Jul 20, 2023
 in 
Financial Literacy

Can Investing Shield You From the UAE’s Overspending Culture?

Tax-free income.

Brilliant blue skies almost all year round.

Breathtakingly beautiful views and venues.

And a Minister of Happiness and Wellbeing. Yes, a government position entirely dedicated to promoting happiness!  

You only need to Google the benefits of living in the UAE, and you’ll find dozens of reasons the UAE is loved by its lucky locals and is a top sought-after region for expats.

Of course, we can’t speak about living in the UAE without mentioning the high level of lavish living too.

For those who enjoy the finer things in life, the UAE is renowned for the prominence of flashy cars, designer fashion, Michelin-starred dining, extravagant shopping, and exotic getaways or luxurious staycays.  

But this opulence comes at a price, and it’s a tough lifestyle to maintain if you’re not seriously minted.

An overspending culture, as prevalent in the UAE, is a significant concern as people can find themselves financially overextended in the pursuit of the idyllic ‘Grammable life. Those not well-versed in the world of finance, may find themselves with crippling credit card balances or drowning in debt. This is why financial literacy is so important and one of Nemo’s many roles.

One way to protect yourself from the temptations of instant gratification and frivolous spending is to take steps to protect your financial well-being through investing.

3 ways to build healthier spending habits with investing

1. Exercise financial discipline

Investing demands a certain level of financial discipline. By adopting a disciplined approach to investing, you’ll find you automatically instil better spending habits. To prioritise investing, you can choose to allocate a portion of your income toward wealth creation rather than mindless consumption.

To cultivate financial discipline, consider creating a budget that includes a specific allocation for investments. Set realistic goals and commit to regularly investing a fixed amount. This habit will help you resist the temptation to overspend and reinforce the importance of your long-term financial stability.

Remember, you only need to start small to start! Nemo offers investing options from as little as $1 through fractional shares.

2. Focus on your future (long-term goals)

While it’s so easy to fall into the trap of short-term thinking and immediate gratification when it comes to spending, investing encourages a mental shift to prioritising long-term financial security. Whether it's buying a home or funding your child's education, investing can provide the necessary financial resources to achieve these goals.

By focusing on the long-term potential of your investments, being returns and compound growth, you can become less susceptible to the allure of impulse purchases. Investing trains your mind to consider spending in terms of the impact on your financial future, promoting thoughtful decision-making and a stronger resistance to overspending in the moment.

3. Unlock the potential to build wealth and financial security

Investing is not only a means to protect yourself from overspending culture; it can be a powerful tool for building wealth and financial security. The compounding effect of investment returns can help to unlock your money’s potential to grow exponentially over time, which can bolster your financial stability and security in the long term.

When looking at investment opportunities, be sure to consider options that offer the added benefits of diversification and passive income streams too. For example, exchange traded funds (ETFs) can be a great opportunity to boost the diversification of your portfolio with a single purchase, and dividend-paying stocks may offer regular dividend payments to investors.

Nemo.money makes finding these investment opportunities super easy! Check out the following 5 nemes that curate ETFs and dividend paying stocks:

Popular ETFs

ETFs can track industries, sectors, or indices. These are collections of companies that you can invest in like a single stock on Nemo.money - just instead of one, you're investing in the whole list.  Peruse the most popular ETFs.

Dividend ETFs

Dividend ETFs are an excellent choice for those who are unsure about which individual stocks to buy. Instead of analysing and selecting specific companies, you can invest in a dividend ETF that represents a collection of dividend-paying stocks. Check out dividend-paying ETFs.

Popular Dividends Stocks

Research has shown that dividend-paying stocks, especially those of popular companies, have historically delivered higher total returns and provided a level of stability during market downturns, making them attractive options for long-term investors seeking a combination of growth potential and income generation. See the popular dividend stocks.

Livin’ on Dividends

Enjoy the best of both worlds – the potential for your investments to grow over time while receiving regular income through dividend payments. These dividend kings have increased their dividend payout for at least 50 consecutive years. Discover the dividend kings.

High Yielding Stocks

Consider this golden opportunity to explore the universe of high-yield stocks like real estate investment trusts (REITs) and business development companies (BDCs) that can potentially deliver both attractive income and capital appreciation, contributing significantly to total return. See high yielding stocks.

"Too many people spend money they haven't earned ... to buy things they don't want ... to impress people that they don't like." –Will Rogers

In a world seemingly obsessed with overspending, investing offers a reliable defence against the financial pitfalls that can come from mindless consumption. By building financial discipline, focussing on your long-term goals, and capitalising on the potential for wealth creation, investing can empower you to take control of your financial future. Pave the way for financial stability, security, and the realisation of your dreams by finding investment opportunities with Nemo.money today!