Real Estate, one of the safest and profitable markets in Kuwait. Even when investing in bad real estate projects or land, you would atleast get your moneys worth. Before twenty years ago, okay thats to long lets say before 10 years ago, 1997. Who knew what is now called: Salam, Zahraa, Hateen a desert  “jnoob el surra” would become what it is, a crowded fully packed residentail area. Now prices range from 180,000kd to 250,000kd for a 500m squared plot of land. Such land in 1997 was about 15,000kd!!! In ten years time that small plot of land became a gold mine. Many people know exactly what i’m saying right now and may even say that what i’m posting is nothing new, your right! but what we never see is the future vision. So some guy in 1997 saw such an opportunity and bought lands for 40,000kd at that time. and most probably his family members said “waaaih laish sharee eb hal bar” very simple for the nay sayer to say, but that plot of land now costs about one million KD! i’m not a real estate expert and i provided such an example of future investing only, so relate what i said with what you do in your daily life. Plan ahead dont just wait when everything becomes expensive and its too late to invest. Well think about it, there are no signs or green light that shows you the perfect time to invest. So sometimes you have to take risk, most probably its worth it!

Okay so this is my true future vision of the region, i work in an investment company so my example will relate to such a subject. From Dubai to Kuwait and the countries in between are being called emerging markets, many international investors would love to come to Kuwait Stock Exchange and other bourses around the gulf region to invest. So insider trading and non fundamental transaction will shrink very fast. Compliance issues are growing by the day, regional money is folowing into Kuwait by the millions (the Wataniyah buyout). Now Kuwaiti banks are looking for mergers, to go regional and expand. NBK is an example, with acquisitons in Turkey and Egypt. NBK even totaly controls QNB, Qatar National Bank. Such small transactions is the puzzle that bieng put together. So my advice is invest in IPO’s, land in the GCC. A friend just bought Arabia Air shares from Kuwait, he did not even need to go to Dubai. Please ask if you have interest in investing but do not understand what i have said above.

 

This post is only for National Bank of Kuwait (NBK) customer, sorry other folks. not a great fan of NBK but they do have a good reward service for their credit cards with shops around Kuwait. This requires the use of your credit card with no charges and your are the person to benefit! will explain: the trick behind the idea, so you enter an NBK participating shop, like any of AlShaya restaurants and retail shops, then when decide to make a purchase dont use your ATM card use your NBK credit card. You’ll most probalby get a discount and for every 10kd you spend using your credit card you get back 1kd, okay its a small amount but after some time you get a free gift voucher with about 30kd (3ookd must be spent on the Credit Card) to spend in AlShaya stores. the catch is, as soon as you make the purchase, when you get back home log on to NBK.com and pay the amount due on the credit card. When you pay the amount you have purchased earlier, you do not get charged interest on you credit card and got use of the gift voucher benefit and sometimes get a 20% discount on certain store.(Master card usage at Sarai restaurant offers  a discount) So be smart, control your spending and use this reward programme for your benefit.

NBK participating stores:

Flex gym, Burger Boutique, IKEA, Most of Alshaya shops and restaurants like Totaly Fish, Gaucho Grill, Sarai, TGI friday, Ruby Tuesday and much more, check out the participating link above.

We all have standing orders with banks, and pay our Showtime phone bills, buying cigarettes, internetconnections, gym subscriptions and i’m sure others have different monthly subscription out there. But when we calculate all such bills they become big number and reality sets it. So lets calculate some numbers: a bank standing order charges you 2 kd per month, so in five years you would get charged 120kd  (2kd multiplyed by 60 months) Showtime would charge you an average of 13 per month and per year that totals up to 156kd, your phone bills average may reach 50kd per month that reaches up to 600kd, my gym charges me 50 per month that also reaches 600kd per year, my internet connection is about 23kd per month reaching a 275kd per year, this all totals up too 1655kd per year! .. See most of these places would charge you in such a way to keep you feeling its a small amount that wont really effect your income but in the long run they do  (1655 ways that they do:p). I’m not saying discontinue what you’ve got, but make sure that your realizing what you paying  over the years for such small amounts, MTC does that very often, making its services sound very cheap by charging you monthly 2 kd or whatever on nonsense service, yah i just remembered my saving plan from MTC charges me another 27kd per month add that to my 1655kd, thats 27*12= 324 +1655 totaling to 1979kd! i realy do not understand how that is called a savings plan! 

