New report also finds that one Asian country produces two new billionaires a week
The Middle East and North Africa (Mena) region, which includes the UAE, is one of the major producers or havens of self-made billionaires in the world, new data suggest.
As of 2017, the number of people in the region who have at least $1 billion worth of assets went up to 52, and three quarters of them are self-made, according to the latest UBS/PwC Billionaires Report 2018.
That’s higher than the proportion of self-made billionaires to the billionaire population in the United States, which stood at 68 per cent in 2017. The US has been topping various rankings for the richest people on earth.
The report also stated that the wealthy population in the region, many of which have been producing jobs and raising living standards, have seen their fortunes grow considerably in the past year, hitting $165 billion (over Dh600 billion). The overall size of the billionaire population in Mena also expanded by 15 per cent.
The latest data seem to coincide with other research studies that highlight the region as one of the attractive destinations for the world’s wealthiest.
According to Hurun Research Institute, there are at least 22 self-made billionaires in UAE alone as of March this year, the highest in the Gulf Cooperation Council (GCC) region. And their number is growing quickly.
“Self-made entrepreneurs in the Gulf are growing fast. Almost half of the self-made billionaires residing in the Gulf are immigrants, especially from India, who have settled here,” Rupert Hoogewerf, chairman and chief researcher of Hurun Report, had said.
And while the region is home to a growing number of people who built their fortunes through hard work, other markets are minting new billionaires faster than ever.
In China, two new billionaires are produced every week, and as of 2017, it is now home to 373 billionaires, up from 318 in 2016.
Their combined wealth also jumped by 39 per cent to $1.12 trillion, higher than the growth rate posted across the Asia Pacific region at 32 per cent.
Across the globe, there are now a total of 2,158 billionaires.
“We are experiencing a new wave of entrepreneurship worldwide, with billionaires at the vanguard of innovation. They are creating jobs and prosperity, but their impact goes beyond economics,” noted Josef Stadler, head of Ultra High Net Worth at UBS Global Wealth Management.
“A new generation is emerging, and they see an opportunity to tackle some of the greatest environmental and societal challenges facing humankind.”
Do you want to get rich like these billionaires? Here are some tips from the experts:
Get a better bank account
Perhaps your bank doesn’t pay you any interest at all on your savings deposits or is charging you unnecessary fees? Are you not getting cashback on your purchases or discounts when you use your debit/credit card? If your answer is yes to any of these, it’s high time you shift to another bank account.
“Make sure your bank account is working for you rather than against you,” according to a spokesperson for National Bonds. “This is one of the easiest first steps you can take. If your bank account is charging you unnecessary fees and is not offering you attractive perks or benefits, it’s time to make a change. Choose an account that suits your individual requirements and offers you a competitive interest rate with no minimum balance.”
Consider Shariah-compliant finance and banking tools, as they could provide a rewarding option for individuals looking to save money.
Avoid buying on an impulse
In a country where shopping malls are mushrooming everywhere and bargain offers pop up almost every pay day, people are very inclined to make unplanned purchases. Buying stuff on an impulse is usually an emotionally driven, spur-of-the-moment thing and it can range from small to large amounts. And if you’re not keeping an eye out on your daily or weekly outgoings, you’d be surprise to find one day that you have zero money left in your bank account.
To help control the urge, here’s a three-day rule to keep in mind. “Wait three days before you make a purchase. If you find a product which you want to buy, waiting three days can help you determine if you really need it or not. While taking three days to decide whether or not you want to buy something may seem excessive, it will help you build healthy spending habits in the long run. This is what a financial planner calls sleep on it,” National Bonds suggested.
Record your expenses
To always know how much money is flying out of your wallet, try downloading an app that helps you record and categorise all your expenses, suggested Vijay Valecha, chief market analyst at Century Financial.
Pack your lunch
Packing lunches to work can be a very time-consuming affair and if you have a very demanding job and a huge family to juggle, it takes a superhuman feat to cook a meal every single day. But consider how much money you save if you avoid the urge of ordering food every lunch hour. That’s nearly Dh4,000 a year, if you spend an average of Dh16 at your office cafeteria.
If your hands are always full on week days, try preparing your meals in advance, during the weekend. Search online for “quick meal prep” recipes, so that you have your lunches cooked and packed on your day off and you don’t have to worry about cooking on a daily basis. The great thing is that you can bring down the cost of every meal and you know exactly what goes in your packed lunch.
Choose the right cards
If you really have to use a credit card, choose your provider wisely. The privileges, discounts and charges on every credit card vary from one bank to another. Keep an eye out for interest rates, cashback offers and benefits. If you choose wisely, you can make your credit card work for you, not your bank, and ultimately, you get to cut down on expenses and save money.
Get in the habit of walking
Minimise your dependence on transport and take a hike. If it’s possible to walk to the Metro station, ditch the car, especially if it’s a gas-guzzler. You won’t just save money on fuel, you spare your wallet from paying thousands of dirhams every year on traffic fines, registration, insurance, maintenance and Salik fees. Taking a taxi is not an option, either.
Build a budget, and build it right*
Trying to budget is not always enough, you must budget the right way. Follow four simple steps to make sure your budget is as accurate and beneficial as possible:
- Total all your monthly income
2. Split all your expenses into two categories: fixed and variable
3. Make room for emergency adjustments
4. Review your budget monthly. For budgeting-beginners, the 50/20/30 rule is a good way to get into the habit of organizing your finances. Start by spending 50 per cent of your income on living expenses (rent and bills), 20 per cent on debt reduction or saving, and 30 per cent on flexible spending. But before that, pay yourself first by putting aside 10 per cent to 15 per cent from your monthly income.
Avoid accumulating new debt*
Sometimes, debt is unavoidable. For example, people take on loans to buy their first home or an unforeseen medical expense has come up and, in situations like these, paying in a lump sum is not a possibility. If you are going to take out a loan, make sure you put as much downpayment as possible against your cost of purchase.
This will help you repay in a shorter time frame and reduce the amount of interest you accumulate. Be conscious of the installment amount you must pay each month and make sure you do not miss payments – this is the easiest way to accumulate new debt. And avoid a loan for your down payment if you can’t even save this then you are not ready to buy a house.
Here’s the critical part: Set aside a fixed amount of money each month
So, how do you start saving to make Dh1 million, you ask?
Committing to save and exploring avenues to cut down on expenses is just one part of the plan. The other key to buliding Dh1 million is to decide how much money you want to set aside each month. A financial planner had earlier told Gulf News that it’s possible to make Dh1 million by saving money for seven years, which is the average length of time people stay in the Gulf.
Let’s say you set aside Dh5,000 every month, you can grow that into Dh1 million over time. The key is to take advantage of the power of compound interest.and avoid touching the money for 13 years.
“If a 30-year-old saver was to save Dh5,000 a month for seven years at 5 per cent interest, but left the pot to mature at 6 per cent interest until the age of 50, he/she would have earned Dh1,000,000. Therefore, it is clear to see the benefits of saving earlier but for less time using the power of compound interest,” said Hamzah Shalchi, regional manager of Guardian Wealth Management.
“The idea is to invest a decent amount of savings every month for seven years and then do not touch it for [another] 13 years so that it accumulates interest, which eventually grows the savings pot into Dh1 million,” Shalchi said.
So, the total investment is less than half a million (Dh420,000).
Source: Gulf News.