Pavel Strandh, a Swedish management consultant, and his partner Stefanie Alecrim, a Brazilian legal counsel, moved to the UAE last year from Sweden where they were paying more than 50 per cent of their income in taxes.
Moving to the UAE has cut their taxes significantly and has allowed the couple to work on a five-year plan to achieve financial freedom. They earn income from their day jobs and through side hustles. “We plan to become financially independent by 2030,” says Mr Strandh, 27.
The couple, who live in Business Bay, Dubai, save and invest their money together. Discussing financial goals is a daily topic, according to Ms Alecrim, 25, who has a bachelor’s degree in law from Brazil and a master’s degree in international arbitration from Stockholm University.
Mr Strandh has a business degree from the Stockholm School of Economics and a double master's degree in international business from the business school and the National University of Singapore.
What was your first job and salary?
Stefanie: My first job was as an intern and paralegal at a law firm in Brazil four years ago, where I was paid 1,200 Brazilian reais ($207.80), a little more than the minimum salary. In Dubai, my first job was as a paralegal in a local legal consultancy where I earned Dh8,000 ($2,178) per month.
Pavel: My first full-time job after university was in the military. I spent a year being educated about it and was paid about $1,200 equalent in Swedish kronas per month.
What is your salary now and do you manage to save?
Pavel: I work as a management consultant at a global management consulting company, and earn about Dh20,000 ($5,445) per month in Dubai.
Stefanie: I work as an associate at a legal consultancy where I earn around Dh20,000 per month.
Pavel: We don't just manage to save, we highly prioritise it. We don't focus on only saving either, we focus on investing.
What asset classes do you invest in?
Pavel: Our portfolio is more than 90 per cent in low-cost index funds, and the remaining comprises some stock picking, a couple of cryptocurrencies, and gold.
Stefanie and I come from humble backgrounds. My relationship with investments early on was non-existent and even negative, because my parents were born and raised in the former Soviet Union and were sceptical about everything that had to do with financial systems, banks and investments in general.
But as I was pursuing my higher education, it became increasingly evident to me that there are benefits to a disciplined approach to investing. As I graduated and started making my own money, I became painfully aware of inflation and of the possibility of having to work for the rest of my life to sustain myself. I realised that I needed to take responsibility for my retirement savings, rather than relying on the government or my employer.
Where we invest depends on the market conditions at that particular time. When there is no clear opportunity, our money just goes into low-cost index funds. Even when there seems to be an opportunity – we consider emerging markets, the US and crypto – the priority is always to be heavily invested in low-cost index funds on a global scale.
Growing up, were you taught how to handle your finances?
Pavel: I was taught to save money and spend frugally. I was taught the balance between living frugally and living my life, so that I did not deny myself things that I needed. I was never taught to invest. This is something I learnt myself.
Stefanie: On the contrary, I was taught to spend money because my mom believed I was too frugal.
I was always aware about money. When I got my first job in Brazil, I had an Excel sheet of all my expenses. I would also save, but didn’t know where to invest. My parents didn't have the income to think about investing. Pavel made me aware of the need to start investing. He also teaches his parents how to invest.
Now, we complement each other in managing finances. While Pavel is aware of the big picture, I manage the expenses and source the best deals. We combine our finances and save and invest 60 per cent of our collective monthly salaries.
Have you purchased property here or in your home country?
Pavel: No. We researched buying an apartment in Dubai. However, the analysis revealed that the market fundamentals are not correct and prices have been inflated, especially over the last couple of years. It didn't seem like something we wanted to do, considering that we've only been here for a year.
Do you have any debt?
Pavel: Yes, I have a student loan that I acquired while studying in Sweden, where education is free. The government gives students low-interest-rate loans to pay for living expenses. Since I was living with my parents, I was able to save the loan and invest it in a high-interest savings account. As it grows, it works as our emergency fund, so that we can dedicate the remaining money into more long-term and riskier investments like the stock market and crypto.
Stefanie: We have credit cards, but we take advantage of them for cashback schemes.
What are your major monthly expenses?
Pavel: House rent, utilities, groceries, food and transportation.
How do you budget your salary every month?
Pavel: We don't budget. We live within our means and to some extent even below our means. We're disciplined when we spend and ask ourselves each time if this is something we need. We never spend blindly.
I don't like to go out for expensive lunches, coffees or sweet treats. I avoid these because I'm aware of their compound effect. Many years down the line, I could do a lot more fun things with this money.
Our hobbies are not expensive. We like gaming, so we have two sets of Xboxes at home with a monthly subscription for games. Also, instead of paying money to exercise in a gym, we started a side hustle of organising desert floorball training sessions in Dubai. We have achieved break even, work out for free and keep our entrepreneurial mindset alive.
Stefanie: I follow the same mindset and we keep each other accountable. We don't go out for lunch or brunch every weekend. We don't drink, smoke or vape. But we don't restrict ourselves if we want to do something fun.
What do you spend your disposable income on?
Pavel: We travel once a year and also treat ourselves to different food spots in Dubai once a month. There's no time to spend money, we are too busy trying to find ways to earn money. We work on our side hustles and my YouTube channel.
We previously ran a Web3 start-up consulting company in business, and legal for Web3 projects. I also sit on an NGO board in Sweden. Stefanie has private clients that work in litigation in Brazil.
Do you worry about money?
Pavel: No. We believe that our spending habits are optimised to an appropriate degree, and we're not living pay cheque to pay cheque. We have a good base if something bad would happen. With that freedom of mind, we're able to think more long term.
What are your financial goals?
Pavel: On New Year’s Eve last year, we set a short-term goal to reach about $200,000 in net worth this year. In five years, we see ourselves reaching a combined portfolio of $1 million.
management consultant
What are your best money-saving hacks to offset inflation?
Pavel: If you want to move away from inflation, you either go to a deflationary asset such as Bitcoin, for example, or some other crypto alternatives, but low-cost index funds return you 10 per cent, well above inflation at current rates.
Even money market funds and Treasury bills currently provide returns above inflation.
Do you have an emergency fund?
Pavel: Our emergency fund right now is larger than we would like it to be. It's at around 25 per cent to 30 per cent of our investment portfolio because we're sceptical about a market correction. That money is lying in a high-interest savings account. As soon as there is a correction, these funds will be allocated appropriately.
What is your idea of financial freedom?
Stefanie: I’d like to work on things that interest me and at a time that’s convenient to me. My idea of financial freedom is to be able to wake up in the morning and choose what I want to do from a low-cost country where we have a house by the beach.
Pavel: I’d like to do things that are more aligned with my personal interests. I’d like to continue working as a consultant, but not have to worry about covering my costs since that will be paid for with my passive income.
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