Spend or save? Why it's best to do both

Chris Ferguson is managing director of the UAE office of Guardian Wealth Management, a global financial planning and investment company which advises clients on tax and retirement provision, investment plans and inheritance. Originally from the United Kingdom, Mr Ferguson came to Dubai seven years ago.

Describe your financial journey so far.

I wouldn't call my financial journey particularly interesting. I am not involved in short-term trading in derivatives or venture capital. I have always saved a portion of what I have earned and put it away for the long term. With the compounding effect the numbers get bigger over time and this makes things more interesting. But my finances hardly resemble the excitement of a Las Vegas casino floor.

Are you a spender or a saver?

I am both and I enjoy both aspects. I have been in the business of planning people's finances for over a decade now and it's rare to see people with the right balance between spending and saving. Outright spenders tend to spend too much today, having great fun doing it, and never think of major financial milestones in the future. Outright savers seem to save everything for the major milestones but by the time they get there they will not have any lifestyle requirements to fulfil. I believe in saving and believe it should be high on the priority list for an expat as the ability to save should be enhanced by living in a place like the UAE.

What is your philosophy towards money?

I believe money is a by-product of passion. I believe that if anyone commits to a career or life goal that they are passionate about then they will attract money from this naturally. Be focused and goal orientated and I believe the money will come.

Did you make any financial mistakes along the way?

No major mistakes. I have bought at highs before but never sold the assets to realise the losses, so over the long term I'm sure most of what I own will be OK. I am a long-term investor so in the main I do not subscribe to trying to time the market. I believe that time in the market is the way to go and therefore most of my investments are set up in this format. I'm quite positive I could have made more money in more risky ventures with hindsight, but I have opted for a relatively balanced approach and look for compounded returns.

Do you believe in planning for the future?

You should plan most things in life and your financial affairs should be near to the top of the list. Your plans should be reviewed and adjusted as needed but not fiddled with too much. It is also prudent to allow an investment to run its course; too many people panic sell when markets decrease and buy off the back of momentum. This is of course opposite to the old advice of buy low and sell high, but human nature interferes with a natural investment cycle.

Is money important to you?

I would have to say yes, as a lot of my aspirations and goals rely upon money, and this is the case with most people in today's society. Money provides the ability to plan for the important events in life with choice and freedom. I do not prioritise money beyond health and strong relationships with family and friends, but to enjoy the fullest life experience money definitely helps.

What do you enjoy spending money on?

I like to travel; I like property, cars, clothes, et cetera and a lifestyle that requires money. I like such things as having a personal trainer; to some this is looked upon as a luxury but I personally feel I get a lot from this and investing in your own health and wellness is a sound choice in my mind. I like to treat my family and one of the benefits of living in the UAE is that they can visit me here too.

TICKETS

For tickets for the two-day Maharlika Pilipinas Basketball League (MPBL) event, entitled Dubai Invasion 2019, on September 27 and 28 go to www.meraticket.com.

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

The smuggler

Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.

Khouli conviction

Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.

For sale

A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.

- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico

- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000

- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950

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.”

While you're here

Sulaiman Hakemy: It only took 2 days for Biden to create a political mess for Trudeau

Bryant Harris: What Biden did during his first week as President of the United States

Mina Al-Oraibi: Women should be at the heart of the global post-pandemic recovery

Tickets

Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.