Last week i have read an article in al Qabas news paper claiming that newly working Kuwaitis are saving nothing for there future. I will explain a simple way of saving money and very beneficial at the same time. Maybe some heard about it and some did not, i have two friends working in the Health insurance field in Kuwait. Both are in the largest two companies in Kuwait. Al Ahliya & Gulf Insurance: so what do these guys offer, an insurance plan starting 10 years and up to 20 years, the installments can start from 30kd up to the amount you want. The main benefit here is lets say i made a policy for up to 20 years and with a payment of 50 per month. In 20 years time, the amount i saved is about 12,000kd (50kd mutiplyed by 240 months) but in reality there is an interest rate of about 8 to 9%(which fluctuates) added on each installment, and reaching the 20 year mark, you would get about another 10,000kd. So that would total up to 22,000kd, the ten thousand you got is from interest accumulating all these years. Then offcourse there are other benefits like life insurance and health insurance etc… but the main point here is dont waste your time with stupid looser accounts like the Dana or Jawhara, which are provided by the local banks to lure your money in. I have been working in the financail & banking field in Kuwait for 5 years now, take my advice. Some may say 20 years is a long wait, okay what about one your blessed with a child and start saving 3okd for him up too 20 years, when he just graduated from high school, the insurance money you saved!, pays for his college tuition fees, get my point! think ahead not just today and tomorrow. All my friends are on the same plan, some even have installments up too 200kd per month. If you require more detail or an unbaised point of view, email me or just go ahead and call them. 

Most working Kuwaitis and expats have credit cards, some have 3 or 4, i personally have one. I will explain same basic attributes about credit cards, interest rates and installments. Each credit card comes with an annual fee, normal cards come with lower fees, golden and platinum come with higher fees. ie: the normal visa card goes from 30 to 40 kd annual fee per card, so if you got a mastercard and a visa card, you’ll get charged about 70 or 80kd per year, golden cards reach up to 60 in fees and platinum up too 100. Okay so imagine you have about three cards, your getting charged about 120kd per year. All you need is one credit card, when traveling get another incase something happens to the first one, and thats IT. You do not need 4 credits cards to buy a Shirt or whatever, Visa and Mastercard are exactly the same and are available all over the world. My personnel choice is a MasterCard because they are the 2nd in place, so they tend to offer discounts and other benefits to try to beat Visa. The fees are done; lets jump to installments and a twist of interests:p . All local banks in Kuwait when using a credit card, take an installment percentage of about 8%, these are not charges or fees, they are the pure installment taken from the bank because of your usage. So ie: my c/c limit is lets say 500kd and i bought something for 200kd, my installments would be about 16kd(8% multiplyed by usage amount=200kd) but a small amount will be added and thats the interest, so then most local banks charge 13%APR annual percentage rate. But some banks change them from time to time. So 13% divided by 12 months =1.09% per month is the fee. So to not get you confused lets get back to the 16kd installment above, and add the interest of 1.09% monthly (about 2.180kd,  200kd multiplyed by 1.09%) so your total bill in the bank account will show ”18.18okd” not 16kd. Now most of you think this is a small amount yes, wrong because now imagine when some have c/c with limits about too 1000kd or 5000kd, now the 13% looks scary especially when you know that local banks in Kuwait charge about 7% on loans and we are getting charged 13% on c/c. Ask your self did we ever see an adin kuwait showing us the interest rate or APR?!!  and c/c is like a loan in your pocket, does not feel like a finacial burden like going to the bank to get a loan!  

An APR included ad.

So most loan customers in Kuwait are in the dark about loans, and when trying to find more info, you get different answers. So here goes: first i’m going to talk about two kinds of loans and these loans only serve Kuwaiti customers(will discuss expatriate loans in later posts) The local banks in Kuwait all provide the same kind of loan structure, they slightly differ and are called with different names. The well known loan is a consumer loan, and mostly called consumer loan, this is more beneficial loan for a customer because the interest is taken at the beginning,and when payed in full, the bank will give you something back, but with charges. To calculate a consumer loan, you must multiply your salary plus da3m el 3amalah(if working in the private sector) by 15 times, thats the max you can get, So lets say my salary is 500kd +240kd(da3m el 3amalah)=740kd times 15=11,100kd. thats the max i can take. But because this is a consumer loan you get less because the bank deducts the interest from the start, and the max duration is 5 years or 60 months. The good thing about this loan is that when you come in two years and pay the rest of the outstanding amount, the bank pays you back the interest he took from the start. Such consumer loans have fixed installments, it never changes even if the central bank of Kuwait increased its interest rate, this is another plus. Now comes what some banks call the family loan, this loan is only requested when lets say my salary totals to 740kd and with the consumer loan i can only get11,100kd, but what i need is one kd and above more…maybe 12,000 or 20,000kd. So whats the max limit here is you multiply what ever salary you have by about 47 times, so in my case the max i get is 740kd times 47=34,780kd. But such loans can reach up too 15 years or 180 months and with our interest rates, you payback about double the amount. So if i went in the bank and got that loan, my installment will be half of my salary which is 740 divided by 2 = 370 for 15 years paying back an amount of 60,000kd! Yes 60,000kd. (will explain interest rates in later post if you folks are interested) This loan has two installments why? because the bank cuts your installment into two parts, the first is the interest(covering their part of the 30,000) and the other little larger chunk is the principle amount (your original 34,780). Thats why you get two installment showing in the balance account. Such loan when payed in full later on, you loose your interest because its being taken each month and not from the start! and when the central bank increases interest, you installments go up too. If you have anymore questions post them or just email me directly because this is such a large subject.    

