Why now is a good time to take stock of your financial health

As you get older, it's good to know the important data metrics about your health. What are your cholesterol levels like? What's your blood pressure? Is your BMI (body mass index) too high?

It's even more crucial to keep track of your health during this health crisis to ensure we don’t have any of the ever expanding list of Covid-19 symptoms.

Finance is no different, so call me Dr Zach today, because I'm going to show you how to give yourself a financial physical. I can't promise it will be painless, but it will help you assess the real state of your finances and offer solutions. Here are the five money metrics you must keep track of:

Your net worth

Your net worth is the most important number you must track. It lets you know if you are doing the right things to achieve your long-term financial goals, and it's pretty simple to calculate. Simply add up the worth of all your assets and then minus your liabilities.

Your emergency fund

This is cash you have set aside in case for an unexpected life event such as job loss, a health problem or your car breaking down. Many experts recommend holding three to six months of your expenses in the fund, depending on how quickly you can get a job and what amount of cash makes you sleep better at night. If you can, deposit it in a high-yield savings account to keep the money safe and earn some interest at the same time. In financially uncertain times like now, it may be better to have a larger emergency fund just in case. Personally, I’m more comfortable having one to three year's of cash stored up. If things get better, I can always invest the difference.

Your savings rate

This is a little harder to figure out. Your savings rate is the amount of money you save as a percentage of your income. Let's say you earn Dh20,000 a month, and you manage to save Dh5,000 of that, then your savings rate is 25 per cent. The higher your savings rate, the quicker you will fill your emergency fund, save for retirement and become financially independent.

The amount of time you spend "at work"

This includes the hours you are actually at work, but it's more than that as well. How long do you spend getting to and from work every day? How long do you need to de-stress from work? How much time at home do you spend thinking about your job? Are you happy with this number? If you're not, how can you fix it? You could live closer to work, find a different job once this crisis is over or meditate. If you want to figure out how much you make, per hour, you need to take this into consideration, or else you're not getting an accurate picture of your hourly wage.

The physical effects of your job

While this isn't a number you can measure, per se, it can help you assess if there is an issue. Are you sedentary, sitting in an office chair all day? Are you working on a construction site and carrying heavy loads all day? Are you constantly stressed out, with elevated cortisol levels that could lead to heart attacks, strokes, and insomnia? Are you letting your job shorten your life? Ask yourself these questions and if you don't like the answers, change something.

Just like someone's physical health can't be summed up in just one statistic, your financial health is a puzzle comprising many pieces. I have listed the key pieces that will help you make better financial decisions. For example, if your savings rate is really low, you can look at ways to cut back on spending or increase your income. If you're spending too much time at work, you need to figure out ways to bring balance there. If you have gradually gained a lot of weight because of a job where you sit for up to 10 hours a day, you need to ask yourself whether your job is worth the effects on your health.

I can't tell you what the right number is for any of these categories. You need to think that through on your own. Everyone has different goals, but until you know all the information, and deal with it in an honest manner, you can't make informed decisions to guide your life to where you want it to be. So, assess your financial health today.

Dubai schoolteacher Zach Holz (@HappiestTeach) documents his journey towards financial independence on his personal finance blog The Happiest Teacher

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”