Money & Me: 'I invested my student loans into property development and made a 150 per cent return'

Kimberley Stokes, 35, is the co-founder and managing partner of Urban Yoga, which opened its first branch in Business Bay in 2013. A Canadian and former management consultant, she has lived in Dubai for seven years with her husband, a Canadian management consultant she met when they were both studying for an MBA at Insead. They live in DIFC and have a one-year-old daughter, Isla.

How did your upbringing shape your attitude towards money?

My parents, who are British, moved to Canada for an adventure just before I was born and taught me early about the value of money. I had a C$2-a-week (Dh6) and a little book where I had to keep track of all expenses; my sister and I did not get our allowance if we didn't. I still have it and, every now and then, I pull it out to chuckle at expense entries like "C$0.25 Sour Candies". I learned that I needed to earn my own money - and that when it ran out, it ran out. A lesson better learned by not being able to buy candies aged 10 rather than being unable to afford rent or groceries at 20.

How much did you get paid for your first job? 

My father worked in risk management for department stores and lost his job when I was a teenager, as his store went out of business. With bigger stores nationalising operations, his opportunities shrunk and mum went back to teaching. They were struggling when I was a teenager and there were no more allowances. I started babysitting for C$4 an hour when I was 12 or 13, then cleaning out horse stables at 14 for C$7 an hour. It was hard work, horrendous in the winter, and I made the decision to get jobs inside - as a grocery store cashier, a sales associate at a department store, a hostess at a restaurant. All were minimum wage jobs still, but less physically demanding.

Are you a spender or saver?

I have nothing against spending money, but I do tend to save first and spend the ‘extra’ when I’m lucky enough to have it. Over the years, I’ve accumulated too much stuff anyway; I’m starting to become more minimalist as I get older. I would rather spend on experiences than things.

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What is your most cherished purchase?

My home - a big three-bedroom apartment in Dubai International Financial Centre (DIFC). My husband, who has lived here 30 years, had already bought a smaller apartment in Downtown Dubai off-plan before we met, but we upsized in 2015 when I got pregnant, going from 850 square feet to 3,000. There is an emotional value to living in the apartment, rather than treating it as an investment or renting it out; it is a place for us to build a home and family. Feeling at home in your own home is a massive luxury, and it feels likes an oasis for our family. There is added satisfaction in knowing this space belongs to you and no one is about to turf you out because they want to raise the rent.

Where do you save? 

Contrary to what I would recommend people do, all our cash in the bank is in the UAE; I have had accounts in Canada and the UK, but also had them frozen due to not being resident, so I have reservations about moving money to other countries. We have a mutual fund, into which we save a fixed amount each month for our retirement, but nothing else is budgeted as a lot of our income comes in the form of bonuses. We live a sustainable life off our salaries and then bonuses are ‘play’ money. When we have that cash, we self-invest into index funds in Canada. Both my husband and I are entrepreneurial so we also invest in small businesses - four right now, all angel investments in people we know and trust. They’re not big amounts, but these are still risky investments.

How did you fund Urban Yoga?

I took a pot of money when I left my career as a management consultant and used that when I started Urban Yoga with my partner. I was a bit burnt out, after six years doing 80-hour weeks with lots of travel, and wanted more flexibility. I am a 50 per cent owner in Urban Yoga but, in the original phase, my partner put in more money and I put in more time as my ‘equity’. We don’t have or want outside investors.

What has been your best financial investment?

When I was at university I got student loans but I was working part-time so, after the first year, found I hadn’t spent any of the C$10,000 loan. I invested it into property developments run by an old colleague of my father’s and, about 20 months later, got a 150 per cent return, so C$15,000 back. Over six years at university I kept on getting the interest-free loans and probably invested C$40,000 in property - the least I earned was 10 per cent. It was very forward-looking for a 20-year-old.

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What do you most regret spending money on it?

Last year we invested in a colleague’s business - an app. It went to development stage but, after a bunch of testing, he decided it wasn’t worth continuing. We got back about half of our US$20,000. But we invest in people, not random projects, and knew investing in an idea might not work out. You’ve got to know that when you’re investing. So I honestly don’t have regrets. You win some and lose some. You have to be sure that you can survive if you lose it and never put your livelihood on the line.

What financial advice would you offer your younger self?

I started investing at 20 but I wish I had started saving for retirement in my teens. I always remember a retirement advertising campaign in Canada that showed you what you would have at retirement if you invested from the age of 15, 25 or 35. I guess I never felt I had enough money to do that, especially as I had to work just for some spending money with my parents’ situation. And perhaps I wouldn’t have been taken seriously, walking into a bank at 14 and asking to open a mutual fund!

Do you have a financial plan for the future?

I would say I have a strategy and a philosophy but not a plan. I like to put money into my home and I have a portion of ‘play’ investment to put into riskier and more fun ventures. But as it depends on jobs and bonuses, it’s hard to plan. I have, at times, paid myself a salary from Urban Yoga but, after having my daughter, we had to hire in more team members to do the day-to-day management. I didn’t do Urban Yoga for money but for love and the passion of building a business in a field I care about. Now we have two part-time managers rather than one manager, who do administration and also teach yoga.

What about you planning for your daughter's future?

Having one child in nursery here costs more than my university did. We haven’t got a saving plan for the hundreds of thousands of dirhams you might need. I’m a planner, so would like a plan in place… we’re on the edge of it.

If you won Dh1 million, what would you do with it? 

I would splurge on fun things with Dh50,000 - maybe a nice holiday and some bigger purchases. Then, I’d use the rest ‘sensibly’, maybe saving about Dh500,000 in a relatively safe way, investing Dh250,000 in a slightly riskier way, then putting the rest aside for a rainy day or future opportunity.

What would you raid your savings account for? 

Ideally nothing. Health emergencies or when a savings goal had been achieved, say for a house or a car or my retirement. Otherwise, savings are savings and shouldn’t be spontaneously raided.