As we seem headed for round two of the Great Financial Embarrassment, it might be a good time to look at survival strategies for getting through a recession.
Rule one: resist the urge to strangle anyone who tells you to get out of debt.
You might be one of the few who does not owe large amounts of money to anybody. Hooray for you. Most of us, though, live at the pleasure of HSBC or some other banking institution. We owe money and probably will until the man with the big scythe comes along.
The priority, therefore, is not so much getting out of debt, but managing it. A good credit score - and line of credit - is gold. Banks might be clutching their pennies as tightly as an old lady with a handful of coupons. But when they do lend it, it's cheap. The UAE, with its US-tied dirham, has among the lowest lending rates in the world right now.
Put another way - why borrow when banks are eager to give it to you because they're coining it due to high interest rates? Ordinarily, I would not advocate shopping as a good way to spend money you don't actually have. But if you need to run up your credit cards, now is the time to do it.
Economists make a basic assumption that when a recession ends, it does so with a bang. Years of pent-up demand mean consumers go wild, replacing cars, TVs and treating themselves to holidays. It's also a given that manufacturers and retailers use this time as well - to hike prices to make up for years of low growth.
During hard times, they can't pass cost increases to the consumer. They have to eat inflationary costs, just to keep their market share. Just look at the grocery war under way in the UK right now. Tesco, Sainsbury's and Asda are racing to the bottom with prices to lure reluctant consumers, who in good times were piling up their trolleys. You can bet they won't be doing this when good times return, whatever their advertising agencies tell you.
This downturn won't last. Ergo, if you have cash, or a decent credit line, now is the time to use it. Of course, this does not mean maxing out your cards. Debt, like marriage, is tricky to manage. You don't want it to manage you.
I do get the point that paying interest on credit used to keep the lights burning is kind of a tax. And it can quickly get out of control. No doubt, quite a few people can testify to the consequences of mismanaging debt, more so on the back of high interest rates.
But unless someone comes along - another Karl Marx, for instance - we are going to live in a world that will be heavily dependent on your ability to run up your credit cards.
It's interesting to see that even some conservative economic observers put their hands in their heads when David Cameron, Britain's prime minister, said consumers should pay off their credit and store cards. "Clueless Cameron's Credit Card Gaffe" ran a headline in the Daily Mirror.
Clearly, Mr Cameron does not get it. As a species, we are genetically wired to go out and work, then spend like crazy to help us forget the miserable hours spent in the office. And the last thing the financial system needs is less consumer spending.
As for how much credit is good, my approach is to make sure that I can pay off my credit card within a couple of months. But I like to see it at a zero balance at least once a month, even if it's just for a few hours.
Properly managed, your credit line can also be a life-saving bridge should you lose your job. It can pay your expenses and, possibly, relocation costs.
But to keep it, you need to use it. Banks are now closely monitoring their client's credit activities. Running up your cards and quickly paying them off are a good sign. They will be more inclined to extend further credit if they can see you manage it.
So keep using your credit cards and overdraft. But do so carefully. Well-managed debt can make all the difference when you face a genuine financial crisis.
Gavin du Venage is a business writer and entrepreneur based in South Africa.
[ pf@thenational.ae ]
UAE currency: the story behind the money in your pockets
The end of Summer
Author: Salha Al Busaidy
Pages: 316
Publisher: The Dreamwork Collective
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
The specs
Engine: 6.2-litre V8
Transmission: seven-speed auto
Power: 420 bhp
Torque: 624Nm
Price: from Dh293,200
On sale: now
Coffee: black death or elixir of life?
It is among the greatest health debates of our time; splashed across newspapers with contradicting headlines - is coffee good for you or not?
Depending on what you read, it is either a cancer-causing, sleep-depriving, stomach ulcer-inducing black death or the secret to long life, cutting the chance of stroke, diabetes and cancer.
The latest research - a study of 8,412 people across the UK who each underwent an MRI heart scan - is intended to put to bed (caffeine allowing) conflicting reports of the pros and cons of consumption.
The study, funded by the British Heart Foundation, contradicted previous findings that it stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, leading to warnings to cut down.
Numerous studies have recognised the benefits of coffee in cutting oral and esophageal cancer, the risk of a stroke and cirrhosis of the liver.
The benefits are often linked to biologically active compounds including caffeine, flavonoids, lignans, and other polyphenols, which benefit the body. These and othetr coffee compounds regulate genes involved in DNA repair, have anti-inflammatory properties and are associated with lower risk of insulin resistance, which is linked to type-2 diabetes.
But as doctors warn, too much of anything is inadvisable. The British Heart Foundation found the heaviest coffee drinkers in the study were most likely to be men who smoked and drank alcohol regularly.
