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Retirement Planning

Retirement is no fun when you don’t have enough money and we want to make sure you don’t outlive your wealth so that your later years are spent in comfort and security.

The most common concern of people thinking about retirement is that they might outlive their money. With modern medicine allowing people to stay healthy and live so much longer, the chances keep growing. You are active for almost 30 years accumulating wealth but might have to spend this for more than 55 years after retirement.

So how much money does it really take to be financially independent? While the answer to this question is very much up to you, some experts say that you need up to 70% of your income before retirement depending on what activities and plans you have once you retire.

If retirement is around the corner, and you don’t have a plan yet, then there is no time to spare. Unless you are quite wealthy and have all the money you’ll ever need, you should really start planning. Hopefully, our financial planning information will help you to get the ball rolling.

Use our Retirement Calculator to determine what size your nest egg should be.

Children Education Planning

Children’s education grows over 20% yearly, so saving for their education requires a long-term plan. Like saving for retirement, the earlier you start your planning, the better it is.

As a parent, we want to provide the best education for our children so that their future is secured, however most of us neglect the importance of planning for their education which often results in a mountain of loans at the time of need. This not only affects your savings for retirement, but also your family’s financial budget.

Did you ever think how much your child’s education would cost you?

Can you afford to send your child to the best university?

Quick Tips: Education Planning

Better to start saving early
Compounding profit rate makes small investment larger
Know how much time you still have until your child starts university; the sooner you start the better it is
Assess the education fees cost today and see how much it will cost you in the future when your child starts university. This will help you forecast tomorrow’s cost.
Open a regular savings account, such as a myPlan savings program, and put incremental amounts aside to get started today

Use our College Savings Calculator to help fine tune your education savings plan.

Warning Signs of Too Much Debt

Unable to save 10% or more of your gross income
Habitually paying only the minimum monthly payments on your credit cards
Borrowing from one lender to pay another
Asking a friend or relative to co-sign a loan because your credit record is weak
Unable to figure out the amount you owe
Would be in immediate financial trouble if you lost your job tomorrow

How to Conquer Debt

By using the ‘snowball method’ of paying off debt, apply the majority of your available money for debt repayment to one loan and minimum payments on the others. After the first loan is paid-off, you tackle the next loan and so on until all you’re out of debt completely.

Other ways include:

Stop borrowing
Start using a debit card
Prioritize your debt repayment
Seek lower rates
Determine the maximum you can pay
Repay highest cost debt first
Continue paying the maximum

Using Home Mortgages Wisely

Determine whether buying is appropriate
Choose the right type of mortgage
Decide if you should refinance
Decide whether to prepay mortgage principal

Your mortgage is most likely the biggest loan you will ever take and some of us are quite eager to get rid of it as soon as possible. An early pay-off gives you peace of mind and financial freedom, but the low profit rate makes more sense to invest your money instead of paying-off that debt early.

Use our Debt Management Calculator to determine if debt consolidation is right for you.

Protection

We all know that life can be full of unexpected surprises. The death of a loved one can put enormous emotional and financial strain on a family. What would happen to your loved ones if you weren't around?

Thankfully, Takaful – a Sharia compliant protection solution – provides you with "peace of mind" so you can protect your family – and business – in such difficult and unexpected times:

Life Takaful Protection
Disability insurance
Critical illness
Income protection
Terminal Illness

The Council of the Islamic Financial Services Board (IFSB):

Takaful is based on the principle of co-operation and mutual help for the good of the society at large. Currently there are at least three Takaful models that are widely used, based on the contractual forms of Mudarabah, Wakalah and Waqf or a combination of these. Whilst the existence of these models demonstrates the flexible and practical nature of Takaful principles, they also raise the questions of contractual relationship between parties and their respective rights and obligations, as well as the need to ascertain the types of risk peculiar or common to each model.

Will Planning:

Estate planning secures peace of mind for those who hold great significance in your life and it is important to know that the nest egg you have accumulated during your lifetime will not erode.

A valid will is the cornerstone of any estate plan. In it, you should outline how you want your assets are distributed, arrange for the ongoing care of your dependents, name guardians for your children, or make a bequest to charity.

Planning your estate ensures your assets go where you want them to, with less risk of argument or legal challenge. While it can be hard to think about your own mortality, being prepared and planning for what will happen to your finances, savings, property and the people and things you consider dear is too important to ignore.

For expats living in UAE, there is a very simple reason to make a will. “The UAE Courts will adhere to Sharia law in any situation where there is no will in place.” - The Government of Dubai’s official website

Planning for Incapacity

The final component of your estate plan should address potential situations where you may become physically or mentally incapacitated. This is achieved by creating an enduring power of attorney. Without an enduring power of attorney, your attorney (not necessarily your lawyer or notary) cannot act on your behalf during a period of incapacity until they receive court approval.

Financial Goal

You're more likely to achieve a goal if you define it. Having a goal focuses your choices and decision-making capabilities.

Time Horizon

Knowing your "investment time horizon" or when you need to start withdrawing certain amounts from your savings, is key to determining which type of investments are the best match for your financial goals. Some investments may be too volatile for short periods; other types may not offer adequate long-term growth.

Risk Tolerance

Sensitivity to risk differs from one person to another: some fear losses; others fear missing the maximum return. However you react to the risk, you should be aware of your tolerance to it as it greatly influences what investments you choose.

Managing risk means more than just avoiding an investment loss. It also means outpacing inflation and being able to make gains. Risks arise from different factors – some are controllable while others are not – but risk can be managed. A well-constructed investment strategy can improve your ability to keep risk in check.

Investment Knowledge

Your knowledge about investing may be limited or even quite sophisticated. When defining your strategy, determine early on if you understand what you're investing in, or if you have the updated knowledge that would benefit from an Investment Advisor.

Financial Situation

Your personal finances may be robust or average. You may owe money or be owed money, receiving a regular income or just faced with special expenses. Your personal financial cycle is critical to forming an effective investment strategy.

Other Considerations

Some people’s beliefs and values are deeply important to their investment strategy. Whether you invest primarily for returns or to explicitly defined principles such as religion, environment protection, etc., these values will affect how and where you invest your money.

Portfolio Management

When you invest you acquire a vehicle that changes in value overtime. There are ways to influence, and control your investments performance through various portfolio management techniques. Here are some core concepts related to portfolio management that underline an effective investment strategy, regardless of your personal circumstances. To find out how to make the most of these and others investment concepts, contact us today.

Asset Allocation

Your investment portfolio is structured by investment type, duration, amount, etc.

Selecting the right allocation of assets and adjusting them to changing conditions can put you on the right path to meet your financial goals. It's also an important strategy for reducing risk.

How your investment portfolio is structured by investment type, duration, amount, etc. – is, as an authoritative investment industry source put it: "the primary determinant of returns." Selecting the right allocation of assets and adjusting them to changing conditions can put you on the right path to meet your financial goals. It's also an important strategy for reducing risk.

Diversification

Choosing a variety of investment vehicles with different performance characteristics to achieve a better overall return, is the essence of asset allocation. Diversification reduces fluctuations’ impact in the value of investments.

"Don't put all of your eggs in one basket”. Guidance on the practical implications of the role diversification plays in an investor's portfolio and offers no insight into how a diversified portfolio is actually created.

Whether the market is bullish or bearish, maintaining a diversified portfolio is essential to any long-term investment strategy. A diversification strategy can help you achieve more consistent returns overtime and reduce your overall investment risk.

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