Save, big spender
Picture, if you will, the middle east. If you are most people, – and statistically, most of you are – then you had the picture of clear sand dunes in the desert with armed masked travelers on a string of camels trekking to their dark green canvas tents. Now picture Dubai. Not exactly the same image, now, is it? Steel skyscrapers and artificial landscapes, air conditioned buildings all throughout. Now, Dubai is actually IN the Middle East. You knew that, but you still had such contrasting perspectives about the area.
If someone were to ask you why people move to the middle east, you’d start out thinking “People move to the middle east??? Really?”. But in a few seconds, you would have decided that the question was actually why people move to the UAE/ Dubai… So why do people move to Dubai? Statistically, at least half of you thought of one reason – Money!
In case you’re confused here, let me illustrate why the UAE is seen as a good market for making money. Take the everyman from a random country. The everyman diligently works his everyfinger to the everybone trying to provide for his everyfamily. He gets a job that pays him 5000 units of currency… it could be per month, per year, or per second; it doesn’t matter for this illustration. Before he can start enjoying the fruits of his labour, he needs to shell out a certain percentage of his salary to the Government so that they can invest in shitty infrastructure and corrupt politicians. The income tax. From country to country, the percentage of the income that people have to surrender varies. In the UAE, the percentage is set at a number that is accepted by the working population as ‘just, fair, and balanced’… The rate of taxation is zero. No taxes. If everyman earned 5000 units of currency in UAE, then the everyman keeps to get every unit.
Don’t get me wrong here. I am not against taxes. Taxes are a critical source of revenue for most Governments. And other than the rampant corruption and inefficient money management that seems to foreshadow many Government organizations, I recognize its importance and support the idea. But still… the luxury of having your entire salary to take home… that’s a feeling just beyond compare.
So there is no tax in the Middle East, and conventional logic dictates that you would soon be raking up money by the fistfulls and building yourself a house made entirely out of currency notes.
But conventional logic is wrong. I’ve been working in the UAE for six months now, and despite earning a bit more than I used to, and despite having no taxes to pay, I still have less money saved up than I did back in my old job in India. And I’ll tell you what’s wrong here. Escalation. Principally, people don’t change. A reckless driver who used to crash a run-down station wagon with poor brakes and faulty seatbelts would still be reckless with a Lamborghini with state-of-the-art safety features. He would simply push the limit further. If he used to crash the station wagon going 70 miles an hour, he’d crash the Lamborgini at 200. Back in India, I used to spend my salary on electronics and assorted junk. Here in the UAE, I spend my salary on expensive electronics and costly junk. Either way, the amount you save is more a function of your personality than the actual salary.
The UAE gives you more options to spend your money unwisely. It’s just supply meeting demand. Wider ranges of premium products all around. I’ve already bought a large screen TV, a home movie projector, a laptop, an ipad, a digital media player, and two home theaters, and that’s just for starters. It doesn’t matter how much you earn, the marketing division for major brands are trained to stick their vacuum pumps down your pockets until they pick up every penny, and if necessary, go after what you left behind at home.For some of you, the main question that popped into your head is about the home theaters. Why two of them? Why? Well, don’t ask me. I haven’t figured out a reason yet. My approach to reality hasn’t always been chronological. I plan to do stuff, do stuff, and have logical explanations for the stuff I that do, but not always in that order. For example, I have a sort-of-a plan to buy a humidifier, a dehumidifier, an air purifier, an air conditioner and a room heater and keep them all switched on in the same room and leave them to fight it out between themselves. That’s another plan where I haven’t worked on the ‘why’ part just yet.
There are hopeful theorists out there – my parents, some friends and assorted relatives – who believe that this is just a temporary situation; that I just got carried away in the first few months, and that things would settle down to a more promising pace pretty soon. Wishful thinking. Their expectation is that I will soon tire of spending money and start accumulating wealth until I have to give it away because there’s no space to keep all of it anymore. Call me a skeptic, but even if I were earning that much, I am not convinced that’s a reasonable level of optimism. A more plausible solution would be to direct my spending propensity into things that can be considered as investments. Maybe at some point, I’ll make rational, well-thought of investments – real estate, insurance, mutual funds, stocks… But then again, who knows… maybe I’ll buy more home theater systems.
You never know. Worse yet, I never know. This is the sort of time when most people would just give up and say “Let’s leave it to God”. As good a plan as any, perhaps. But considering that Jesus spent quite a lot of time encouraging people to renounce their worldly posessions, I doubt if he’d be very helpful in giving tips to save money. Perhaps money management advice is best sought from other sources.
Maybe I can just rely on the power of wishful thinking. Many of my friends and relatives are already doing their part. Maybe you can too. Just hope and pray really hard that I don’t get tempted or swayed by any more home theaters. That’d be a good start… I think.