Public service announcement: reading this article is going to hurt. Your emotional well-being is at risk.
Even though this might depress you, I'd like you to please spend the next few minutes working out how much money you have earned over your lifetime. Just a ballpark figure.
Whatever you make for a day's work, chances are you'll be surprised by what transpires. It's probably a small fortune.
You'll most likely be asking yourself: "Where did it go? "What do I have to show for it?"
How much you made isn't the main focus today. My hope is that you come away with another perspective on money, life and what you value.
A lot of what you earned went on paying rent or a mortgage, buying food and having fun. Maybe you bought valuable possessions too.
But what about savings? Investments? There was definitely money left over after your life's basic expenses.
Now add up what you own, have invested in and what you have set aside. Is it the equivalent of 20 per cent of what you made since you started being paid an income? If not, then what proportion?
This sobering exercise is what I get people to do after we work out how much money they would need to have stashed away if they were never to work or earn again - whether enforced or by design. Stick with me and you'll see why.
The value of your retirement fund depends on many variables, such as where and how you end up living, what you'd eat and do in the way of entertainment and hobbies, and whether you have dependents or not.
Let's assume you want to live as you do today, forever. This is how you work out the lump sum you would need:
You add up all your expenses over a year - and I mean everything - and multiply it by 25.
It's based on the so-called safe withdrawal rate, which is set at 4 per cent.
This is how it works: if you have that (massive) lump sum set aside, in theory the interest it would generate would allow you to withdraw 4 per cent of it every year without the capital being depleted.
Ergo, no matter how long you'd do that for - how long you live - you'd have that 4 per cent every year, for life.
The lump sum is a significant amount of money, no matter how frugally you believe you will live when the time comes.
Doing the figures with today's expenses serves two purposes. One is that it familiarises you with a way of working out the maths. Two, once you're over the initial shock of how large an amount it is, chances are you start thinking of what you can cut back on - and that's a good thing. This is where a shift can happen regarding our relationship with what money means to us and what it can give us.
People who go through the exercise say the figure scares them, that they feel they will never be able to have so much money in their life.
Next we look at how much money was earned throughout their lifetime. And compare the two.
The point is, you do earn. But what do you do with the money?
Let's look at some stats, using incomes in the United States as the example simply because figures are readily available. According to the US Census Bureau figures for August of this year, the average salary in America is $43,000 a year.
Assuming this stays the same throughout the working career of 40 years, as a rough way to account for inflation, then the average American would earn $1.72 million in their lifetime.
How does this compare to your earning power? Do you get double? 10 times as much? Half as much? Adjust your figures accordingly.
Now let's see how much they have to show for what they earn. The graphic to the left shows us the median net worth of Americans in various age brackets for September last year.
How does your figure for your age group compare to you?
You might be very happy with what you find out, but it's more likely that you won't be.
Whatever the figure is, don't let it depress you - what's done is done - but do let it inspire you to do better, starting today. Having a financial goal - be it short term or longer - often helps. What's yours? The bottom line is: think before you spend and keep more of what you make. Yes it's that simple.
Nima Abu Wardeh is the founder of the personal finance website cashy.me. You can reach her at nima@cashy.me and find her on Twitter at @nimaabuwardeh
Follow us on Twitter @TheNationalPF
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh359,000
On sale: now
Company%20Profile
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Company%20profile
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PREMIER LEAGUE FIXTURES
Saturday (UAE kick-off times)
Watford v Leicester City (3.30pm)
Brighton v Arsenal (6pm)
West Ham v Wolves (8.30pm)
Bournemouth v Crystal Palace (10.45pm)
Sunday
Newcastle United v Sheffield United (5pm)
Aston Villa v Chelsea (7.15pm)
Everton v Liverpool (10pm)
Monday
Manchester City v Burnley (11pm)
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Background: Chemical Weapons
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
The%20specs
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COMPANY%20PROFILE
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Mercedes V250 Avantgarde specs
Engine: 2.0-litre in-line four-cylinder turbo
Gearbox: 7-speed automatic
Power: 211hp at 5,500rpm
Torque: 350Nm
Fuel economy, combined: 6.0 l/100 km
Price: Dh235,000
Ibrahim's play list
Completed an electrical diploma at the Adnoc Technical Institute
Works as a public relations officer with Adnoc
Apart from the piano, he plays the accordion, oud and guitar
His favourite composer is Johann Sebastian Bach
Also enjoys listening to Mozart
Likes all genres of music including Arabic music and jazz
Enjoys rock groups Scorpions and Metallica
Other musicians he likes are Syrian-American pianist Malek Jandali and Lebanese oud player Rabih Abou Khalil
Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
Zayed Sustainability Prize
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5