Money & Me: ‘We try to save 50% of our income’

Nico Ariza Bagoud arrived in Dubai at the beginning of this year as GCC general manager of Kavak, a used car sales platform from Mexico.

Inspired by his entrepreneur father, the French-Colombian has spent 13 years working in e-commerce, including for Latin American online marketplace Linio.com.

Now aged 35 and living with his wife and their two young children in Dubai Marina, Mr Bagoud previously created a Spanish start-up that provided order fulfilment and was part of a do-it-yourself conglomerate.

He also teaches students about e-commerce and retail as part of a master’s course at a business school in Paris.

Did you have early exposure to money?

I grew up in Colombia. We had everything we needed in a country that is not necessarily rich. Colombia was not the safest place when I was a child, but my memories growing up with my brothers were amazing.

We travelled every summer to France to my mother’s family and, at 16, I moved there ahead of university.

My father, an entrepreneur, had a business in the book sector and my mother helped him. But around 2000, he got a cancer, lost a lot of income and his house. One of the main reasons we moved to France was because it was easier for my grandfather to help us.

How did this shape your outlook?

My father was the kind of person who worked to live, knew that he wanted to earn and make money, but he did not have that savings gene.

My grandfather was also an entrepreneur, but different. He was frugal, spent very little on non-essentials, but education, discipline and hard work were paramount.

It marked me significantly in how I have approached my entire career. And I saved a significant amount.

So it influenced your handling of money?

More than just dealing with it, but what I prioritise in my life. Once money disappears, you need to have caution, so I am risk-averse.

We try to save 30 per cent to 50 per cent of what we earn, but we live comfortably and have everything we need. I invest mostly in real estate, index funds and a savings account, so we have a six to 12-month runway in case anything happens.

I tried to build my own portfolio and play around with stocks, but for 10 years I have mostly put a fixed amount every month into exchange-traded funds.

How did you first earn?

My grandfather funded university in France, but during summers we were on our own. I speak four languages and wanted to do something with that to bring me money and allow me to travel.

I was a waiter in a five-star hotel above a Barcelona casino. Basic salary was less than €1,000 ($1,052), but I could make two or three times that in tips. Some customers would give chips; the biggest I got was €500 ($525).

I then started in investment banking but hated that life. I moved into building companies, not necessarily my own start-ups with my money at that point, but I had equity.

In the past 12 years, I have been lucky enough to have two exits, not massive amounts, but enough of a good return on investment on years spent in those companies for down payments on two houses in Spain.

Why relocate to Dubai?

I knew the guys that started Kavak. It became a unicorn. They wanted to expand outside of Latin America, especially in emerging markets, and knocked on my door.

We acquired companies here and in Turkey, very different markets but for used cars, similar problems. The first is transparency and trust in the quality of cars. On the other side, you have complications around buying or selling, the paperwork, access to finance, the right warranties and insurance.

The online experience gets you so far. Our Dubai Festival Plaza centre has changed the offline experience; it’s like a Disney store for buying a car, almost 500 in the lot, and an amazing point of conversion.

Is it for all budgets?

We have cars less than Dh50,000 in value, going up to Dh400,000. We do not have preferences for specific types or brands; we have had Jaguars and Maseratis, Suzuki Swifts and Kia Picantos.

We find people who want to sell their car, get it inspected and if the car matches our portfolio groups, we buy and recondition it.

Are you a saver or a spender?

A bit of a balance. Half of what we earned we managed to save, for the past 10 years. This allowed us to travel for around nine months.

With kids, we cannot save everything that we want, but we want them to go to a good nursery and have an apartment where we feel comfortable. We have everything we need and are not short at the end of the month.

I am always pushing to save, but I am not obsessed with just saving. If you want a nice experience in a hotel or restaurant, or to take the children somewhere pricey, we can afford it.

I spend a lot of hours at work. My wife also has a strong career, with Google, but living for work is not what we want to do.

What are your best investments?

The first place we bought, an apartment in Madrid, in 2018. The mortgage interest rate was low, the price amazing and today, we are renting for a good profit. That pushed us to make a second investment in Valencia.

More personally, when we went travelling and discovered plenty of countries we did not know.

How do you feel about money?

Money enables. It can get the best or worst out of people; if you are a snob, money will make you a worse snob. If you are a person who is curious, likes travelling, money will fulfil that. If you are a giver, it enables you to give to people around you.

So for me, it is not necessarily money is good or bad, it just enables you to be the person you want to be. It is not a purpose in itself.

Are you sensible with it?

I have saved enough today, at 35, that I think I am above average for a person the same age. I don’t spend where I don’t need to. But sometimes my wife would disagree with the type of gadgets and tech I love to buy.

I will spend on the latest cell phone or laptop, but not on luxury clothing or jewellery. I have had a Casio watch for 15 years that I bought for $15.

What car do you drive?

An Audi Q5 2019 Quattro.

What spending brings you joy?

We love to travel without (financial) barriers and have been to 43 countries, in a comfortable way. We also love to go out and eat three or four times a week.

My biggest weakness is my daughter. I travel a lot for work and always try to buy something for her because the smile is there every time.

Any goals?

Short term … to build something memorable; Kavak is allowing me to build a multimillion-dollar business.

But working because you need to live is not what I want to do. If I can keep teaching or doing something on the side, have enough money to do whatever I want, including travelling, that is a go-to plan.