At the start of an investment journey, it is quite common to be confused. Many wonder “When can I start investing? How much disposable income do I need to become an investor?  What if I get married? What if I get divorced - what happens to our joint investments? What about the kids?’ 

While a few try to answer these questions themselves, it is usually better to seek expert guidance from firms that offer financial advisory and investment services in Dubai. The pros will not only help you choose the right investment approach but also assist you in getting the right investment products.

If you are an expat in Dubai and are thinking about starting your own investment journey, you are in luck! In an episode of the Expat in Dubai Podcast, I sat down with Stuart McCulloch, Executive Director at The Fry Group to dig out a few points that every new investor needs to know.

Point 1: 

Have emergency money.

Investments always carry a certain level of risk. Hence, before you start your investment journey, ensure that you have saved enough money to help you in an emergency. While there is no set percentage of monthly income that you need to keep aside as emergency funds, it is recommended to at least have about 3 to 4 months of expenditure saved up safely in your bank accounts. This will provide you with liquidity and safety in case you encounter any emergencies along your way. Moreover, because you have an amount of money set aside you can easily handle a sudden increase in your monthly expenses without affecting your monthly investment commitments.

Point 2:

Try to invest in liquid funds.

Liquid funds are assets that do not have a lock-in period. A lock-in period signifies the amount of time during which you are not allowed to withdraw your money from the fund/asset. A lock-in period makes it difficult for you to be flexible with your money and withdraw it whenever you need it. Hence, many firms that provide financial advisory and investment services in Dubai usually advise you to invest in liquid assets for this very reason: flexibility. Investing in liquid assets allows you to adjust your portfolio as you desire and also enables you to withdraw your investments from the asset if it does not perform well.

Point 3: 

Invest in cost-effective assets.

If the cost of buying into an asset is high, the profit that you earn takes a hit. Hence, you must have heard many firms offering financial advisory and investment services in Dubai promoting low cost index funds. There are many investment assets that do not cost a fortune to buy into. However, it is important to remember that while not all, the majority of high-cost assets often offer higher returns. Consequently, you should ask the firm that provides you financial advisory and investment services in Dubai to create an investment basket that has a mix of high-cost and low cost funds to match your financial goals and budget.

Point 4: 

Be mindful of tax implications.

If you are an expat in Dubai, you may be planning to go back to your home country someday for retirement. Hence, your investments must be made by keeping the tax implications of your home country in mind. You also have to take care of the tax implications in Dubai. While firms that offer financial advisory and investment services in Dubai can help you with tax planning in the country, you may need to speak to someone who specializes in tax rules of your home country for better understanding. The good news is that most financial advisory firms have strategic partnerships with firms in different countries and hence, can help you connect with the professionals with ease.

Wit these 4 points you are ready to start your investment journey. Most firms that offer financial advisory and investment services in Dubai will help you plan for your children’s education and also help you divide the assets and funds if you and your partner do get separated in the future. Hence, you can rest assured and enjoy a wholesome service when you hire a professional and licensed financial advisory firm in Dubai.

Listen to the full podcast with Stuart here