UAE: Saving to be a millennial millionaire? Here are some billionaire tips to build wealth fast

0
UAE dirhams
Saving to be a millennial millionaire? Here are some billionaire tips to build wealth fast
Image Credit: Shutterstock

Dubai: Most billionaires had turned millionaires by their 30s, so when they are often asked how they built their wealth and got rich, their responses are largely along the same line – start saving young and in chunks!

If there’s a millionaire trade secret, it’s being relentless. While this article focuses on how to become a millionaire in your 30s, the truth is you can apply the same strategies at any time in your life.

Dubai prides itself of having more than 52,000 millionaires, 2,430 multi-millionaires and 10 billionaires. You can become one of them – and you can do it in just a few years of dedicated effort.

Becoming a young millionaire gives you plenty of time to enjoy the fruits of wealth, while opening up numerous avenues to build your wealth further, while classing up your lifestyle.

As your wealth begins to grow, multiple new business or investment opportunities are at your disposal, which can eventually equip you to relocate to another country or maybe even enable you to retire early.

The point is, becoming a millionaire converts those possibilities to probabilities. If you become a millionaire in your 30s, you’ll have those options available to you for most of your life.

However, becoming a millionaire in your 30s is a tough ask. Here we take a look at what habits billionaires have practised when they were younger, to help turn this distant dream into a reality.

While it takes focus and discipline when it comes to saving to become a millionaire in your 30s, the reality is those who save limit it to some comfortable percentage of their income, like 10 per cent.

Tip #1: Save an uncomfortable amount of your income: Veteran investors are of the opinion that if you currently save only a comfortable 10 per cent of your income, aim 30 to 40 per cent higher.

This is the major reason for living well beneath your means. The more successful you are at that strategy, the easier it will be to commit an outsized percentage of your income to savings.

Also Read:  First coders club launched in UAE to boost new digital content and skills

A modest household’s income in the UAE is Dh100,000 per year. If you save 30 per cent of your income, you’ll be putting Dh30,000 into savings each year, leaving you with Dh70,000 to live on.

This means a UAE-based family can set aside nearly Dh6,000 a-month. Even if it means taking more effort with today’s cost of living, there have been several instances where that has still proven possible.

A larger percentage should be allocated to savings with a higher income. If you earn Dh200,000 per year, saving 50 per cent would move Dh100,000 into savings.

If you can save Dh50,000 each year, and invest it at 7 per cent, you’ll cross the million-dollar threshold in 13 years.

Tip #2: Debt is a detour on the road to becoming a millionaire: Billionaires often recommend against keeping debt when saving to be a millionaire young. However, realistically speaking, that is not the case.

This is a real variable, since people have different levels of debt. For one individual or couple, it may mean paying off a couple of credit cards. For another, it may be a car loan and multiple credit card debt.

So while saving to be a millionaire when you’re young and debt-free is comparatively easier, if multiple loans hold you back, there are still options – even if it may mean pushing back your plan a few years.

In such a circumstance, financial planners suggest that it’s wise to focus on setting aside a large chunk of your income to pay off your loans, and work towards becoming debt-free in the next few years.

While you can keep saving on the side, saving after you’re debt-free will minimise unnecessary money going towards your debts’ interest payments, and keep you focused on amassing savings on zero-debt.

One of the debt obstacles for a lot of young people is student loan debt. With the average student debt now exceeding Dh35,000, you’ll have your work cut out for you just getting that paid off.

Also Read:  Biden administration sued by 13 states over tax provision in COVID-19 relief plan

Pay it off, along with all other debts. Debt payments reduce the amount of money you’ll have available for savings, and keep in mind they make it much more difficult to live on a greatly reduced income.

Tip #3: Invest the profits you make from a side hustle: As you are now saving as much money as you can from your salary, the next step is finding ways to make even more money and invest it.

Although billionaire investors making most of their riches through market investments, if not investing your money right away, you need to at least consider a secondary source of income before investing.

Wealth managers and financial planners agree that if your goal is to build your wealth, you need money from means other than your full-time job, which can be through consulting, building websites, or a blog.

Invest all the money you make in your side hustles. If it is Dh100 you get from participating in a market research study or Dh10,000 you get for building a website – send it all into your investment account.

The reasoning is that the future value of this extra income will be exponentially greater than spending it today, like for example, this can be used for any miscellaneous daily expense that is unaccounted for.

A free tool to use is a ‘future value calculator’, where you can plug in any amount of money you are planning to spend today and see the future value of this money.

Investment research has shown that stock markets make you an extra Dh200-plus a week, which can turn into tens, if not at least Dh100,000 over the next 10 years – in an ideal scenario.

Tip #4: Invest in only what you thoroughly know, confident of: Once you make more money, with a side hustle and investing the profits, you need to figure out how to maximise the return on your investments.

Also Read:  U.S. condemns arrest of 47 Hong Kong pro-democracy activists charged with subversion conspiracy

While it’s easier to invest in an index fund that tracks the stock market – it’s not recommended to invest it all in one place. Allocate and diversify your investments into assets like gold and bonds too.

This improves your chances of better returns. It is also often advised that you always allocate 20 per cent of your investment capital towards individual company’s products you use and believe in.

It’s a fact that hyper-connected millennials have a perspective on firms and products that prior generations of investors don’t have – which is why there is a rising number of millennial millionaires.

The stock market tends to favour things that are hip, useful, and essential. To pick a good stock, analyse what everyone else does and monitor social media platforms where investors come together to discuss.

Let’s say you first invested in Apple after the first iPhone came out or with Google after seeing how much money it makes selling “clicks” or bought a few stocks of online shopping giant Amazon.

The strategy would have brought in high investment returns in the last 10-plus years. A small investment in Amazon alone would have generated over Dh100,000 in profit. So, invest in growth stocks you believe in.

Verdict: The early success of billionaires like Mark Zuckerberg and Bill Gates is certainly not the norm, and on average, it takes self-made billionaires 32 years to make it big, according to global research.

According to the Spectrem Group, which has tracked and polled the richest households for years, “millionaires are conservative with spending and aren’t out buying mink coats and jewelry every day”.

Studies have further showed that majority of millionaires surveyed don’t own high-end products. Research has also shown about 40 per cent of the ‘rich’ buy cars used.



Also Read: Hollywood News | Latest World News | Latest Dubai News

News Source

Leave a reply

Please enter your comment!
Please enter your name here