Is investing really for me? Short answer: Yes!

You’ve never done it before, but you’ve heard the stories from your adventurous friends. You’ve probably gotten curious late at night and decided to do some investigating about it. What you discovered probably even left you a bit confused, but now you can’t stop thinking about it and really want to try it…

We’re talking, of course, about investing.

You may ask: But is investing really for me? Isn’t playing the stock market something that’s basically a full-time job? Who am I, Gordon Gekko?

In order to ease you into the world of investing and make the whole thing a bit less daunting, we got Sarwa’s own residential Head of Wealth Advisory Danny Jabbour to tell us why investing isn’t just for big shots.

So first things first: When’s a good time for someone to start investing?

“As soon as they possibly can,” Jabbour says. But before you begin, you should make sure you have a financial nest egg that’s separate from the money you’ll be putting into the market. Jabbour recommends putting aside at least a couple months’ salary in cash- “It’s considered your emergency fund. And that money should be held in cash. Once you have that, then it’s time to start accumulating your money for investing,” he says. And in order to successfully invest, you have to consider the money you’re putting into the market as untouchable – this isn’t your “spontaneous weekend getaway” fund. “You want to accept that you’re not going to be using that money for quite some time.”

How much do I need to start investing with Sarwa? And why should I even be investing with Sarwa?

“The minimum amount for us to deploy the funds is $500 US dollars,” Jabbour says. “Investing in this region is seen as a luxury, whereas our goal is to democratize it and make it accessible to anyone that is looking to better their financial future. Many of the wealth managers here won’t look at you unless you invest a minimum of $100,000. Most people that want to start investing early don’t have that yet.”

He also stresses that Sarwa makes investing in the UAE accessible and more client-friendly. “We have a fee-based model, whereas the landscape here is almost entirely a commission-based model,” he explains. “We charge 0.85% a year, but we charge a fraction of that amount per month. We take that 1/12th and we charge that on the last day of the month on the monthly average value of the account. That puts us on the same side of the table as our clients. If they’re doing better, we’re doing better. If they’re doing worse, we’re doing worse. That’s what makes sense, that’s how it should be.”

Jabbour also explains that a Sarwa account holder enjoys full liquidity. “If someone wants to open up an account today, they can close it tomorrow. There’s no minimum investment they need to be putting in every month or quarter. It’s up to you! They could put in $10,000 and just let it sit-even though we recommend continuous deposits to achieve your goals.”

In addition to the initial investment, users also need to have a Passport or UAE Drivers License and proof of residency.

Okay, so we established that I don’t need to be the CEO of a Fortune 500 company in order to start investing. But is investing also useful for someone with short-term saving goals?

Absolutely, Jabbour says. “When you sign up for an account, our users are greeted by a questionnaire of 15 questions. One of the questions is: What are you saving for? What’s your time horizon? And the shorter the time horizon, the more conservative the portfolio is going to be. So if someone is saving for two years and they just want to see their money grow, they’re going to be putting it in something conservative that is most likely going to beat inflation, at worst.”

“The objective is for our algorithm to place an individual user’s risk tolerance, and that will determine which portfolio they’re going into. And one of the key questions in there is their age and their time horizon. Once the questionnaire is completed, it’s going to give out a simulated portfolio for people with that profile”.

–Sarwa is the MENA’S first DFSA regulated automated investment platform

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