Friday 31 March 2023

Save for 7 years, become a millionaire

DUBAI, November 15, 2018

The average expat will spend just seven years in the Gulf. While this might not seem very long, with financial discipline, committed saving plans and smart investment products it is enough time to realise their dreams of becoming a millionaire, says a financial expert.
By investing a portion of their salary for 84 pay days, seven years, and then leaving the money to grow for a set period of time, expats can secure theirs and their family’s long-term financial future and make themselves a million, whether it be in dirhams, dollars or pounds.
“Seven years is plenty of time to convert hard-earned savings into potential millions,” said Hamzah Shalchi, regional director of leading financial planning firm Guardian Wealth Management.
“Far too many people move to the UAE with the intention of making the most of their higher earnings and building up a solid savings but end up doing the opposite. It is therefore of the utmost importance that expats take full advantage of the opportunities that are available to them to build a solid financial future.”
The key to reaching a million in savings and hopefully achieving financial independence is compound interest – the concept of saving for less time but earning higher amounts thanks to a build-up of interest as a result of choosing products that understand the benefit of considered risk. As the great Albert Einstein once said, compound interest is the eighth wonder of the world. He who understands it, earns it, he who doesn't, pays it.
The idea of allowing your savings pots to earn interest, which in turn earns interest, is key to getting the most out of your money and can be a serious savings-booster for expats if used correctly. 
An example of the benefits of saving earlier but for less time using compound interest can be seen below:
• By saving for Dh5,000 a month for seven years, and leaving the money to grow over 13 years with an average growth rate of 5% per annum, one can ultimately make a million. 
• A 40-year-old UAE expat who starts saving Dh5,000 a month for 20 years at an interest rate of 5% would have Dh2,000,000 in savings by the time they reach 60. 
• A 30-year-old who saves Dh5,000 a month for 10 years at 5% interest, but then leaves their savings to mature at 5% interest until the age of 60 would have earned Dh2,100,000. 
“Compound interest is a smart way for expats to put money away before reaping the rewards later in life,” said Hamzah. “We have experts at Guardian Wealth Management who specialise in getting customers the best savings products so that they ultimately become millionaires.”
Guardian Wealth Management, one of the world’s leading providers in lifestyle financial planning, has offices in Dubai and Abu Dhabi. - TradeArabia News Service

Tags: Gulf | Financial | millionaire |

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