Qatar Financial Advisor

14/05/2013

Preparation is key... it would have been great to know some of these facts before arriving! I could add a few about money...
http://www.telegraph.co.uk/expat/expatlife/10053737/Moving-guide-10-things-to-know-before-relocating-to-Qatar.html

With hundreds of expats flooding into Qatar every day, British journalist Victoria Scott, who has lived there for four years, gives the lowdown on what to expect.

27/03/2013

http://www.linkedin.com/today/post/article/20130326054847-174077701-the-5-real-reasons-to-hire-a-financial-advisor

If you believe much of the media, you hire a Financial Advisor to try to outperform the stock market. Never mind that this can have very little bearing on whether you can live or retire as you would

14/03/2013

* IFS: International Financial Services www.interfs.com/qa/

* 5th Floor, Qatar Financial Centre Tower, West Bay (opposite City Centre, and there's parking in the building)

* Contact me via a message above, email [email protected] or call on 7055 2022

Since 2002 I have experience helping expats make the most of their financial opportunities offshore, providing comprehensive wealth management solutions for investors in Asia and the Middle East.

As part one of the largest financial advisory groups in the region, I have built a reputation for professional and highly personalised advice in the course of constructing and managing clients' portfolios.

My approach is straightforward, centred on integrity, clear communication and a focus on my clients' long-term financial security, underpinned by my access to the broadest possible range of financial products and services.

With online access to your investments, full transparency in fees and any commissions payable, and a quality range of brand-name investments and insurance tailored to your needs, my clients take comfort that they are receiving the best possible service and are properly advised by a knowledgeable, QFCRA-licensed advisor.

10/03/2013

*THE INCREDIBLY SIMPLE MATHS TO EARLY RETIREMENT*

(Or how to retire in 10.5 years by saving 40% of your income)


In the course of doing financial health-checks for my clients, they ask me, “How long do you think it will take me to retire?”

When it boils right down to it, your time to reach retirement depends on only one factor:

Your savings rate, as a percentage of your take-home pay

If you want to break it down a bit further, your savings rate is determined pretty much entirely by these two things:

* How much you take home each year

* How much you can live on

While the numbers themselves are quite intuitive and easy to figure out, the relationship between these two numbers is a bit surprising.

If are spending 100% (or more) of your income, you will never be prepared to retire, unless someone else is doing the saving for you (wealthy parents, social security, your company pension fund, etc.). So your work career will be infinite.

If you are spending 0% of your income (you live for free somehow), and can maintain this after retirement, you can retire right now. So your working career can be zero.

In between, there are some very interesting considerations. As soon as you start saving and investing your money, it starts earning money all by itself. Then the earnings on those earnings start earning their own money. It can quickly become a runaway exponential snowball of income.

As soon as this income is enough to pay for your living expenses, while leaving enough of the gains invested each year to keep up with inflation, you are ready to retire.

Drawing this on a graph, it's not a straight line, it's a nice curved exponential graph, like this one above from the Early Retirement Extreme book (http://amzn.to/TlhT70)

If you save a reasonable percentage of your take-home pay, like 50%, and live on the remaining 50%, you’ll be financially independent in a reasonable number of years – about 17 according to this chart.

So let’s take the graph above and make it even simpler. I’ll make some conservative assumptions for you, and you can just focus on saving the biggest percentage of your take-home pay that you can. The table below will tell you a nice ballpark figure of how many years it will take you to become financially independent.

Assumptions:

- During your working/saving years, you’ll be investing and earning 5% investment returns above inflation

- You’ll live off of the “4% safe withdrawal rate” after retirement, with some flexibility in your spending during recessions.

- You want your stash to last forever, so you’ll only be touching the gains, since this income may be sustaining you until age 100 or more! Just think of these assumptions as a nice generous safety margin.

