x Abu Dhabi, UAEMonday 22 January 2018

Teen Life: Invest, save, diversify - what I need is to hone financial skills

I've been unsuccessfully trying to learn some financial skills before starting university, as I've never studied the basics of money management before.

I don't know how I am going to be able to manage my finances at university. What am I going to do when I need to withdraw cash from the bank? That's it, I decided grimly. I will stop bleating about the irony of not knowing my credit card from my debit card when my parents are finance professionals. I have a wonderful source of information that I will exploit to the fullest. Google, you will no longer be used to only look up things like "hot actor wallpapers". Oh, and the parents. They can be wonderful sources of information too, I suppose.

I resolutely fired up the computer, Googled "personal finance basics" and clicked randomly on a promising-looking brief that seemed to be the easiest to understand. "The most fundamental rule of personal finance," it proclaimed gravely, "is to spend less than you earn ... That's it; everything else is in the details." Oh, really. You learn something new every day.

We'd try to save money but shops don't make the process any easier - quite apart from enticing you with delectable shoes or pretty handbags.

When the folks at the supermarket owe you 25 fils in change, for instance, they never have any coins to give you, and so probably accumulate thousands in unreturned change over the year. They do, however, kick up a fuss if you pay "only" Dh24.75 when the bill is Dh24.80. All right, miffed customer rant done. Back to personal finance.

There were various websites that outlined the steps of opening bank accounts and lectured on about the necessity to be insured. I asked mum whether it's worth paying so much at this point in our lives for insurance - it's always older people to whom things happen. Unsurprisingly, I got an earful about how youth is stuck up and convinced it's invincible.

One of our teachers had impressed on us that it is important to start investing now, at 17 or 18, to gain maximum return in the future. Over the next few minutes, I had a quick read on stocks and bonds. The gist seemed to be: bonds are safer but stocks are more likely to give bigger returns over the long term because of the beauty of probability. And don't forget to diversify and invest in concrete things such as property and art.

It would be genuinely fun to discover artists or own an old master. Buying, say, a Turner watercolour would be investing in a piece of history, allure and magic. Art heists are the diet of crime writers. There is no romance in buying a stock, an ugly figure on the computer screen that you can't eat or admire. I ran a search on the approximate price of a work of one of my favourite artists, Waterhouse, and got a page full of things about a firm called PricewaterhouseCoopers. Oops. I tried again and found out that the estimated price of a Waterhouse was a million pounds. Rather beyond my range, I'm afraid.

Personal finance is far more complicated than expected. I'm just going to start being extra nice to the parents and hope I'll get the knack of being on the money someday.


The writer is an 18-year-old student living in Dubai