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hey,

What are various ways of investing money --->a common man.not a great earner though..just started working...everything starts from the bottom..

need feedback

yo

mutual funds are the best way to go and you are at the right time to start a monthly savings plan. since you are still young you can select one of the more aggressive funds for long term hold. remember this is for long term investment and not for short term trading... just be persistent and watch your money grow.

PM me if you wish to discuss more...

Don't invest anything here that's for sure, interest rates are pitiful. Offshore accounts are always a good earner.

Chocoholic wrote:Don't invest anything here that's for sure, interest rates are pitiful. Offshore accounts are always a good earner.

Thats a big statement though chocs, what about Real Estate?, lots of people making good money out of their investments here.

I was talking about banking in general, not real estate. Mind you I wouldn't invest in that either, not when buildings are only meant to last 30 odd years, no ta.

It would be silly not to consider investments in Dubai given that it's one of the fastest growing economies in the world. Just like China and India this place will present lots of interesting investment opportunities and one would do well if the investments are managed well and over a medium to long term horizon.

30 years from now someone will regret not purchasing a downtown apartment in Dubai 30 years earlier.

Offshore accounts yielding 2-3% interest are good earners? With the current inflation environment money sitting those accounts are actually depreciating!

Chocoholic wrote:I was talking about banking in general, not real estate. Mind you I wouldn't invest in that either, not when buildings are only meant to last 30 odd years, no ta.

Villas are the thing to go for not apartments

Ansa wrote:Offshore accounts yielding 2-3% interest are good earners? With the current inflation environment money sitting those accounts are actually depreciating!

I'm currently holding fixed deposit and savings in my home country which can give me as LOW as 7% (one month fixed deposit). Beginning of last year was 13.5% when I open the account.

If it were staying at 13.5% I would have get a loan from bank in Dubai and put it there to get 6.5% "profit" without spending a cent

Since USD is getting lower (same as AED) and almost no interest in Dubai banks, for long term investment I was thinking to convert some of my USD & AED savings into gold bullion and property in home country (small student/low rise flats to rent). Unfortunately the gold price is also rising and I had not enough money yet to invest in the property. Stocks? No thanks.

7% and 13% is meaningless if you dont have your currency hedged... i bet your home country is not US nor UK so the net effect would not be so attractive. I know for example south africa pays great interest but who wants to invest there?

Ah, the age-old question... where to invest? I suggest you need to decide for yourself first how much risk you're willing to take, and how much you're willing to invest. There's always a risk/return tradeoff, the higher the risk, the higher the return (theoretically speaking).

People made their millions in Dubai property because it was unchartered waters and a highly risky investment. The payoff in Dubai property is a lot lower now because people realize that the "crash" may not happen, as originally perceived. If you want to invest here, you can invest either in property (ever thought of Abu Dhabi or Doha?), stock market, mutual funds or sukuks... really depends on what your risk preferences are.

sage & onion wrote:

Chocoholic wrote:I was talking about banking in general, not real estate. Mind you I wouldn't invest in that either, not when buildings are only meant to last 30 odd years, no ta.

Villas are the thing to go for not apartments

That all depends on where you buy and how much rent you can get S&O.

For example, if you go out and buy a 3 bedroom villa in the springs today it would cost you near 3.5m dhs. You can only get around 220-250k rent a year for it ~ 6-8% return. If you take the same 3.5m dhs and put into some sort of low risk financial commodity you can safely earn the same % with numerous upside potential.

I know where my money would be.

Back on topic though, this guy ain't at the stage where he can go putting that kinda dosh down so he needs to look at short term investments. I would agree with chocs - keep your money away from local stock markets and go offshore. They are more mature and predictable. Only thing I would consider locally would be forex related - fixed/hedged investments but you need a minimum of 10k USD to play with.

Appreciate that analysis on rental yield, but you haven't taken into account the uplift from leverage, if you can access debt at say 6% and you are getting a yield of 8+% from rental, then your equity return is boosted by the spread thus could potentially reach 12+% (depending on the gearing of coz). And this has yet to taken into account capital growth which is expected to continue in double digits in the coming years underpinned by a growing population.

... Real Estate Investement 101

Ansa wrote:Appreciate that analysis on rental yield, but you haven't taken into account the uplift from leverage, if you can access debt at say 6% and you are getting a yield of 8+% from rental, then your equity return is boosted by the spread thus could potentially reach 12+% (depending on the gearing of coz). And this has yet to taken into account capital growth which is expected to continue in double digits in the coming years underpinned by a growing population.
... Real Estate Investement 101

Hmm... that's too deep for me. I know nothing about finance and investment.
I'm not a hard core investor. I just want to put my "hot" money at the right place to grow (not depreciated). I don't expect high gain. I'm not buying and selling properties. But do you think in general it would be Ok in long term just to buy/build couple of low-rise flats building to rent (not in Dubai)? Just to keep the capital floating and probably as a security airbag in case something happens with my job *knock the wood*

Ansa wrote:Appreciate that analysis on rental yield, but you haven't taken into account the uplift from leverage, if you can access debt at say 6% and you are getting a yield of 8+% from rental, then your equity return is boosted by the spread thus could potentially reach 12+% (depending on the gearing of coz). And this has yet to taken into account capital growth which is expected to continue in double digits in the coming years underpinned by a growing population.

... Real Estate Investement 101

You don't need to use that much jargon to illustrate a simple point but we're talking straight up investment -vs- return, articial sweeteners can be left at the door.

Why does gearing apply in a (personal) tax free country?

does anyone invest in a mutual fund?

if I want to invest in it, how do I start?

it's not a financial jargon but simple math... gearing applies (and add value) to any investments regardless of the tax regime, you were thinking of "negative gearing" which obviously doesn't apply here as you cannot get a tax deduction. the fact remains that most people evaluate property investments on a simple gross yield calculation and used that to compare with other investments, which is not correct as illustrated by my previous point. ask any financial planner and they will tell you the same thing.. except you might have to pay them a fee... this is free advice for y'all...