Back to basics this week. However, let's not get basics confused with wealth. An investor earning sackfuls of dirhams is just as prone to error-making as the hordes of laymen financial planners.

So whatever your salary statement says, and with apologies to Stephen Covey whose 'Seven habits' title is being abused, the following points are based on finding "peace of mind".

The objective of planning is "peace of mind". While we all have variable attitude to risk (or tolerance to loss) it remains a given that while some Gulf News readers will get lucky (the inheritance; a lottery win; the penny share coming good) the majority of "winners" will be those who are best planned.

Some bits of their plan will go wrong. Without a plan, everything can go wrong. The back to basics adage applies to everyone: "failing to plan is the same as planning to fail".

I give you my top seven unsuccessful habits. They are based on "life in the UAE" and take into account the range of financial products commonly doing the rounds in these parts. Up front, number one: the lack of insurance. There are only two problems to deal with when planning: dying too early and dying too late. So while insurance has to be one of the most boring subjects in the world. Like cleaning the kitchen, it has to be done. Even if you don't do it, get someone to organise it for you. Here I vote along with the UK FSA's approach to prioritisation of planning to include PRISM (protection first, then retirement, investment, savings and mortgage).

Number two: You have no savings. In the business of financial planning, I find three broad levels of complaint. Lack of service; lack of performance and miss-selling. The first can be sorted, and the last is serious and needs investigation. The middle one, performance, is tricky. The performance issue needs the investor to understand risk, plus, have an understanding that, as long as you have enough cash, you can weather performance turmoil.

Risk management

Understanding risk may lead to expectation management reshuffles (asset allocation changes); but managing enforced sales when markets are down or before the term of the investment has expired is usually painful. This usually happens because of the lack of savings. In isolation, and in my experience, the single biggest cause of complaints.

Number three is credit card debt. According to Liz Weston on MSN Money: "Don't fall for the myth that credit card debt is normal or that the average American carries huge balances. In reality, most US households have no credit card debt, according to the Federal Reserve. Only one household in 14 have more than $10,000 in credit card debt".

Actually, that statement runs as a bit of a surprise. Yet, worth bearing in mind in the UAE where banks are pushing their credit cards every which-way. With debt costs that can include annual fees and/or interest rates some 10 to 15 per cent over the cost of money.

Good for the bank. Not at all good for the card owner's consolidated balance sheet. This leads to mistake number four, and the most obvious: spending more than you earn. If your outgoings are more than your income how can you possibly achieve peace of mind, and how can you possibly be happy? If you have the answer let me know.

Number five: not reading what it says on the tin. This especially applies to the "new wealth" generation who will be looking outside of the usual capital markets for more high-octane performance. Private Equity, Venture Capital, hedge funds. All potentially complicated. By definition, PE/VC involves a certain amount of "first mover" or "second mover" understanding. In other words, the potential returns are high because the risk is high and the asset being purchased has few people demanding it (keeping the entry price low). In such circumstances "read the label on the tin". The tin is the prospectus. The prospectus provides you with an insight into the angles of recourse should something go wrong.

Performance variability

Mistakes and misunderstandings occur when the investor walks away with only "high-level sales objectives", a 30 per cent per annum return over two years, instead of "targetted returns" and "forecast completion dates". The need is for investors to understand both recourse and performance variability.

Number six: Not understanding your mortgage. Whilst I am unaware of a significant amount of mortgage problems in the UAE, or of any repossession, mortgages cause a great deal of stress elsewhere. Heard of the sub-prime drama? Of course mortgage problems will occur in the UAE sometime.

We are a property price correction away from that time. Then the winners will understand their mortgage product and will have included the cost within their income/expenditure flow. They are not bothered by market price changes although they may take the opportunity to move into bigger accommodation for the same mortgage! The losers are those who don't "get it".

This leaves number seven. A significant "error area" in the UAE: dying too late by outliving your savings. If your grandmother and grandfather are still alive you especially need to focus on building a retirement savings vehicle.

Key ingredients for getting on top of this include: disciplined savings, every month, no exceptions; ensuring that the denomination of the retirement vehicle is valued in the currency you intend to spend in retirement; ensuring that the asset allocation is matched to your attitude to risk and base currency. If these are "in hand" then another key skill is not to over-react to falling markets. As it says on the tin: "you only lose by selling".

- The writer is chairman of Mondial Financial Partners.