Dubai: Several teen students in the UAE have proved time and again how they didn’t wait till they graduated from school or college, or even get a well-paying job to start earning money.
Even as students routinely stay up to date on their curriculum-based and predominantly theoretical courses or grades, when it comes to making money practically or on the stock market, there has been a growing trend wherein many are learning the ropes, venturing out – and succeeding.
After some success, he went “all in” when there was a stock market crash in March, after seeing it as an opportunity to buy stocks at lower than market prices. By buying and selling stocks on US stock exchanges, besides a few in the Chinese market, he now has a portfolio worth around Dh165,000, with investments also in cryptocurrencies.
At first, the student used to deal mostly in penny stocks – shares whose value is normally below $5 (Dh18) but have the potential to skyrocket – or nosedive. As his profits soared, he changed strategy, going for “growth stocks” that are more stable, more expensive and gradually increase in price, typically.
He has invested in stocks of over 40 companies, including famous ones such as Amazon, Google, Apple, Tesla, Microsoft, Facebook and Boeing, as well as lesser-known ones such as Beyond Meat and those that have recently gone public.
But what got many others like Aadi motivated to make money in the first place, and how are various government and other UAE-based private initiatives promoting financial literacy among the young?
The motivation factor?
Parents play an important role in shaping children’s financial behaviour and attitude towards money. Many teenagers look up to their parents to set the right example when it comes to managing finances.
While it might not be easy to discuss money with your children, particularly as they approach adulthood, experts say the skills required to manage their personal finances can be conveyed early on in an approachable and relatable way. The idea is to get them to think beyond their allowances or pocket money, about their future dreams and plans.
Although it's a good practice to provide children with some reasonable regular allowance and maybe, advise them on how to spend money smartly, experts view, while adding that there is a long way to go in terms of getting people on board to start saving and investing young - reiterating what studies too reveal.
What do current studies show?
A Visa card study found that 43 per cent of respondents in the UAE aged between of 16 to 24 say they are not ready to manage their own money, while 53 per cent believe schools do not prepare them enough.
The Visa study also indicated that only 28 per cent of the respondents in the UAE would like to start or continue saving. This is significantly below the 80 per cent average observed in a recent survey on the financial habits of youth in three key European economies.
However, nearly half of them believe that financial institutions should have an advisory role when it comes to enhancing financial knowledge. Studies have also shown that teaching personal finance at a young age has an effect into adulthood.
Another report found students exposed to personal finance education had credit scores that were 7 to 29 points higher than those of students who did not have such classes. So, how can teenagers learn to manage their finances better?
Making it a habit is key for kids
The key to successful saving is making it a regular habit: setting aside a certain amount of money earned in a savings account. It’s also important to save money for a rainy day, for example, to cover any unexpected expenses such as a malfunctioning computer device like a laptop or a iPad.
Parents can help their children categorise their goals into short-term, medium-term or long-term, whether it’s a new phone, a vehicle, a holiday or something much bigger like a car or a house.
Roundup of options in the UAE
Here’s a roundup of what are the different options that are out there in the UAE to help a student earn money.
The following wrap-up also covers how one can in certain cases carefully ease from using dummy cash before using real-world money, while also detailing ways to enhance financial literacy – getting you on the fast-track to earning big before long.
UAE government initiatives
In the UAE, the government has also taken steps to include personal finance education in schools and also had announced a programme to promote basic financial concepts to pupils aged 7 to 18.
The importance of teaching financial literacy in schools is a topic that has gained global attention in recent years, and it is being implemented in UAE-based schools as well.
In the UAE, schools have started teaching personal finance as part of moral education, which was introduced as a compulsory subject in September 2017. Several other educational firms have been introducing money concepts through entrepreneurship projects and business fairs.
Private sector initiatives
Here are some private sector initiatives in the UAE that have spiked interest among residents in recent years.
• The Kids Finance Initiative (KFI):
KFI has been offering money management courses for children since it started four years ago. To date, as per their website, 3,458 kids have been trained over primarily nine programme categories.
KFI not only offers courses in money management, but also entrepreneurship and investing, taught using an activity-based curriculum from the National Financial Educators Council based in the US.
With a team of trained professionals, who all have advanced degrees in finance, business, and education, KFI has brought a number of programmes to the UAE and has particularly seen an increase in enrolments since the ongoing health crisis.
• Zurich Investars programme, part of Zurich Insurance Group:
Introduced in 2018, the Zurich Investars program gives 16-18 year old business and economic students $100,000 (Dh367,320) in virtual money to invest in the dynamic world of stock markets. The rules are simple: use they money to invest in a short-list of funds selected by Zurich.
Participants must pick between 4-12 funds and allocate no more than 40 per cent to a particular fund. Zurich provides live tutorials on investing principles and a range of digital resources. (Zurich Middle East is part of Zurich Insurance Group and one of the world's largest insurers.)
The success of the initiative has proved how students enjoy learning about investing and money and how understanding the basic concepts of financial decision-making before they take on their own responsibilities, can equip them with the knowledge, skills and confidence.
• Kidstarter, a Dubai-based start-up:
Kidstarter is an online marketplace where children can run their own business with nominal support needed from their parents.
The aim of the marketplace is to encourage children, both within the country and in the surrounding Middle East region, to sell items from an early age to experience financial freedom – testing their entrepreneurial skills.
There is no minimum age to enroll on the platform, but children have to have their parents’ support to join. Children can either be on-boarded on to the platform directly or through their parents. There is a monthly fee involved for accessing training materials.
The marketplace is tied up with US-based Kidpreneurs, an academy that offers guidance on logistics, customer service, managing complaints and aptly pricing a product. Those enrolled also has an option to register with UK-based Accelerator Academy that assist youngsters to build their businesses.
• NGS Kidpreneurs, from Dubai’s Next Generation School:
Next Generation School, an American Islamic school in Dubai, started the “NGS Kidpreneurs” programme when the institution was founded in September 2016, teaching students how to spend and save wisely, but also provides an opportunity to teach real world financial topics.
As part of this programme, students in grades one to seven have to apply for jobs – such as a banker or electrician – and earn a monthly salary, while also paying monthly rent.
On the entrepreneurship side, the pupils submit a business plan for the student store that runs every month. They then earn ‘NGs’ – a form of income – which they can exchange for activities such as ice skating at Dubai Mall, Bounce or Green Planet, through the school’s partnership with Emaar.
• Yskool, under Yardstick Educational Initiatives:
India-based Yskool, which comes under Yardstick Educational Initiatives, provides entrepreneurship and financial literacy programmes for school students. At online courses conducted at yskool.com, the firm conducts online camps.
One such camp is its junior MBA programme, where kids are taught by serial entrepreneurs to develop their idea to business plan and pitch their plan to investors. Dubai-based schools like Gulf Indian High School and Gulf Model School are few schools that have tied up with them in the past.
Yardstick Educational Initiatives has partnered with 500-plus schools across 11 countries, and has offices in Sharjah, UAE and the UK. Over 750,000 students have benefited from the course, as per data from their website.
• ‘Goal’, a Standard Chartered initiative:
‘Goal’ is an education programme operated by Standard Chartered, introduced in 2006 and aims to provide financial literacy and employability training to young girl children.
A programme launched by the bank in the UAE, in collaboration with non-profit business education centre Rawafed, also trains teenage girls save and invest practically.
The training curriculum of ‘Goal’, which is in over 20 countries, is based on four modules, one of which is: ‘Be Money Savvy’, through which it focuses on financial education, how one can save, invest and use a bank account to your advantage.
