamic bank as a personal loan. Yet the return is way higher than what you pay monthly. By selling just four or five cars in less than three months, I covered the interest that the bank took for the entire four-year period. I once made Dh40,000 pure net profit on a car that cost me Dh80,000. The time frame between buying and refurbishing and doing the necessary maintenance and then selling it was a month. Show me any business or any bank that can give you 40 per cent return on investment – no way.
I use more than 70 per cent of what I can invest in businesses. The Smash Room is one of them and now we’re investing into the business even more with a franchising system.
Have any of your investments failed?
I did some forex trading and this is one of the biggest learnings I’ve gone through. I lost quite a lot of money, because I did it the wrong way. I was making a really good amount of money, almost doubled it, but then I lost it all. I think it was around Dh200,000 in total. Now I’m more careful. I learnt when I should exit and if I start again I’ll trade with much smaller amounts of money that I can afford to lose.
What are your main expenses?
I keep it really simple. Rent is my biggest expense. I drive a 12-year-old Jeep Cherokee. I never bought a brand new car in my nine years of living here. I think it’s a very bad decision. I made a lot of money on cars by not buying brand new cars. As a car guy, I tend to change my car very often.
Have you ever had a month where you feared you could not pay the bills?
It happens every now and then. I’m just accustomed to it, so it doesn’t freak me out anymore. Sometimes you make a lot of money in one month and then the other month you make none. If you’re not really psychologically ready and strong in terms of how you can handle this insecurity, instability, then you can easily just go back to take whatever job the market will throw at you and just accept it.
What would you splurge on?
A really nice holiday. I haven’t taken a real vacation in over two years. That would be my first choice. The second, really closely following that, would be a Porsche.
Updated: May 25, 2019 01:32 PM