(Written by Dorota Lewna, posted by Sebastien Aguilar)
We were pleased to host Andrew Hallam again as our guest speaker here in Dubai. Andrew is a personal finance writer, author of Millionaire Teacher and Millionaire Expat, teacher by profession (retired already) and an active opponent of fixed term, expensive, insurance-linked saving products sold widely to expats across the world. He is also a mentor to many expats who follow his advice on retirement planning and setting up their own retirement solutions without paying excessive fees to “experts” who rarely do it right.
Our group has already hosted Andrew Hallam twice before and every time his talk gathers larger audiences. This time over 350 people attended! We are grateful to Dubai College for making the auditorium available for this event, without it we wouldn’t be able to entertain such large participation. Thank you again Dubai College!
Andrew’s talk was split into a short 30 min presentation where the audience is guided to calculate ‘what is their retirement number’. Each person is encouraged to follow the exercise there and then to calculate how much money they will need to retire. Some people are very surprised having calculated a massive number, conscious that it will take many many long years of saving large amounts to reach this number! Well, there comes homework number one: think it through and reassess if you will really need all that money for your retirement. Cutting down costs is the best way to make your retirement amount reachable.
In the second part of the presentation Andrew talked the audience through the complex, often non-understandable insurance-linked saving/investment plans. Having observed the reactions of the audience from the front of the hall, I noticed many people shaking their heads and covering their faces with shocked expressions at the point where Andrew illustrates the amount of money expats lose through excessively high fees, when investing in those plans without realizing it. It is not easy to receive such news and cope with it as many people put all their savings into these sorts of plans, from their hard-earned expat salaries, hoping for a comfortable and safe retirement. What they learned that evening is that in most cases, their financial advisors are going to benefit from their investments much more than themselves.
The presentation leaves many people shocked: they go home, check their contracts, call their financial advisor and for the first time ask the right questions. When hearing the answer, they know that everything Andrew has told them was true.
Andrew also explained that there are much more cost-efficient ways of investing: through a portfolio of low cost widely diversified index funds. These can be setup DIY style like many in this group do, or via a fee only adviser that will not get commission from the products sold. Combined with the simple principles of the Bogleheads philosophy, this approach gives the best chances to retail investors to get the returns they deserve.
Click here to see the presentation from Andrew on how to calculate your target retirement fund size and here to see his presentation on his approach to simple smart investing for expats.
We have also live-streamed this talk on our Facebook Group, follow this link to access the recorded video (you need to be a member of the group to see the post).
During the event we also announced our “New Year, New Identity”. Common Sense Personal Finance and Investing is changing to SimplyFI for Simple Finance, Simple Investing, Simply Financial Independence and a simpler name for the group. You can find us on www.SimplyFI.org.
See you soon!
Dorota