Money & Me: ‘I try to save on things that don't add to the quality of my life'

Raphael Nagel, a venture capitalist, says his most cherished investment is a painting by Spanish artist Joan Miró

Raphael Nagel, a venture capitalist and co-founder of the Abrahamic Business Circle, says the biggest problem being an investor is to find the right opportunity at the right time and exit at the correShow more

A venture capitalist with a philanthropic heart, Spanish-German businessman Raphael Nagel has used the Abraham Accord to expand his multi-faceted portfolio. The 50-year-old father of five who lives in Dubai, and is co-founder of the Abrahamic Business Circle, sees economic diplomacy as key in building relationships between nations, in addition to helping bridge the catastrophic divide between rich and poor.

How did your upbringing shape your attitude towards money?

My father was a banker and entrepreneur and thanks to his education, I have been taught finance from childhood. My parents taught me that money is a tool but at the same time, it’s like a plant and you have to take care of it.

How much did you get paid for your first job?

Dh1,000 per month for a training programme in a logistics company in Germany. I was 17 years old. At the time, it felt like a huge amount of money because it was the first money I ever earned.

Are you a spender or a saver?

I try to keep a balance. I spend on things I really appreciate and save for the long term. Having five children – aged 3 months to 20 years – you think about ensuring they all finish their education.

What is your most cherished purchase?

A painting from a Spanish artist, Joan Miró. I think it’s an amazing investment. I bought it at the right moment. His paintings get to reach millions. I bought it 10 years ago. I felt his paintings would be a nice alternative investment as he was one of the leaders of the Surrealist movement and a great painter of Spanish culture and traditions.

Where do you save?

In many little things – for example, I never fly business class, even when I had the allowance to fly. I felt it gave the wrong example to the rest of the staff. At the end of the day, the idea of business is to create sales, and on the other, is to control costs. Only if you’re able to increase sales and reduce costs, you can make money. I try to save on more personal things, but not with other people. I’m happy to invite everyone for lunch, but I would save on my own lunch. I try to save on the things that I feel doesn’t add quality of life for me.

What has been your best investment?

Real estate bought at the right moment and the right price. In Berlin, I bought the former headquarters of the Luftwaffe (German air force in the Second World War) in 2010 and converted it into a nanotechnology manufacturing plant, and then sold the building to an investor. I wanted to change a negative part of history into something positive for the future. As a Jew, that meant a lot to me. It’s one of the strangest stories of my life but I loved it.

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

More than once. As an investor, there is one problem; finding the right opportunity at the right time, and, of course, finding the exit at the right time. Sometimes you buy more than you can and can’t exit at the right time, so you have cash flow problems.

Do you use a financial adviser?

I do. I use different ones according to the investment strategy. Some of my investments are short-, medium- or long-term, so depending on the profile, I will use them. I believe in advisers even though a lot of people are resistant to them.

Do you have any financial regrets?

Lending money to friends is probably the biggest financial regret as I lost money, and friends.

Do you plan for the future?

Always …. Only if you know where you want to go, will you reach there.

What luxuries are important to you?

The most important things to me are good food, paintings and books. I love to spend money on books and paintings.

How much do you have in your wallet right now?

Dh300. I nearly always use debit cards.

What car do you drive?

Nissan Patrol. I originally bought it for my wife and the kids but she found it too big. She ended up with my Mercedes-Benz S Class and I ended up with the Patrol.

Do you prefer using a credit card or cash?

I prefer debit cards as it allows me to control my expenses. If I pay cash, I don’t have a nice statement. I hate credit cards.

What financial advice would you offer your younger self?

I wouldn’t really give any advice because I think the best experience in life is your own experience. If I tell my son not to do something, it will only encourage him to do it, so I let him find his own way.

What would you raid your savings account for?

For the education of my children.

Tell us about your financial philanthropic work.

During the financial crisis in Spain around 2012/13, a lot of men left the country leaving wives and families behind, so I set up a foundation (The Nagel Foundation) financed with my money to help in-debt families. We educated these women to manage their finances, sent children on trips to things like football matches, and went to schools and educated thousands of children on the value of money and how to spend and save.

How will the recent Abraham Accord affect your business?

Very positively. Finally, we will be able to create a unique economic zone in the Middle East, that’s my big hope, the big common market of the region. From there, we should be able to make a big difference. Running 27 companies in different sectors, I think in all of them. It will afford a lot of opportunities, investments, tourism, import-export and so on.

What are your views on the power of economic diplomacy?

I’m a strong believer in economic diplomacy. From my point of view, there are only five points from freedom to war, and all of them depend on eating. If someone doesn’t have food to eat, there is a risk of conflict, so the biggest challenge is ensuring that everyone has prosperity and a safe future. One of the big things for me is the distribution of wealth in the world. We can always see that less people have more and more people have less. This is one of the biggest challenges to peace. There has to be an acceptable redistribution of wealth.