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How to Invest: A Basic Guide to Grow Your Wealth in 2020

Investing can be intimidating. And this can stop people from getting started. But it doesn’t have to be scary. Here at Sarwa, we’re passionate about helping people to start investing, giving them the skills they need to wisely invest their money in the UAE. Here are a few pointers.

If you’re financially stable enough to start saving a little money, it pays to put it to work by investing it. But it isn’t always easy to know where to begin investing in the UAE. You know you should start investing but you aren’t quite sure how to start.

At Sarwa, we help people start out in investing by providing access to simple investments and offering easy-to-understand investment advice. So if you’re thinking about investing, here are a few inspiring quotes and a couple of pointers to get you on your way.

An ancient Chinese proverb says:

“The best time to plant a tree was 20 years ago. The second best time is now.”

Once you’ve decided that you want to start investing, the trick is to, well, start. It really doesn’t matter if you haven’t ever invested before as the best time to start investing is today. All you have to do is work out what is the maximum you can afford to invest on a regular basis.

And you’d be amazed at how much you can save over the long term by regularly investing a little bit. All you need to do to start saving for that big investment goal in the future is to put a little aside today. For example, $1000 invested each month into a FTSE 100 tracker that returned 5% a year (after inflation) for 30 years would now be worth $880,000 thanks to compound interest.

You also need to make sure that your money isn’t simply being eroded by inflation. For example, if you just left your cash in a bank account, it isn’t growing and the cost of living (what you pay for your house, your food, your car etc) might be outpacing the interest you are getting. In this case, inflation is eroding your cash, making it worth less over time.

Hence, you must make sure that your money is invested and earning either the same or more than inflation. If not, you’re simply losing money as you sit and wait to invest your cash.

So you needn’t be put off by the fact that you only have a little to invest. The key is to start and you can start investing from as little as $5 via a platform like Sarwa.

As Socrates says:

“The only true wisdom is in knowing that you know nothing.”

If you only have a small amount to invest, you don’t want to lose money. And it’s easy to make rookie mistakes in the early days of investing. It’s at this point where you’re at your most vulnerable. But there’s no need to panic.

For example, in the financial crisis of 2008, markets plummeted. Investors with no expertise lost a lot of money However, professionals saw the problems coming and managed the risks, saving clients a tonne of money. When bad times come, it pays to have someone with expertise on your side, as they can use investing techniques, like diversification, to minimize your losses.

Whilst there are no guarantees in investing, there are things you can do to lessen the chances of losing money. One of the most important is to accept how little you know and seek some professional advice before you start.

At Sarwa, we believe in the value of speaking to a professional. That’s why we have financial advisors waiting to take your call or share a cup of coffee with you to discuss your financial future. So get in touch for a chat about your goals.

As Benjamin Franklin says:

“Beware of little expenses. A small leak will sink a great ship.”

Whilst investment advice from a professional is vital, there are some people out there who will sell you advice at a very high price. For newcomers, this is a surefire way to lose money before you’ve even started. For example, lots of active investment managers will charge you every time they make investments on your behalf. This can cost you up to 4% of your entire managed portfolio annually. So it’s important to watch your costs.

As an alternative, it’s much cheaper to use a passive, automated financial advisor who charges a fraction of this fee. The rise of passive investing has taken wealth management by storm, as these investment strategies are cheaper and, historically, have outperformed active managers. Passive investing is what we focus on at Sarwa. Here’s why we believe it works.

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As you can see, at Sarwa we’re passionate about educating investors and giving everyone the opportunity to begin investing. We know that investing can feel intimidating and this can lead to new investors making mistakes, making the wrong choices or, simply, not ever getting going.

But if you follow our words of wisdom and start small, ask for advice and keep your costs low, you won’t go far wrong. If you have questions about any aspect of investing money in the UAE, why don’t you get in touch for a chat?

You also can join us for our next event about the 4 rules of investing.

Ready to invest in your future?

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