Money & Me: ‘Distressed situations are the best time to invest’

Rahul Kumar, chief executive of a Dubai-based wedding planning venture, bought undervalued US stocks during the pandemic and was rewarded with good returns

Rahul Kumar, the chief executive of Vivaah Celebrations, says his weakest financial moment was spending all his money on a sports car. Courtesy Rahul Kumar

Rahul Kumar is the chief executive of Vivaah Celebrations, a company that provides wedding planning and management services to couples around the world.

Mr Kumar, 32, was born and raised in Dubai. The Indian citizen acquired a master’s degree in banking and finance from the International University of Missouri in the US, returning to the emirate at the age of 22.

After many years as a banker, he quit to start his own business in 2014. He and his team have since conceptualised and executed weddings in 23 countries.

Mr Kumar, who is single and lives in Jumeirah Village Circle, Dubai, is also a public speaker and occasional university lecturer.

When did you start working and what was your first salary?

After I finished university, I returned to my home city of Dubai and took an investment banking job with an international bank here. At the age of 22, my first salary was about $3,000 a month. Within about three years, I had climbed the organisational ladder to arrive at a salary of $10,000 per month.

What was the earliest lesson you learnt about money?

As a child, I remember spending my entire pocket money without saving any of it. At Diwali one year — I was perhaps seven years old — my sister hosted a gathering with sweets, treats and fun activities, using her savings.

I felt left out and embarrassed as I could not contribute anything to this event. I now set aside a certain percentage each month and use that money to generate wealth.

What was your weakest financial moment?

At one time, I blew up my monthly earnings on every luxury money could buy. In retrospect, I see that these expenses were on things I didn’t need.

I remember when I bought myself a sports car and spent all the money I had. Eventually, I had to borrow money from my sister as I didn’t have enough to pay my rent — embarrassing but also a wake-up call to be more careful with my money.

I now know that all essentials need to be attended to first, then set aside a budget for luxury and, most importantly, allocate a percentage for saving and investments.

What prompted you to set up a company?

I have always been in awe of business owners who run successful conglomerates and how they can steer an army of workers towards achieving a single vision. So, I resigned from my job to explore the world of business.

My family was not very happy as the fear of the unknown prompted them to believe that a well-paid job was the most secure option.

How much money did you start the first company with?

I started my company with an initial investment of Dh80,000, using savings built up from my banking job. This was enough for a trade licence and to find a small office with furniture, fixtures and computer systems.

Why did you think a wedding business was a good idea?

When I started this business nine years ago, there weren’t many professional or established wedding businesses at the top end of the market. I saw this market gap as an opportunity.

The fact that I am Indian but have lived in Dubai all my life offered me an edge.

How did Covid-19 affect your business?

While we did not see a complete shutdown of business, we definitely witnessed a slowdown. The fear factor affected our business in many ways.

Clients were hesitant to plan large events with travel being uncertain, and few were willing to put down or block large sums of money. All of a sudden, the fine print on contracts became even more important as clients looked at clauses concerning cancellations, refunds, Covid-19 and force majeure clauses.

Health and safety protocols required extra caution. Having said that, we are gradually seeing the return of the big fat Indian wedding.

What has been your greatest personal financial challenge so far?

As a business owner, you have to sometimes compromise on your individual needs to keep the company running.

I faced a similar situation where we had a massive drop in new business, but monthly expenses continued. I remember having spent days on only the basic necessities, selling my car and renting a cheaper vehicle, and asking for a rent respite from my landlord to keep the business going until we saw flourishing times again.

Where did you buy your first home?

My first investment in property was a holiday home in Goa, India. I was on a short trip there and fell in love with the place.

It was in the initial years of my career, so I had paid part in cash as a down payment and the rest was a mortgage from an Indian bank. I eventually repaid the whole amount.

How many properties do you own?

I currently own two properties, one residential and one commercial, in Dubai. This is where I live and I am the end user for both properties.

What emotions do you have around money?

In our culture, we believe in the deity of wealth, and I truly believe there comes a time when she bestows her blessings upon you.

Until then, you have to be patient and work passionately. But although I have worked hard to achieve my goals, I know nothing can be taken for granted.

How do you see your career five years from now?

On a five-year horizon, I would like to be leading a larger team with several divisions where each manager takes care of their own vertical.

I would like to take a larger strategic approach to steer the business to even greater heights internationally.

What is your financial moon shot?

I would like to see my company’s valuation reach 15 to 20 times its current revenue. It would be interesting to see the acquisition offers I receive for my brand then.

Are you a spender or a saver?

As I grew older and wiser, I have moved from being a spender to a saver — rather, to being an investor. It makes a lot of sense to put your money to work to accumulate further wealth.

Where and how do you save?

I started with the most basic savings instruments — fixed deposits with banks in the UAE and in India, and then moved to low-risk, low-return schemes with the Life Insurance Corporation of India and other insurance companies.

What asset classes do you invest in?

I am an active investor in US equities and foreign exchange. From the early years of my banking career, I have had a keen interest in how a company’s stock fluctuates based on external and internal factors.

As for foreign exchange, I mostly invest in cable or EUR/USD as I have been following these pairs for years now.

What is your most cherished purchase?

A recent big-ticket purchase is my office in Business Bay in Dubai, which I bought in May 2021. I cherish it for its beautiful views, its location and because I bought it at a great price.

What has been your best investment?

For investments, I dabble in long-term and short-term investments. While long-term investments may deliver handsome returns over time, short-term investments are more easily quantifiable.

The best recent investment I made was purchasing stock of Disney and GNC. I studied the fundamentals of both companies and bought them when the market hit rock bottom.

What has been your worst investment? What did you learn from it?

My worst investment was in oil during the pandemic. I invested in numerous oil lot sizes on leverage through an online trading platform.

Commodities were an asset class I had never tried before and because the opportunity looked lucrative, I experimented with a large sum of money. Within days, my investment was wiped out as the markets went in the opposite direction to what I had anticipated.

I learnt not to invest unless you have studied the asset class properly or have extensive experience with it. Opportunities that appear enticing require due diligence.

How did the coronavirus affect your investments?

Distressed situations are the best times to invest. The pandemic, when the world markets were in turmoil and equities were in meltdown, provided interesting investment opportunities.

Stocks of large companies, especially US equities, were undervalued and it was a good time to buy — so I did. It calls for a measure of risk but that is where the returns are — provided you understand the fundamentals of a company and track the stock.

I liquidated my positions and took my profits within about eight to 10 months. I was very happy with the returns.

What is your approach to a pension plan?

I haven’t explored this yet. In principle, I understand the worth and value of saving early and systematically to have a consistent standard of living after retirement.

How much do you have in your wallet right now?

I have about Dh1,000 in my wallet at all times. I use my credit cards a lot for their benefits but ensure that I pay my bills in full before the due date to avoid any finance charges or credit fees.

What car do you drive?

Mercedes S 550 AMG