According to a survey by Payfort, only 25% of the people in the UAE save 10-25% of their income.
1. Save first, spend later
The most common mistake people make is investing from the money that is left after expenses. This way, you’ll never end up saving enough. Decide a percentage of your income that is to be invested and do that at the beginning of each month.
2. Invest wisely, don’t put all your eggs in the same basket
For less than Dh 100, you can invest in promising companies in the UAE. Create a balanced portfolio of around five companies from different sectors like automobile, banking, etc. You can also invest in gold, real estate, mutual funds, emerging companies, and ETFs. Remember, diversification is the key.
3. Start young
Don’t wait until you are in your 40s or 50s to suddenly begin retirement planning. Start in your early or late 20s and never stop. The more time you have, the more risk you can take, and higher are the chances of hefty returns.
4. Set a goal & do the math
Know what you want. You can set a numeric goal for your retirement corpus. Then decide how much you need to invest and save each month to reach that goal. Don’t forget to take into account an average rate of interest.
5. Take financial advice
Financial planners in the UAE can help you choose what is best for you and help you achieve the dream of a wealthy retirement. This can also make you aware of different opportunities for investment.
6. Be aware, seek information
Taking financial advice is good, but don’t be dependent on anyone. Knowledge has always been power. Be informed about your portfolio and new avenues that might open over a period of time. Know the risks.
7. Remain real
Don’t have unrealistic expectations when investing. Don’t ever underestimate the rate of interest. Take into account certain financial contingencies like a global slowdown, etc. Also, don’t invest in complex options you don’t understand like forex or futures. Be careful with bonds.
8. EMOTIONS AREN’T WHAT YOU NEED
Think practically. As you age, all or most of your biggest expenses are going to be health-related. Do you have enough to provide for that? Don’t give in to emotions when you decide to invest instead of spending on a lavish holiday. Sometimes it is okay to indulge, but don’t let your emotions get in the way when you make investment decisions. Rely on data.