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Top savings and investment tips from a successful millennial investor

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Top savings and investment tips from a successful millennial investor

Growing your wealth from a young age is easy if you follow simple rules. Don’t believe us? Meet this savvy investor who wants to retire early.

Growing your wealth might seem tricky. It takes care, knowledge and willpower. So it’s no surprise that globally 25% of those we surveyed in our Emerging Affluent Study 2018 said they were very far from achieving their top financial goal, and 42% feel their lack of financial knowledge is holding them back, but 60% believe that seeking expert financial advice will help them get there

To find out how people can invest and save more effectively, we spoke to Ahmad Badr, a 31-year-old consultant. This young investor has gone beyond just saving and is now actively growing his wealth. Ahmad’s  investment advice and secrets to success could help you too.

Ahmad, the savvy investor

Ahmad may be young, but as a teenager his father helped him pinpoint investment opportunities, and he’s been going it alone for the last two years.  As he explains, he has clear ambitions and long-term goals when it comes to growing his finances. “My dream is to enhance my family’s lifestyle,” he says, “to have enough money to allow my kids to pursue their dreams, and for my wife and I to have access to things we never thought we could.” In fact, he is already keeping an eye on life in his 60s and beyond. Ahmad  is currently planning for his retirement and has been in talks with a financial adviser to further help grow his portfolio.

Start small, dream big

Studying for an MBA had depleted much of Ahmad’s savings, so he started off with a modest amount of AED 5,000 to invest and key goals to:

Save at least AED 30,000 per year to allow for an overseas holiday

Buy a bigger sedan/ SUV in three years, costing around AED 160,000

Purchase a house in three years, worth at least AED 1,600,000 ideally before the age of 35 (which may require debt financing)

Build savings of at least AED 1,600,000 in the next 18 years to support his children’s education

Invest in another house in the next 10 years, worth at least AED 1,600,000 (especially if he can save more and service the debt on the first house faster)

So far, Ahmad has:

Saved enough money for an annual family holiday

Achieved 33% towards his dream of buying a bigger sedan

Accumulated 10% towards buying his first house (a sum will increase going forward now that he doesn’t have the expense of funding his own education)

Succeeded in tracking towards building his savings to AED 1,600,000 and buying a second house within his expected time frame

Tip #1 Pay yourself first
Every month, at least 30% of Ahmad’s  salary is automatically debited from his main income account into his
savings account. “You should have no access to this as part of your monthly expenditures. Be sure not to view your savings account as your ‘go-to’ bank account – this small tweak helps with savings immensely,” he advises.

Tip #2 Build splurges into your budget
“It’s okay to splurge as long as you do so responsibly — we should also enjoy our life!” he adds. “When I travel, for example, I budget a certain figure and then add a 20-25% contingency, due to the exchange rate or price increments at the destination.”

Tip #3 Start investing only what you are prepared to lose!

“Start off with a modest amount that you are prepared to lose, to gain real experience in monitoring investments,” says Ahmad who started off with AED 15,000

Tip #4 Be patient, it’s a long journey

Planning for the long term is key, investments will not grow your wealth overnight. Having a long term goal that has milestones along the way, like Ahmad , helps to keep focus. When deciding on his goals, Ahmad  looked at what he missed out on when he was growing up, and what is important to him in the future.

Tip #5 Make friends with your bank

“Banks are a good resource for structuring your investment activities – for low risk”

Tip #6 Branch out to minimise risk
“Do not concentrate your investments in a certain company or even asset class,” advises Ahmad . Diversification is good, as it spreads the risk.

Tip #7 Build your investment knowledge
“One of the best pieces of advice I received is that you should always understand what you are investing in,” explains Ahmad . “This includes knowing the downsides, not just the up sides. When it comes toinvestments, I go through the data and market updates provided by  my bank before I make my decision on whether to invest or not..

Ready to invest in your future?

Starting your investment planning journey doesn’t have to be scary. Learn more with Standard Chartered, and explore your investment choices with our investment advisors,  regular market insights and more.

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You are never too young to start saving for your future. Find out now.

Disclaimer

This article is brought to you by Standard Chartered UAE. This information is neither an offer to sell, purchase or subscribe for any investment nor a solicitation of such an offer. This information is general and does not take into account a person’s individual circumstances, objectives or needs. Investments carry risk and values may go up as well as down. Standard Chartered is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein.