Take Advantage of Compound Interest for Best Saving Results
If you are an expat in the UAE you can easily double your savings pot if you’re wise with investments and start early. New research from Guardian Wealth Management (GWM) shows how regular savings and compound interest can make your saving pot something special.
The example cited by Hamzah Shalchi, regional manager of GWM cites a UAE expat saving Dh,5000 per month. Each year compound interest works its magic and builds up the savings pot.
Speaking to Gulf News, Shalchi said:
“Seven years is the average amount of time an international worker stays in the Middle East and is plenty of time to convert hard-earned savings into potential millions.
“If a 30-year-old saver was to save Dh5,000 a month for seven years at 5 per cent interest, but left the pot to mature at 6 per cent interest until the age of 50, he/she would have earned Dh1,000,000. Therefore, it is clear to see the benefits of saving earlier but for less time using the power of compound interest.
“The idea is to invest a decent amount of savings every month for seven years and then do not touch it for [another] 13 years so that it accumulates interest, which eventually grows the savings pot into Dh1 million.”
Although this is a long term solution, twenty years tends to fly by, and you will have a nice savings lump sum at the end of it. This can be used for children’s university education, a fantastic holiday, retirement funds, etc.
As well as starting early and committing to regular savings, to get this kind of return you need a best in class investment strategy.
“This means spreading out savings across a portfolio of equities, bonds, property, commodities, foreign exchange, alternative investments and cash.” Added Mr Shalchi.
Award winning Financial Planning
The third factor is to ensure you have a good financial planner at the helm of your investments, guiding them to profitability. Although you can undertake this yourself, Mr Shalchi underlines why this is a bad idea.
“If you don’t know what you’re looking for, it’s a case of where do you start? You wouldn’t fly a Boeing 777 without correct training so why would you invest your money into something without the correct training?
“Essentially, the risks are higher doing it yourself and although people are put off with the initial outlay of a financial advisor, it is nothing compared to the potential loss of a bad investment. The point of an expert is to get to know you and advise what is right for you.”
My award winning financial planning will guide your savings to give you a highly profitable future. All the savings are scalable. So providing you save a regular amount for seven years in the long term you’ll have options.
Source: Gulf News