Here’s how many years you will have to work for a range of possible savings rates, starting from a net worth of zero:

Savings Rate . . . . . . . . . Years Til Retirement
5% . . . . . . . . . . . . . . . . . 66
10% . . . . . . . . . . . . . . . . 51
15% . . . . . . . . . . . . . . . . 43
20% . . . . . . . . . . . . . . . . 37
25% . . . . . . . . . . . . . . . . 32
30% . . . . . . . . . . . . . . . . 28
35% . . . . . . . . . . . . . . . . 25
40% . . . . . . . . . . . . . . . . 22
45% . . . . . . . . . . . . . . . . 19
50% . . . . . . . . . . . . . . . . 17
55% . . . . . . . . . . . . . . . . 14.5
60% . . . . . . . . . . . . . . . . 10.5
70% . . . . . . . . . . . . . . . . 8.5
75% . . . . . . . . . . . . . . . . 7
80% . . . . . . . . . . . . . . . . 5.5
85% . . . . . . . . . . . . . . . . 4
90% . . . . . . . . . . . . . . . . under 3

So if you’re only saving 10% of your income, could you cut a few corners here and there, a few less lattes per week and boost your savings by 15% . . . ? If so, you could retire EIGHT years earlier. Are those frivolous little spends worth working an extra eight years for?

The most important thing to note is that cutting your spending rate is much more powerful than increasing your income.

The reason is that every permanent drop in your spending has a double effect:

* it increases the amount of money you have left over to save each month
* and it permanently decreases the amount you’ll need every month for the rest of your life

So your lifetime passive income goes up due to having a larger investment nest egg, AND it more easily meets your needs, because you’ve developed more skill at living efficiently and thus you need less.

If want to retire 10.5 years, the formula is right there in front of you – simply live on 40% of your take-home pay.

05/03/2013

** GET YOUR FINANCES ON AUTOPILOT **

Come on, admit it. When it comes to sorting out your money, you’re lazy.

However, it’s not such a bad thing. It’s probably saved you from jumping into that scam some guy was offering you, and from shifting your money into another currency which has now gone down, etc etc. Laziness, or rather, inertia, has protected a lot of people by staying in cash.

However, have you seen inflation lately, especially here in Qatar? A couple of years ago my regular grocery bill at Carrefour was around QAR500 . . . now I’m lucky if I walk away with change from QAR 1000 (and that’s avoiding Megamart)!

So you know you need to get your money working harder for you, but what?

I say: stay lazy. You just need to set up a system.

A SIMPLE APPROACH TO PUTTING YOUR MONEY ON AUTOPILOT

As you get older, your finances will get more complicated whether you want them to or not. So the simpler you can keep your financial system, the better.

Three primary accounts – one monthly investment account, one current account and one savings account – should suffice.

STEP ONE: The first principle of your Money on Autopilot system is to Pay Yourself First.

This means directing a portion of the money you earn into a long term monthly investment account as soon as you earn it.

(As expats, we need to make this investment account flexible, in case something happens, we have to move etc etc. That’s why traditional pension- / 401k- / superannuation-style investments usually won’t work for us. We at IFS can show you how to pay yourself first but retain flexibility, access and control)

What should this long term monthly investment account look like? It depends on your attitude to risk, your age, your goals, your future earning potential, and many other variables. There are stocks, and bonds, and mutual funds, and property, and gold, and savings accounts – so many to choose and too many to discuss in this little Facebook post, but that’s where I help my clients find the best available options.

Pay Youself First also means putting money towards your emergency fund – you should do this first and foremost . . . a back-of-the-envelope calculation is three months’ salary but you might need more depending on your circumstances.

There are two ways to Pay Yourself First:
1. Split your direct deposit between your current account and investment account and savings account (ask your HR manager for the form).
2. Set up an automatic transfer between your current account and investment account and savings account on the day after you are paid.

STEP TWO: Put your bills on autopilot.

Once you have a comfortable bank account buffer in place, the next step in putting your money on autopilot is to setup automatic bill payments to your rent, insurance, car loan etc.
There are two main ways to do this, in my order of my preference:
1. Pay with a rewards credit card. As long as they don’t charge a convenience fee to do so, this is your best bet. For one, you can earn your one or two percent of the bill back in rewards and two, you have a third party in between you and the biller. (Remember one of the best things about paying with a credit card—not cheque or debit card—is your right to dispute the payment with the credit card company and not pay anything until that dispute is resolved).
2. Pay with your bank’s online billpay. I like this option because you have control over multiple bills in one place (your bank’s online login). You can stop or change payments to more than one bill instantly in one place.