Excessive amounts of coffee also unsettle the stomach causing or contributing to stomach ulcers. It also stains the teeth over time, hampers absorption of minerals and vitamins like zinc and iron.
It also raises blood pressure, which is largely problematic for people with existing conditions.
So the heaviest drinkers of the black stuff - some in the study had up to 25 cups per day - may want to rein it in.
Rory Reynolds
MANDOOB
Director: Ali Kalthami
Starring: Mohammed Dokhei, Sarah Taibah, Hajar Alshammari
Rating: 4/5
Company Profile
Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government
FIXTURES
Thu Mar 15 – West Indies v Afghanistan, UAE v Scotland
Fri Mar 16 – Ireland v Zimbabwe
Sun Mar 18 – Ireland v Scotland
Mon Mar 19 – West Indies v Zimbabwe
Tue Mar 20 – UAE v Afghanistan
Wed Mar 21 – West Indies v Scotland
Thu Mar 22 – UAE v Zimbabwe
Fri Mar 23 – Ireland v Afghanistan
The top two teams qualify for the World Cup
Classification matches
The top-placed side out of Papua New Guinea, Hong Kong or Nepal will be granted one-day international status. UAE and Scotland have already won ODI status, having qualified for the Super Six.
Thu Mar 15 – Netherlands v Hong Kong, PNG v Nepal
Sat Mar 17 – 7th-8th place playoff, 9th-10th place playoff
EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE
Edinburgh: November 4 (unchanged)
Bahrain: November 15 (from September 15); second daily service from January 1
Kuwait: November 15 (from September 16)
Mumbai: January 1 (from October 27)
Ahmedabad: January 1 (from October 27)
Colombo: January 2 (from January 1)
Muscat: March 1 (from December 1)
Lyon: March 1 (from December 1)
Bologna: March 1 (from December 1)
Source: Emirates
RoboCop: Rogue City
Developer: Teyon
Publisher: Nacon
Console: PlayStation 5, Xbox Series X/S and PC
Rating: 3/5
TWISTERS
Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5
Company Profile
Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
Round by round, the player expands their empire. The more land they have, the more money they can take from their coffers for each go.
As unruled land and soldiers are acquired, players must feed them. When a player comes up against land held by another army, they can choose to battle for supremacy.
A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
Players that lose battles and land will find their coffers dwindle and troops go hungry. The end goal? Global domination of course.
The specs
Engine: 4.0-litre, twin-turbocharged V8
Transmission: nine-speed automatic
Power: 630bhp
Torque: 900Nm
Price: Dh810,000
COMPANY PROFILE
Company name: Klipit
Started: 2022
Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant
Based: Dubai, UAE
Industry: Digital receipts, finance, blockchain
Funding: $4 million
Investors: Privately/self-funded
More from Neighbourhood Watch:
'The Ice Road'
Director: Jonathan Hensleigh
Stars: Liam Neeson, Amber Midthunder, Laurence Fishburne
2/5
Company profile: buybackbazaar.com
Name: buybackbazaar.com
Started: January 2018
Founder(s): Pishu Ganglani and Ricky Husaini
Based: Dubai
Sector: FinTech, micro finance
Initial investment: $1 million
RESULTS
Men – semi-finals
57kg – Tak Chuen Suen (MAC) beat Phuong Xuan Nguyen (VIE) 29-28; Almaz Sarsembekov (KAZ) beat Zakaria Eljamari (UAE) by points 30-27.
67kg – Mohammed Mardi (UAE) beat Huong The Nguyen (VIE) by points 30-27; Narin Wonglakhon (THA) v Mojtaba Taravati Aram (IRI) by points 29-28.
60kg – Yerkanat Ospan (KAZ) beat Amir Hosein Kaviani (IRI) 30-27; Long Doan Nguyen (VIE) beat Ibrahim Bilal (UAE) 29-28
63.5kg – Abil Galiyev (KAZ) beat Truong Cao Phat (VIE) 30-27; Nouredine Samir (UAE) beat Norapat Khundam (THA) RSC round 3.
71kg – Shaker Al Tekreeti (IRQ) beat Fawzi Baltagi (LBN) 30-27; Amine El Moatassime (UAE) beat Man Kongsib (THA) 29-28
81kg – Ilyass Hbibali (UAE) beat Alexandr Tsarikov (KAZ) 29-28; Khaled Tarraf (LBN) beat Mustafa Al Tekreeti (IRQ) 30-27
86kg – Ali Takaloo (IRI) beat Mohammed Al Qahtani (KSA) RSC round 1; Emil Umayev (KAZ) beat Ahmad Bahman (UAE) TKO round
Venom
Director: Ruben Fleischer
Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
'Cheb Khaled'
Artist: Khaled
Label: Believe
Rating: 4/5