Money & Me: 'My biggest financial regret is buying my Dh5m yacht'
Sanjay Shah, of Autism Rocks Support Centre, says the vessel is moored off Palm Jumeirah and the logistics of going out on the water for a day are too much hassle
Sanjay Shah is the founder and chief executive of the Autism Rocks Support Centre. The Briton has lived in Dubai for eight years with his wife Usha, who manages their autism centre in Dubai, their 14-year-old daughter and their sons, aged 10 and eight. Their youngest son was diagnosed with autism at the age of two and the Shahs, finding it hard to get support, hired five therapists to work with him. Mr Shah later set up an autism centre, which has been open 18 months and has 12 staff and 27 children registered. Autism Rocks has since organised concerts with Prince, Lenny Kravitz and Gary Barlow and has the naming rights for the Autism Rocks Arena next to Dubai Outlet Mall. The 47-year-old also runs a hedge fund company based in Dubai International Financial Centre (DIFC), which has diversified into restaurants, movies and real estate.
How did your upbringing shape your attitude towards money?
I grew up in a one-bedroom flat with my parents and my younger sister in Marylebone, London. My father was a surgeon and could walk to work. We were not a wealthy family but my parents taught me to live within my means and be careful of taking on loans. At seven they opened a Post Office savings account for me and explained how banking works. Mum had an interesting business from home - she made scarves and ties and supplied them to Harrods and Liberty luxury department stores.
How much did you get paid for your first job?
I was 12 when I got my first job, a newspaper round before school. I got paid £12 (Dh60) a week. During the summer holidays, I would work at the newsagents and I got paid 25p an hour. My first career job after university was at KPMG auditors in London - my annual salary was £11,000.
Are you a spender or saver?
I’d like to think I’m a saver, but everyone who knows me would say I am a spender. I’m not one to buy expensive clothes - I’m dressed in head-to-toe Marks and Spencer clothes now. And if I go to the supermarket I work out the cost per gram and get local cheeses rather than one flown in from the Netherlands. If I’m on my own, I’ll even take lunch to work. But I’d be happy to spend a small fortune on dinner. I mainly spend on experiences such as nights out rather than trinkets. If I’m going for brunch, I’ll invite my friends and end up paying because I want them all there and don’t want anyone saying they can’t afford it. On a Friday afternoon, I might take the kids on a $1,000 helicopter tour of Dubai. I also will pay to fly first class rather than economy.
What is your most cherished purchase?
It’s an unreleased, official Prince vinyl record, Camille, which was owned by his personal assistant in the 80s and 90s. I won it in an auction for $15,000 this time last year, a few months after he passed away. I think it’s the only one in the world and I would never sell it. In fact, I’m too nervous to even play it. I haven’t even opened the cover yet. If the house got flooded it’s the first thing I’d take with me.
Have you ever had a month where you feared you could not pay the bills?
In 2003, when Usha was pregnant with our first child, I lost my banking job. We were still paying off loans from our 1999 wedding, had just moved into a big house in Stanmore, north London, and taken out a huge mortgage. I had no idea I was going to be made redundant and had monthly instalments of £10,000 to £12,000 (Dh49,600 – Dh59,500) to pay; all our income was going on repayments and utilities. We had to sell our big car, a Mercedes ML 4x4, and buy a cheaper Toyota, which gave me enough to keep going for a couple of months until I found another job. My pride was dented and I worried about what the neighbours would think.
Where do you save?
I was brought up being told that real estate is a good way to invest: you get an income from it in the form of rent and property prices normally go up. I have quite a disciplined way of saving - I’ll buy a portfolio of corporate bonds from a local bank, which will usually provide me with leverage. If I have $100,000, they will lend me $200,000 on top, I’ll invest in a basket of corporate bonds and get a yield of around 10 per cent then spend the income. If I end up making, say, $500,000, I take the money out and buy an apartment. I have over 50 properties, a lot of it in central London, but also Dubai, Hong Kong and Japan. I won’t buy off-plan: I want to buy something I can look at and rent straightaway.
Do you prefer paying by credit card or in cash?
I try to travel light and typically don’t carry a wallet, just my phone and a credit card. As well as getting reward points, I get to review my spending when I receive my statement each month if I pay by card. But I can’t wait for Apple Pay to arrive in the UAE so I won’t even have to carry a card. I do keep my credit card limit quite low - Dh10,000.
What has been your best financial investment?
As a child, I collected stamps - first-day covers issued by the Post Office every three months for about six years. It’s worth a few thousand pounds now, and it’s nice to know that something I spent my pennies on is worth so much more.
I have also bought stakes in two private, Western European music companies in the last couple of years, one of which I’m about to sell for €10 million (Dh44 million), five times what I paid. They will help get Autism Rocks out there; I want to put the branding on tickets and add £1 or €1 (Dh4.3) to the ticket price for the charity. Currently the two companies sell 1.5 million tickets across Europe: I want to keep on acquiring companies until I get to five million tickets a year, then sell to a big concert company and become a minority shareholder, still asking for that £1 or €1 on tens of millions of tickets a year.
What do you most regret spending money on?
I regret buying my yacht. It cost £1 million (Dh4.95 million) and, like a brand-new car, you’ve lost half the value as soon as you try to sell it. It’s moored on the Palm Jumeirah, not far from us, and I have a licence to sail but it’s far enough that we have to drive to it in summer, remember to take food and drink with us, hire a captain and deck hand for the day if I don’t want to sail myself and plan around the kids’ activities at the weekend. What should be an hour or two on the water turns into a four-hour exercise - it’s not spur of the moment - and we are using it a lot less than I thought. It’s for sale but no one is buying. Bernie Ecclestone, the former Formula One chief executive, once famously said that if it flies or floats, rent it. I should listen to him next time.
What financial advice would you offer your younger self?
Save, save, save. Most young people are financially naïve and I find it surprising that financial management isn’t taught to children in schools to this day. When I had my first job, I spent my monthly salary immediately - and then some.
Do you have a financial plan for the future?
I aim to accumulate enough assets to allow me to live off the income. I first had the idea about five years ago - £10 million (Dh49.6 million) in investments would allow me to live off, say, £1 million (Dh4.96 million) in income a year, pay the school fees, have a few holidays a year. Then I thought I’d rather fly first class, live in a bigger house… Ten years ago, I didn’t think I would come to Dubai and have £10 million but I went through that mark a couple of years ago. My next goal? Let’s call it £100 million (Dh496 million); I could live off the income very, very comfortably.
When will you retire then?
I don’t think I will truly retire but, as I get older, I would like to live in a more minimalist way, such as renting my home rather than owning it and travelling the world when the kids are at university. I also want to make sure I have enough money to look after my extended family - my mum, my sister, my wife’s sister and so on.
What would you raid your savings account for?
I have done so in the past to buy gifts for the family. I liquidated an investment at the bank and took a loss to buy my wife a Dh546,000 Hermes handbag for her 43rd birthday. I had my name down on the waiting list for the best part of two years.
Updated: October 5, 2017 03:03 PM