It is holiday time again, Eid is next week and many Dubai residents will be thinking about taking some time off and leaving Dubai for a while. A time to relax, unwind and do the things they have been looking forward to all year. What will you be doing? What plans have you made for the couple of weeks away? Are your passports in date? Where you are going to stay? Have you planned a few excursions to see the sights? Thought about how much spending money you will need? There’s lots to think about…
So that’s what you have to do for a holiday of a few weeks. It requires an objective and planning. Some choose to leave everything until the last minute, hoping that a great deal can be snatched, others start planning the day they get back from their last holiday. They save a little money each month as a holiday fund so when they need to pay for the flight, accommodation etc it is there and does not have a big impact on their day to day spending.
It is often said that retirement is the longest holiday. I can’t agree with this unless there has been adequate planning. There are no last minute deals on offer before you retire. Unless you have saved money before retirement it is going to be a pretty miserable existence. Not like a holiday at all. For many retirees, the prospect of a couple of weeks in the sun, somewhere overseas is unlikely as it would cost too much. Roughly The majority of retirees in UK are in this position today.
The best time to start planning for your retirement is from your very first pay cheque. However, for many, especially those starting work, retirement is just unimportant: it is so far away. But for roughly every 5 years delay, an investor will have to save twice as much to achieve the same outcome. That is the magic of compounding.
Setting check points along the way to your retirement goal helps keep yourself focused. For example, owning your own property is one way of enforcing saving (provided you have a repayment type loan) so owing a property by the age of 30 for example may be a check point.
Fixing an amount of your income, that’s salary and bonuses (as a percentage) that you save every month should be another goal. With this goal, it is really just a habit and the longer you do it the easier it becomes.
Enjoy your holidays. Please let me know if you have any comments or questions.