When it comes to meeting your financial goals, doing something is always better than doing nothing. However, even though expats typically earn more, 85% of expats don’t save on a regular basis.
It’s that time when many of us look at our lives through the prism of the excesses of the festive period, and resolve to do better this year! Resolutions about your health or goals can be energizing, though also often short-lived. I’d like to recommend a resolution for your financial health that you can easily keep up with: start “smart saving”. And as with any new health program, it’s best to start off small.
One of the biggest excuses by expats for not saving or investing is, ‘I don’t have enough money’. But if Granny could save a fiver a week in the kitchen drawer, so can you. Saving a small percentage of your monthly income is just a matter of prioritising your expenditure.
We in the UAE have plenty of ways to save without resorting to austerity. Take a packed lunch to work, or skip straight to the “after brunch”!
Set yourself a percentage or fixed sum to put aside each month, and sit back and watch your savings grow as an expat over time. Now, a simple savings account is too conservative. For long term financial goals, where you can afford to absorb the inevitable market volatility and not be forced to withdraw funds during a downturn, even with your small monthly sum, investing really is the “smart saving” choice for most people, and not just expats.
Compound Interest
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
There’s an urban legend that Albert Einstein once said compounding interest is the most powerful force in the universe. Whether or not he did, these are wise words.
In relation to a smart saving plan, a modest saving of 200GBP a month over 20 years amounts to 48,000GBP. If it’s compounding at 6% p.a. you would end up with 101,000GBP. That’s a smart way to make the most of your money. The longer compounding interest has to work its magic, the larger your investment will grow. But one thing is clear: you’ve got to start, and the earlier, the better.
Finding the best products and plans, and picking individual funds can seem daunting and overly time consuming. Ask our advisors for help! Let a professional guide you through the process, and take advantage of our market knowledge of the best performing and emerging funds.
Get in touch with us today to ensure you meet your goals this year.
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