Pixy
10th Dec 2003, 21:10
Almost the end of the year and as I keep track of my earnings and outgoings, here is a reality check for anyone interested in a Middle East job. I’ve been here for 9 years so this does not include the big expenses involved in relocating.
In Dirhams I earned 7.8% more than 2002. This was due to a 3% step in salary and a generous bonus from the company (8 weeks - Thanks). However in Euros I earned 13% less. This was worked over an average exchange rate for each year. If calculated on December’s rate to the previous year average it would be 17% less
With regards to expenses, we made a conscious effort to cut back - less non-essential toys, less eating out, no club membership (thanks to EPC!), minimal house help etc. After this total expenses rose 5%. However when examining the last quarter this was in the order of 9%
Some interesting things regards to where the money went. 8% on education – that is, paying for 2 kids’ education shortfalls, extracurricular activities etc. Supermarket bills up by 11% over the year, again mostly in the last quarter.
My provident fund has broken even with a good year compared to the previous bear market. It gained almost 27%. However ignoring contributions this year, the money in the fund showed a 1% drop against the Euro. It would have been better off under a mattress – however that’s not one of the funds options.
Property here has hardly risen in Dirham terms for houses over the past year. Possibly some increase for apartments. In Euro terms this is a loss particularly if 10% of the price was imported for the deposit. There are fears of an overcapacity in accommodation. The pros and cons of property in Dubai I’m not qualified to comment on.
The squeeze is on in other areas too as everything from basic salary, to untimely death/disability benefits are effectively reduced against other currencies. Even private insurance schemes all paid for in other currencies delve deeper into pockets.
Finally the big reason we are all here - disposable income or savings. I saved less in Dirhams this year. Not by much - 0.5%. However adjusted for Dubai inflation, that’s a lot less. Almost everything here is imported from Europe, Asia or Australia/NZ. Curiously even the American imports climb as these are affected by Dubai’s own inflation which is a relatively high by-product of its own success and growing business and tourist profile. In Euro terms savings were 20% less which figures, looking at the last year USD/EUR.
The Economists vary on how much further the US dollar will fall. Some estimates are downright scary. However they do agree the fall will continue as the dollar is overvalued and America deficit is huge. Furthermore there is no recovery forecast but rather a stabilisation at the adjusted level as the US takes its place amongst other rapidly growing economies. They say it’s a good thing for the world economy. Sure isn’t much good for me – I don’t plan to live in the USA. Guess I’ll spend more time out here where the sun shines – permanently.
:(
In Dirhams I earned 7.8% more than 2002. This was due to a 3% step in salary and a generous bonus from the company (8 weeks - Thanks). However in Euros I earned 13% less. This was worked over an average exchange rate for each year. If calculated on December’s rate to the previous year average it would be 17% less
With regards to expenses, we made a conscious effort to cut back - less non-essential toys, less eating out, no club membership (thanks to EPC!), minimal house help etc. After this total expenses rose 5%. However when examining the last quarter this was in the order of 9%
Some interesting things regards to where the money went. 8% on education – that is, paying for 2 kids’ education shortfalls, extracurricular activities etc. Supermarket bills up by 11% over the year, again mostly in the last quarter.
My provident fund has broken even with a good year compared to the previous bear market. It gained almost 27%. However ignoring contributions this year, the money in the fund showed a 1% drop against the Euro. It would have been better off under a mattress – however that’s not one of the funds options.
Property here has hardly risen in Dirham terms for houses over the past year. Possibly some increase for apartments. In Euro terms this is a loss particularly if 10% of the price was imported for the deposit. There are fears of an overcapacity in accommodation. The pros and cons of property in Dubai I’m not qualified to comment on.
The squeeze is on in other areas too as everything from basic salary, to untimely death/disability benefits are effectively reduced against other currencies. Even private insurance schemes all paid for in other currencies delve deeper into pockets.
Finally the big reason we are all here - disposable income or savings. I saved less in Dirhams this year. Not by much - 0.5%. However adjusted for Dubai inflation, that’s a lot less. Almost everything here is imported from Europe, Asia or Australia/NZ. Curiously even the American imports climb as these are affected by Dubai’s own inflation which is a relatively high by-product of its own success and growing business and tourist profile. In Euro terms savings were 20% less which figures, looking at the last year USD/EUR.
The Economists vary on how much further the US dollar will fall. Some estimates are downright scary. However they do agree the fall will continue as the dollar is overvalued and America deficit is huge. Furthermore there is no recovery forecast but rather a stabilisation at the adjusted level as the US takes its place amongst other rapidly growing economies. They say it’s a good thing for the world economy. Sure isn’t much good for me – I don’t plan to live in the USA. Guess I’ll spend more time out here where the sun shines – permanently.
:(