Icebreaker - Intro to the podcast

I made this episode in 2022, had been sitting on it for about a year, until I finally had the courage to publish this for you. Whether you're in your car, on a walk, at the gym, or doing your chores, I have one promise to be genuine and help you with your finances. Enjoy listening to the very first episode of the Dubai Finance Podcast.

Now here's the show notes:

Time is money, now that’s an age old saying. It’s a phrase that encapsulates two key resources both of which are limited, time and money. Yet, you can use your time wisely to save money, you could also use your time strategically to invest money for growth.

Conversely, it is also true that you can use money to save on time. Sadly, no amount of money can increase or grow your time, we haven’t found any keys to immortality, at least not yet.

Ladies and gentlemen, my fellow listeners, from the golden sand dunes that capture the imagination, to the modern architectural marvels, it’s my privilege to be your host from Dubai. My name is Divesh, and I welcome you to episode 1 of the Dubai Finance Podcast.

Who I am, what is this podcast, why is it relevant to the listener

In today’s episode, I am here to tell you about a story, my story so far, and my motivation to start a Finance podcast. I started my journey as a young professional in the city of Bangalore in 2011, this was the year I had qualified as a CA. I had landed my first job with a Big Four audit firm, and I was pretty excited about the career that was ahead of me. It was my first time living independently, I never had to bother about rent before, or the costs of transportation, credit cards, electricity bills or anything.

Responsibilities were upon me, and me alone. To make matters complicated, I was about to get my partner in crime, my marriage was scheduled in less than 1 years’ time. Despite learning about Finance and Accounting for the 10 years before, managing my own income and expenses felt like a different ball game. I needed to make sure that I didn’t run out of money and had surplus available.

At this point, I had learnt a valuable lesson, that we need to count our expenses and have money set aside for contingencies, and life events. I had picked up a tool which is the monthly expense review. It was something I had learnt about, now put into practice with the help of an Excel Sheet.

As time flew by, I eventually got married, our family income was higher than what I did individually, but our living expenses were higher too. In any case, things were looking better financially. Up until we were with blessed with our first child, that’s when my wife had to take a break from employment post her pregnancy, this meant we had only a single income and our expenses had increased with the birth of our son. I am sure this is a familiar scenario, a lot of us have been through or are going through.

Luckily, I had my old tool the monthly expense review and budget to our rescue. This helped us stay disciplined, and plan our expenses at a challenging time. As Benjamin Franklin had famously said, a penny saved is a penny earned. It certainly does work in the modern world.

In a few years’ time, we had moved to Mumbai, and I had the idea to quit my job, and be self-employed. I had been moonlighting as a freelancer online apart from my regular job for a few months, and things began to look promising. So, I took the plunge and tried to take each day as a challenge, no longer having the perks of a monthly salary. The CEO of my ex-employer had shared a famous saying in the business world and it goes like this. Sales is Vanity, Profit is Sanity and Cash is King. The essence of this saying is the emphasis on having Positive Cash Flows. No matter what the business is, whether it’s a startup, a family run enterprise, a Multinational, the importance of generating cash flows cannot be ignored.

Personally, I began to realize the importance of cash flows as a business owner, not just staying profitable. I had to ensure I met expenses which needed to be paid timely, while at the same time, I had to ensure fledgling enterprise had to comply with local laws and regulations, that included taxes. This continued for a while, until I moved to Dubai, and landed a job with one of the leading Utilities in the region, the year was 2016.

Fast forward six years to today, I work as a Regional Finance Manager for a multinational company, and I am hungry to learn more about finance, specifically Personal Finance, as this will help me individually to reach my goals, and Business Finance, so that I can add real value to the organizations I work for. At the same time, this podcast is equally meant for you the listener, I would hope that you find the content on this podcast valuable enough, that you could apply things you’ve learnt into your lives and your businesses. I plan on achieving these goals by researching material and producing curated content relevant to Dubai and the Middle East as well as inviting guests who are experts in their fields and who can add a lot of value. So you can sit back, relax and I’ll have you covered.

For this episode, I’ve broken it down into two segments that I wish to cover on an ongoing basis in this podcast. In the first segment, I will talk about Personal Finance in Dubai, and then move on to Business Finance in the second

Finance in Dubai Personal Finance Savings and Investments – Dubai, India, US

Dubai is a unique city in many ways, there’s no personal income tax as of today, which is a huge attraction for people to move in, higher salaries than many regions in the world, but expenses can be high too. Despite the challenges faced, there are ways in which we can effectively manage our finances. Given its location, and lower barriers to transmitting foreign exchange there are ample opportunities to access global markets even as individuals. This gives a level of freedom, but it can also be quite daunting, when you’re unsure about what needs to be done.

The aim for every household should be to cover contingencies due to either loss of job or downturn of business. While there are varied views on what should be the minimum amount saved up for contingency, it’s advisable to have at least 6 months’ worth of monthly expenses stashed as a contingency fund. This fund should preferably be in a Saving’s Account. While interest rates in the region low, the plan for a contingency fund is that you never want to have to use it, but if and when there’s a need, you have at least 6 months covered for. I’d even recommend 12 months if you can, but 6 months is a bare minimum.

To give you a teaser, this is a topic we will cover in episode two.

Often times people don’t opt for a Saving’s Account in the UAE, due to the low rates of interest, and requirement for a minimum balance.

Personally, I like earning a little interest than no interest. There are however, banks that offer up to 2% interest or profit rates, in case of Islamic Banking, which is definitely better than your funds remaining stagnant in a current account or as cash in hand. Another possible avenue for savings would be National Bonds, they tend to offer comparable or slightly higher rates of return than Premium Savings banks accounts, paid through profits or earnings.

While contingency funds are meant to cover unforeseen circumstances in the short term, when it comes to fulfilling life goals, long term investments are the best answer. So, what’s the difference between investing and saving? Saving means, you set aside money that you intentionally don’t spend so that you can use the money saved up at a later date. In the case of savings, you look at interest rates for comparison with different banks, as well as their financial standing to decide on where to shore up your cash. Investing on the other hand is building an asset portfolio, that pays in passive earnings, like dividend, rents and realized profits from increase in value of the investment.

Investments that are held long term take the advantage of compounding, they sometimes have a lock in period such as mutual funds, corporate bonds, and can be illiquid such as real estate, or even liquid like stocks and ETFs. With the proliferation of the internet, we also have newer concepts through Cryptocurrencies, however, it’s still a bit like the wild wild west, and it’s still in my view in its early days. The technology has its pros and cons, but it can’t be ignored, I am sure we will have episodes dedicated to it in the future. There’re also physically valuable assets like metals such as Gold that have been used as a traditional reserve of wealth for centuries and generally being a depleting natural resource, the intrinsic value of gold should increase on demand and supply principles. Needless to say, I’ll have you covered, we will go over each of these avenues at length in this podcast multiple times over and assess what works well over a period of time.

When based in Dubai, if you’re like me, an expat, we are also in a position to invest as non-resident citizens of our home countries, again be it in real estate or in the stock market. We can also access mature markets like the US. Moreover, if your home country is a growing economy, chances are that you will also gain by way of home country currency depreciation versus the USD. As an example, in 2016, 1 USD was hovering around 67 Rupees, while at the end of December 2022, it was a shade under 83 rupees, which is an increase by 24% and Annualized Increase of 3.4%. So if someone did nothing but kept a 1000 dollars with them in 2016, and sold it in December last year, they would have earned 16,077 Rupees on an initial amount of 1000 dollars which was close to 67000. This return would be even higher, had it been put to work through an investment