UAE: How residents can earn a ‘second salary’ every month – News

Experts explain how the new scheme works and offer advice on how UAE expats can secure their future and save enough for retirement

With the cost of living rising around the world, having an alternative source of income – or a “second wage” – will go a long way to the financial security of UAE residents.

Savings remains a major issue for many expats, with a majority of UAE residents admitting they have little or no extra cash for a rainy day, research shows.Retirement is a concern for most, many expats Just rely on their tips and end-of-service benefitsexperts say.

Under the scheme, if people save Dh5,000 per month for 10 years, they can expect to receive Dh7,500 per month for the next 10 years. Likewise, if they save Dh5,000 per month for five years but choose to redeem it over the next three years, they can bring back Dh10,020 per month for three years — more than double their monthly savings.

Rupert J Connor, partner at Abacus Financial Consultants, said investing in income-generating assets – such as rental properties and small businesses – or taking up a part-time or side job are some of the options for residents of the UAE to earn a second paycheck.

“In developing such a plan, the initial costs have to be weighed to ensure that the investment will actually generate income. For example, when buying an investment property, you have to plan for things like the size of your deposit, your mortgage and rising interest rates. Alternative sources of income can help Focus on paying living expenses and set aside more money to achieve your ultimate goal sooner or later. A comfortable retirement,” Connor said.

Additionally, peer-to-peer lending companies can often offer steady returns, but people should always educate themselves about the risks involved, he said.

“There are also instruments called government bonds or fixed income securities that pay coupons that may be appropriate. There are also structured notes that can be set up to pay income and are suitable for the right investor if properly advised.”

Bas Kooijman, chief executive of DHF Capital, said many employers in the UAE have clauses stating that employees cannot work for anyone else while they are with the company. Residents, however, can still take advantage of a variety of legal side hustles.

For example, he said, people can sell furniture, clothing and other items they no longer use on sites like Facebook Marketplace and Dubizzle.

“You can even browse these pages to buy items at convenient prices before reselling them for a greater return on investment.

Alternatively, you can earn Dh3,000 to Dh15,000 a month using sites like Fiverr for freelancing, or part-time jobs with companies looking to promote their products in venues such as shopping malls, supermarkets and events – it depends Depends on when you work and who you work for,” adds Kooijman.

DHF Capital said the second remuneration plan introduced by National Bonds meant the more people saved, the more they could earn, resulting in a guaranteed profitable income.

“Diversifying your portfolio with real estate investments, gold, digital currencies, stocks, bonds, foreign exchange, etc. can help you earn a second paycheck later in the short or long term future – depending on how aggressive you are Save and how patient you are.”

Rupert J Connor says that in the UK the recommended amount to save for retirement is 5% to 20% of income.

“But that doesn’t leave much room for investing in something to secure a second paycheck, especially given the current rising cost of living. In this case, perhaps by reducing their monthly retirement savings, they can create Short-term savings to create opportunity. However, individuals should always be cautious as not all investment properties, speculative investments or side ventures are guaranteed returns,” says Connor.

According to Bas Kooijman, data shows that 45% of UAE residents have not yet started saving for retirement, although 44% expect to retire by age 55 and 63% expect to retire by age 60. Furthermore, 40 percent of UAE residents will only start saving for retirement in 10 years or less.

“The recently launched second salary scheme may change this, but for now, UAE residents can do more to ensure they are well prepared for their golden years.

“While gratuities are a useful aid in retirement, the amount you will receive when you leave the company depends largely on the time you spend there and your salary. If you don’t touch your honorarium before, there’s a good chance it will disappear before you leave the job.

“However, if you switch jobs regularly, you can repeatedly use that fee to invest in assets that multiply your income so you are better prepared for retirement,” he said.