Wealth Management UAE: What is really worth saving for?

Is it family? Education? Dreams? Experiences? Retirement?

Saving means different things to different people. To some, it means putting money in the bank. To others, it means buying stocks or contributing to a pension plan. However, saving means one thing – using less of what you have now in order to use more in the future. Saving is all about discipline and spending less than you earn. It also means adjusting our lifestyles so that we can accommodate part of our income into a savings scheme which is essential in wealth management UAE. What are your reasons for doing this? Feel free to leave your reasons in the comments section below. 

Living in Dubai, UAE, a state where we don't pay income tax spending that extra well deserved few bucks is very, very easy. We have so much in offer with many shopping malls one of which is the "Biggest Mall in the World" and the new 'Biggest, Biggest Mall in the World' only months away. We are also currently in the last week of Ramadan - the Holy month - with extra special promotions on items we don't always need but o my we want. With Eid around the corner it is an ideal time to be reminded on savings or more precise what is really worth saving for.

Why is it important for us to save?

No matter who you are, saving some money every month, saving your bonus, saving your cash gifts is important to stay out of financial trouble and contribute to your financial freedom. For some of us, saving simply make it possible to buy the things in the future after inflation pushed the prices up. But it is especially important to save for your old age or your “financial freedom” as I like to call it.

Saving can make a lot of things possible, e.g.:

• paying for your child’s education     
• getting your own house, your second house 
• buying a car, a yacht or an aeroplane         
• starting a small business, etc.     

Example:  Buying a lounge suite: Scenario 1: Saving for a year and buying it for the Cash Price of $6 499.95. Scenario 2: Buying it on terms/ Hire Purchase over 36 months $315 X 36 = $11 340 (interest rate of 11% p/a)

What are the different saving terms?

1. Short-term saving – means saving for a few months to a year to buy the things we want soon, e.g. buying a lounge suite. 2. Medium-term saving – means saving for the time in between 3 to 5 years for things we would like in the years ahead, e.g. paying for the education of our children.
2. Long-term saving – means saving for a long time in between 5 to 20 years or longer to prepare for the future.

What are the different ways to save?

 The bank method

This is a very safe way of saving your money and increase your wealth management UAE plan. Banks have rules which protect you and your money from being stolen. Banks also have a duty to help us with information. You have the right to ask wealth manager to explain what services it can offer you, including those offered by other financial institutions.

What are the main services offered by banks?

In the main, banks provide us with the following services:

• they get deposits (savings) from us, • they do transactions for us, and • they lend us money.

Investments

There are many types of investments which build up capital or provide a monthly income when you retire. Such investments include retirement funds,bonds, shares, long-term insurance and fixed property. Whenever you are ready to plan your investment strategy, one of your first stops may well be your bank. Bank personnel are professionally trained to provide good advice on different forms of investments. They will also be able to refer you to a reliable insurance broker, if you do not yet have one.

Investment Tips: 

• Don’t invest with just anybody. Choose a regulated independent wealth management company before you make an investment.
• Check the reputation of the intermediary with the firm and the Financial Services Board and interview some of the broker’s existing clients to determine his/her reputation.
• Make sure the broker and the company are registered with the Financial Services Board.
• Make sure the independent financial consultant shop around for the best returns before investing your money.
• Do not sign any blank or partially completed application forms – Don’t be pressurised to sign!
• Avoid cashing in a retirement fund if you change your job – but if you do, transfer the money to a preservation fund.