The power of a saved dirham

Think long term when it comes to your savings. The opportunities that liquid capital open up for you are endless, so adopt a savings habit and let your money multiply.

  • By Rickson D’Souza, alpha magazine
  • Published: 15:19 January 29, 2013
  • alpha

  • Image Credit: Getty images
  • Be wary of poor lifestyle decisions. Loans are a great way for banks to make money. And by constantly turning to loans for stuff you don’t really need, you are only making the bank richer.

Ever heard of the phrase “easy come, easy go”? Well that applies to money, too. How often have you read about guys who win the lottery, yet end up broke in a matter of years?

There is a sure-fire way of getting richer, no matter what the size of your salary. All you need is to build a savings habit. The stress here is on the word ‘habit’, because your aim should be to get to a stage where putting money away every month becomes an unconscious act.

Years ago, I knew a young man, 30, who spoke about his plan to retire early from his stressful job. His plan was to move abroad with enough money to fund his children’s education, pay for his home in cash and to have funds to spare for emergencies.

The only way to prepare for this future was to ensure that he saved 50 per cent of the joint household income every month. Easier said than done you would think, but he did this anyway. He saved when he was earning a five-figured salary and continued to do so when his income reached six figures.

To cut a long story short, he has a few years left to hit his goal, but he is more than 60 per cent there. The reason he was able to get there so quickly is because he always dipped into savings to invest in the good opportunities that came his way.

Since he had the liquidity, he was able to take advantage of the opportunities available and reach the next level in his savings plan. Man makes money, money makes money! Those who realise and remember this basic truth of our times have done well for themselves.

There’s a big shift in the way this generation thinks about their finances. A lot of the past generation put their money away, simply because they had more humble beginnings. They knew what it was to grow up with little money. On the other hand, we live in this age of consumerism, with our penchant for brands and gizmos that we don’t need and cannot afford. A banker friend, to my utter horror, once told me about a colleague who took a two-year loan of Dh30,000 to buy a handbag, which she discarded after a year and moved on to the next thing, even before she cleared her loan amount.

Be wary of poor lifestyle decisions. Loans are a great way for banks to make money. And by constantly turning to loans for stuff you don’t really need, you are only making the bank richer.

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I’m not suggesting you go through life tight-fisted and miserable, but put away what you need to save first. You can spend the rest. This will also ensure that you have money when you need it.

The money invested will generate more money and could grow to a point where you have the flexibility to quit that boring job you’ve been stuck in for years. You could pursue your entrepreneurial dreams or take time off to study that degree you’ve been eyeing. Do not underestimate the power of a dirham saved.

The reason building this saving habit is a good idea is exactly that. It becomes a habit. Regardless of your income, if you can commit a percentage of it away every month and stick to the plan, you will learn to live off the rest of your salary.

I’ll leave you with this little gem from Warren Buffett.

“If you buy things you don’t need, you may soon sell things you need.”


Rickson D’Souza is director of wealth management at Pinnacle Insurance Brokers, Dubai. He can be reached on 04-346-8888 or

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