The road to financial freedom is a journey of a thousand steps. Fortunately, the path is well-trodden by millions of investors who have already achieved financial independence.
From their experience, we can extract the key learnings and metrics you will need as you continue your financial journey.
This journey is a marathon, not a sprint. It will require patience, discipline, optimism and regular reflection on where you are in the process.
It is this practice of measuring your progress that we want to reflect on today, so that you can avoid the fate of too many unsuccessful investors: discovering an unpleasant truth when it’s too late to correct course.
The road to failure
While successful investors have many common traits that we can learn from, so do those who were unsuccessful in their quest.
Common mistakes of those who fail are insufficient contributions, incorrect investment portfolio decisions, acting on emotion and inadequate protection.
However, perhaps the trait that leads to all the mentioned mistakes is the failure to take regular stock of their reality, preventing them from making changes that could rescue their situation.
Like flying, financial planning is not a perfect science. The assumptions we make about the future are sure to be incorrect, but they are useful all the same.
This requires us to be flexible, adaptive and aware of our progress.
Like flying, a successful investing journey requires constant course corrections to arrive at the correct destination.
The key numbers
To make the right changes, you need to track the correct numbers. As management expert Peter Drucker once said: “What gets measured, gets managed.”
Below are the metrics we recommend you keep track of. By understanding how these numbers interact, we are confident that you, too, can reach financial freedom.
Your wealth window: Quite simply, how many months until you hit your financial independence. This is when working becomes optional for you.
Knowing this number in months rather than years makes it feel more motivating for most people.
For example, if you are 52 and want to retire at 62, you have 120 months left in your wealth creation window.
Your saving percentage: What percentage of your take-home pay are you investing for the future? The more you can put away, the faster you can retire.
Additionally, by putting away more, you learn to live on less. Successful investors routinely save more than 20 per cent of their income.
Your percentage of investments in global equities: Aka owning shares in the great companies of the world.
Using history as our guide, equities provide the best long-term returns. Ideally, you want to continually move closer to a 100 per cent allocation to equities, but the more, the better.
Your retirement income needs: How much monthly income will you require in retirement to live comfortably? This will depend on your lifestyle and aspirations.
Your retirement income shortfall: Simply, the difference between what you will need and what your current expected retirement income is, possibly from a state pension or rental income.
This is the number that your investment portfolio will need to provide.
Percentage of your income that is protected: This is what disability and life insurance is for. We all think we are invincible, but this is a serious topic. Too many people insure their phones, but not their income.
Review and calibrate
From experience, we know that the more you know about your finances, the faster you can progress towards financial freedom.
We encourage you to develop a system for keeping track of your progress across the areas outlined above.
Above all, knowing the truth about your situation gives you greater agency over the course of your future.
Some people let life happen to them, and some shape their future to their desires. We encourage you to aspire to the latter.
Sam Instone is co-chief executive of wealth management company AES
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Coming soon
Torno Subito by Massimo Bottura
When the W Dubai – The Palm hotel opens at the end of this year, one of the highlights will be Massimo Bottura’s new restaurant, Torno Subito, which promises “to take guests on a journey back to 1960s Italy”. It is the three Michelinstarred chef’s first venture in Dubai and should be every bit as ambitious as you would expect from the man whose restaurant in Italy, Osteria Francescana, was crowned number one in this year’s list of the World’s 50 Best Restaurants.
Akira Back Dubai
Another exciting opening at the W Dubai – The Palm hotel is South Korean chef Akira Back’s new restaurant, which will continue to showcase some of the finest Asian food in the world. Back, whose Seoul restaurant, Dosa, won a Michelin star last year, describes his menu as, “an innovative Japanese cuisine prepared with a Korean accent”.
Dinner by Heston Blumenthal
The highly experimental chef, whose dishes are as much about spectacle as taste, opens his first restaurant in Dubai next year. Housed at The Royal Atlantis Resort & Residences, Dinner by Heston Blumenthal will feature contemporary twists on recipes that date back to the 1300s, including goats’ milk cheesecake. Always remember with a Blumenthal dish: nothing is quite as it seems.
RESULTS
2.30pm Jaguar I-Pace – Conditions (PA) Dh80,000 (Dirt)
1,600m
Winner Namrood, Antonio Fresu (jockey), Musabah Al Muhairi
(trainer)
3.05pm Land Rover Defender – Maiden (TB) Dh82,500 (D)
1,400m
Winner Shadzadi, Tadhg O’Shea, Bhupat Seemar
3.40pm Jaguar F-Type – Maiden (TB) Dh82,500 (Turf) 1,600m
Winner Tahdeed, Fernando Jara, Nicholas Bachalard
4.15pm New Range Rover – Handicap (TB) Dh87,500 (D) 1,400m
Winner Shanty Star, Richard Mullen, Rashed Bouresly
4.50pm Land Rover – Handicap (TB) Dh95,000 (T) 2,400m
Winner Autumn Pride, Bernardo Pinheiro, Helal Al Alawi
5.25pm Al Tayer Motor – Handicap (TB) Dh95,000 T) 1,000m
Winner Dahawi, Antonio Fresu, Musabah Al Muhairi
6pm Jaguar F-Pace SVR – Handicap (TB) Dh87,500 (D) 1,600m
Winner Scabbard, Sam Hitchcock, Doug Watson
Brief scoreline:
Manchester United 1
Mata 11'
Chelsea 1
Alonso 43'
More from Neighbourhood Watch:
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
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Company%20profile%20
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MATCH INFO
Real Madrid 2
Vinicius Junior (71') Mariano (90 2')
Barcelona 0
COMPANY%20PROFILE
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Killing of Qassem Suleimani
COMPANY%20PROFILE
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SPEC SHEET
Display: 10.9" Liquid Retina IPS, 2360 x 1640, 264ppi, wide colour, True Tone, Apple Pencil support
Chip: Apple M1, 8-core CPU, 8-core GPU, 16-core Neural Engine
Memory: 64/256GB storage; 8GB RAM
Main camera: 12MP wide, f/1.8, Smart HDR
Video: 4K @ 25/25/30/60fps, full HD @ 25/30/60fps, slo-mo @ 120/240fps
Front camera: 12MP ultra-wide, f/2.4, Smart HDR, Centre Stage; full HD @ 25/30/60fps
Audio: Stereo speakers
Biometrics: Touch ID
I/O: USB-C, smart connector (for folio/keyboard)
Battery: Up to 10 hours on Wi-Fi; up to 9 hours on cellular
Finish: Space grey, starlight, pink, purple, blue
Price: Wi-Fi – Dh2,499 (64GB) / Dh3,099 (256GB); cellular – Dh3,099 (64GB) / Dh3,699 (256GB)
SUCCESSION%20SEASON%204%20EPISODE%201
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Race results:
1. Thani Al Qemzi (UAE) Team Abu Dhabi: 46.44 min
2. Peter Morin (FRA) CTIC F1 Shenzhen China Team: 0.91sec
3. Sami Selio (FIN) Mad-Croc Baba Racing Team: 31.43sec
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
UAE currency: the story behind the money in your pockets
'The worst thing you can eat'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
