The wealth manager Caroline Dredge is a committed saver and says it is important for everyone to plan for their financial future.
Money & Me: Financial success feeds off forethought
Caroline Dredge is an Abu Dhabi-based wealth manager for GlobalEye, the financial services firm. Originally from Hampshire in the UK, she moved to the UAE more than three years ago.
Are you a spender or a saver?
I am most definitely a saver. From a young age, I was encouraged to save for things I wanted from pocket money. I am one of four children and we all had money banks, and we grew up with a competitive spirit as to whose money bank had the most in it. This has continued into my adult life.
How would you describe your financial journey so far?
I remember my first Saturday job and the excitement of earning my first wage of £125 (Dh745 at today's rate) per month, and thinking I had no idea how I would need that much money and what would I spend it on. Of course, as you gain commitments and your earnings increase, you find that there are plenty of things to spend money on if you wish. I have always been structured in my savings, whatever I earn. For example, when I wanted to buy a house, at age 20, I found out how much the mortgage would be and started saving into a separate account so I got used to the amount going out and saved a deposit to boot.
As a wealth manager, do you practice what you preach?
Absolutely. I focused on making sure I am well protected first of all, so if something happens tomorrow I am not a burden on anyone else and I can still maintain my independence. To that end, I have short-term monies that I hold outside the UAE, offshore for rainy days, and a life and critical-illness policy that would pay out offshore a lump sum in those events. I am then saving both monthly and ad hoc lump sums into an offshore wrapper, which will allow my money to grow securely and provide excellent tax benefits should I return to the UK or another jurisdiction. I have a target for what I need in this wrapper to secure my financial future and monitor how I am achieving this goal. This is exactly the same as I advise my clients and I utilise the same solutions that I advise to them.
Did you make any financial mistakes along the way?
Property has been a bit of a let down in recent years. My last house that I bought in 2004 is still worth roughly the same as when I purchased it, so that hasn't been the best of investments, although the mortgage is very well covered by the rental income.
What is the most valuable financial lesson you've learnt?
To plan and take responsibility for your own financial destiny. Illnesses, retirement and rainy days are not things that just happen to other people, they happen to you and people you know. If you just hope everything is going to be OK, it can be, but not without a lot of stress and heartache along the way.
Do you believe in planning for the future?
A large number of people have never considered how much money they need to secure their futures. The reality is that long gone are the days when we retired at 65 and popped our clogs on at 70! The average age of a western male to live to is about 80, which means there are a lot of people who will live way beyond that - and that could be you. It is no good to rely on the government or your company pension schemes back home, when western countries are full of ageing populations that will be too costly for the governments to keep in good financial stead. We have also seen companies reduce the pension benefits and the pension schemes they offer employees because of massive deficits. You have to take responsibility; a 35 year old has only 300 pay days to go until they reach 60! After that, they may well be another 300 pay days, but there is no salary - just what you have secured for yourself. Essentially, your future is your choice, but a lot of people choose to ignore it, preferring the more immediate feel of today.
Is money important to you?
Money is important to me for the financial security it brings. I don't desire hundreds of millions at a cost for having a life today.
What is your idea of financial freedom?
Having enough money to say, "I don't have to work today; I am doing it because I love it and find it fulfilling". It's knowing you can do the things you want to do without being excessive.
What's your philosophy regarding money?
Enjoy life now, but have an eye to the future. It won't be what you have spent that will make you financially secure, it will be what you have saved.
What do you enjoy spending money on?
Despite what I've said, which sounds like I never spend, I do find a balance. I enjoy spending money on travel, good food, quality items that will last and family.