Just to be clear here, your Visa or Master card are credit cards, and your ATM card is the Knet card. So whats the difference when your traveling abroad and using them both, ATM cards in Kuwait are very safe, only is some one else has your pin number ofcourse. But abroad your ATM is really unsecure, why because first of all its not insured by Visa or Master Card, what do i mean by insured is; if some one stole your credit card and used it in some store, when you claim to your bank that it was stolen, Visa & Master Card international would repay you back or when your in Kuwait and get a recipet that you gambled in Malaysia, and ofcourse you did not:P yah sure…you would send a claim to your bank and your bank proves that you are  in Kuwait, then you would get reimbursed. But with your ATM its different, if you have lets say 3000kd in your bank account, and your ATM gets stolen in London, and this guy goes to the London theater inviting everybody in the street to watch ” the blue man show” you end up getting nothing. Your ATM is not insured and AND its the one that hold the cash. So my advise here, always use your credit card for purchases and use your ATM for cash withdrawals only!

  

Some of you out there know what an IPO is and some dont, this post will explain the IPO age we are in. Kuwait stock market have been exploding with news about IPO’s, and many people are making huge amounts of money. Let me explain what an IPO in general means: it stands for Initial Public Offering, its when a company need to raise capital(funding) or just newly established (needs funding too). There are two kinds of IPO’s, public and private. The public is an example of Bank Boubyan, and Al sour Company. The private is Villa Moda & Al Alamiyah for computers. So whats the difference: the public IPO takes only one year to get listed on the Kuwait Stock Exchange(KSE) and only authorized by the Amir himself. But the private is when such companies like Al Alamiyah apply’s to get listed for the KSE, takes 3 years and its shares are only sold to specific individuals and private investors, thats why you dont here about them much. This was a small brief on the IPO categories, okay the money part. So i know a friend who’s a friend of a friend that tells me that Al Alamiyah are issuing stocks. so i go to their head office, get the application, and buy the stock. Most private IPO’s are sold at 100fils per share, plus a 5 fils extra as fees. Okay if you write down the numbers it will be easier to get. anyways so lets say i bought around 20,000 shares at the above price which totals to 2000kd plus fee would sum up to 2100kd.  Then waited for the listing in 3 year time and on the same day, it reached 0.380fils. Now multiply your 20,000 shares by 0.380 fils= that would reach a 7600kd from your original 2000kd that you invested back 3 years ago. Now let you imagination go crazy and lets say hmmm i bought 10,000kd worth of alamiayh stocks, in 3 years i would sell them for 38,000kd! Is that a better investment than buying a porsche cayenne, hey got it cash in three years! But hold on here, risk is always involved in such situations. You have to understand what you getting into here; from where did i get the 10,000kd, is it a loan or my savings? If its a loan then you have to calculate a 7% interest rate yearly( will discuss in later posts) what happens if you need the cash within the three years? If its a bad company or carried really bad news before listing, the price can plummet below your original 100fils. So be wise research then invest in your future, just remember we are still in the IPO era! If you need more details visit the KSE website and find the investment companies websites and what they offer.

Picture taken from www.arakeen.ch

We all now that Kuwait and its society is living largely on loans, i mean it all over realy, 87% of Americans are in debt, with credit cards and mortgages. But its always good to know that some have better options than others. I will explain the difference between banks (Gulf bank or NBK) in Kuwait and financing companies (Commercial facilities Company), So for what ever reason your taking a loan is your personal decision, just one thing, not on an expensive car that will loose its resale price in 2 years. Anyways will talk about the benefits of loans in Kuwait later posts, but for now i’ll explain why is it better to take a loan from CFC rather than local banks in Kuwait. In banks when you take a loan, and lets say your installment is 200kd for example on 48 months (4 years), if you worked hard this year and got a raise of 140kd, and would like to pay 200+140 totaling 340kd installment: here are the benefits with CFC, you cut down the years to 3 years, meaning you jumped from 48 months to 36 and you pay less interest! this is the major benefit the interest part. I’l explain when you took the loan for lets say 7000kd and the interest added by CFC is 2500kd on a 48 month plan totaling to 9500kd, when paying an extra 140kd each month you’ve cut down interest too 1500kd changing your loan from 9500 to 8000kd on a three year plan of 36 months. To do just that you dont have to go and sit with somebody there, you just walk to the counter and pay you 340kd installment. But with local banks thats impossible, because you cant pay, they deduct the amount from your bank account and if you came up and wanted to pay extra 140kd, they will tell you that you have to pay a 3 percentage charge for paying earlier! ofcourse there is more detail why people prefer banks over local financing companies but will explain later because it will be a long post. All the numbers above are not calculated  correctly and just there to prove a point. Please spend wisely!