We humans are emotional, easily tempted, and lazy. We expat humans also do really stupid stuff with money. Therefore, it’s my opinion that the single most important thing you can do for your finances is to put your money on autopilot. OK ACTION ITEM TIME: 1. Start by getting your bank account buffer sorted, if you haven’t already. Then get the system flowing: 2. Start Paying Yourself First, and then 3. Put your bills on autopilot.

26/02/2013

A coincidental follow-up to my update from yesterday; this was in today's Gulf Times... http://www.gulf-times.com/business/191/details/343490/unauthorised-financial-advisers-must-face-action%3a-qfc-authority

Financial advisers, who operate without proper authorisation, ought to face action, a top official of the Qatar Financial Centre Regulatory Authority (QFCRA) has said.

25/02/2013

Why should I choose a QFC-Licensed Financial Advisor?

Have you recently been approached by a financial advisor? Have you checked their qualifications and their licensing status?

We have had many clients come to us lately with problems caused by unlicensed, unregulated Financial Advisors working in this region. It is a worrying trend that we feel should be addressed.

The financial crisis of 2008 has lead to a public demand for increased regulation of the financial sector. However many people are choosing to forego the security that the improved regulation offers and are trusting their money to companies operating outside this framework.

Deciding to work with a financial advisor is a huge step and represents a significant commitment to managing your future security. To do so without the reassurance that licensed company brings is like choosing to build your dream home on shaky foundations, in a flood plain, or on a fault line.

Why?

Just committing to a product and hoping for results is not enough. A sound financial plan to incorporate the correct financial vehicle(s) and ongoing strategic management of your account is crucial to your success.

At iFS, our investment management team continually reviews strategies to maximise our clients’ portfolios. Regular meetings with your financial advisor ensure that these strategies work effectively towards your pre-determined goals.

Without the ongoing advice and support of a professional advisor, all investments are vulnerable, especially when markets are turbulent. It is precisely at these times when the unlicensed operator is likely to run for cover, nowhere to be found.

So why do these companies continue to work illegally? Why not just get a license? The simple answer is because it’s a difficult process and maintaining a license requires a substantial dedication of time, resources and money.

Here in Qatar the Financial Services Industry is regulated by the Qatar Financial Services Regulatory Authority (QFCRA). Their standards are rigorous and favourably compare with those adopted by the UK’s Financial Services Authority (FSA) and in the USA.

Companies such as iFS, awarded a license by the QFCRA, must prove not only their financial good-standing and a permanent presence in Qatar, but most importantly they must adhere to a stringent code of compliance procedures and ethical standards.

A licensed company must operate a transparent complaints policy amd clients have the reassurance that all transactions will be supported and monitored by the QFCRA as a safeguard.

A Financial Advisor working for a licensed company must have a proven track record and be professionally qualified to the most exacting standards. Just having once sold insurance or mortgages back home is not enough.

Ongoing training and development, overseen by the QFCRA, ensures your iFS advisor is in the best possible position to advise you on how to best capitalise on the strategies devised by our in-house investment team.

Working with a licensed advisor means:

• Security of knowing the advice is ethical, appropriate and fully endorsed by the regulatory authority
• Realistic, verified models to project future returns
• The small print is clarified
• The advice is the right solution for you

It all might sound rather dull, especially when compared with some of the high-pressure sales tactics and exaggerated promises made by the fly-by-night unlicensed salesmen.

In fact it’s so dull that it might send you to sleep.

As a client of a licensed company, at least you can sleep soundly.

21/02/2013

** The Cost of Delay **

Do you spend time worrying about how you can become a millionaire, and end up simply falling farther behind in reaching your financial goals? It’s an irony that is very real and leads to a lot of people either doing nothing . . . or trying to do too much (maybe getting sucked into get-rich-quick schemes, day trading away their savings or starting businesses they aren’t ready for).

Sometimes you can try too hard to get ahead when in fact, just some time and discipline will be enough to lead you to financial freedom. There are ways to get rich without too much hassle, and I like to advocate this road to wealth.

The key is to start investing as early as you can.

Take a look at this chart.

It shows the impact of starting to save early, and the real cost of delaying by even one year.

I’ve assumed a pretty conservative rate of return of 7% p.a..

I love that for every $1,000 you invest from age 30 returns $7,650 of income from age 60.

If you wait just 3 years to start investing, your retirement income is slashed by $1,620 per month!

Your money is bored in the bank. Start investing safely, wisely and with a good financial advisor on your side.

11/02/2013

** Top 5 questions when you have money in the bank**

"I have money in the bank doing “nothing” percent, BUT . . .
. . there’s a lot of financial turmoil out there. Is now the right time?"
. . the bank is safe. What other choices are out there?"
. . I know there is a degree of risk in any investment, so who can actually manage my finances safely?"
. . I have investment accounts in a couple of different countries, which currency and location should I choose to consolidate?"

I know someone that can help with the above - hit 'Message' on the top right corner of this page...

10/02/2013

**The Top 6 Financial Blunders Young People Make**

[Disclosure: I've made all the mistakes below! But in the course of my job and talking to hundreds of clients over the years, I've learned strategies to not make them again...]

Today I was speaking to a friend of mine who really underestimated the total cost of buying his first property in the UK. While he allowed for the taxes, duties, and getting the place ready for a tenant, he (perhaps most importantly) just can't get it rented! So suddenly his investment return numbers just don't look as great as they did on paper last year.

It got me thinking, while this is not a thunderous blunder on its own, it's an example of a common mistake for young people:

- #6 - Underestimating the total cost of big-ticket items. Just like a car: so many peoples' calculations are based on assumptions and not on reality, especially here in Qatar where repairs, spare parts and bingles can be troublesome. Build in a bigger buffer with these purchases and then analyse if it makes sense for you.

- #5 - Not having a budget

If you don’t sit down to look at what’s left after your salary and fixed expenses, it’s hard to determine how much you can afford to spend on things like food, nights out, or an upgrade to your mobile phone plan. Not knowing how much you have can easily lead to spending more than you can afford. A budget can help you determine what you need to do to pay for your next vacation or make you realise you need to start packing lunch more than once a week.

- #4 - Living salary-deposit to salary-deposit

You're still living from paycheck to paycheck? Are you constantly hitting the ATM to check your debit card balance so you know how much you have to spend or are you juggling credit cards that are maxed out? What’s the solution? Set up an automatic savings plan of some sort, which scrapes a small amount of money out of that current account each week and puts it somewhere safe. The point is to build up that 'rainy day fund' AND slowly wean yourself from spending everything that you bring in.

- #3 - You don't talk about your shared goals with your partner

I see a lot of clients who have vague plans about having children and owning a home, but anything beyond that varies greatly. Sit down with your partner and talk about where you want to be in five years. In ten years. In twenty five years (aarggh!). Figure out what each of you wants individually, then look at the areas where they overlap. Compromise a little bit and come up with detailed plans for things that you both want and you’re both willing to work towards.

- #2 - "You only live once” applies to EVERYTHING

Ok look I'm your financial advisor ok so I gotta tell you the hard truth. If you're getting TOO caught up in consumerism and believing the least expensive option is foolish, you might have a problem with your finances later on in life. I used to do the same, gotta have all the toys, living cheap is for losers, etc etc. But I was a fool. What's the solution? If you’re constantly bombarded with the sense that you need to spend money to fit in with a social group, find another social group. Engage in activities that are personally appealing to you that don’t revolve around spending money and seek others who are interested in those things.

And the Number 1 Financial Blunder Young People Make:

- #1 - Believing that saving gets easier with time.

Although it is true that a young person can count on and increasing salary, some young people don't adequately prepare for the increased costs that will come along with it. Marriage, children, new cars, furnishing a house, providing support for a dependent parent: all of these are costs that will only increase over time. Young adults who don't start the savings habits early face a difficult road in convincing themselves to start saving just a year or two later. By that point, the sense of entitlement and the sense of the type of lifestyle that is normal have already been formed. The habits will prove hard to break.