How a person making 50K AED per month went bankrupt and ended up in jail!
So this is a true long story – I would try to narrate this in a concise manner whereby a complete book 📕 can be written on this person’s life which spans for last 16 years now in Dubai.
I know someone who is confined to prison in Dubai 🇦🇪 because of multiple financial troubles in his life – most of which are inflicted upon by his own grave mistakes. Readers should take this as learning opportunity and make sure of not indulging in such practices.
The story started in 2007 when he landed for his first job in Dubai for a brokerage firm where he was making 20K AED+ in 2007, which is a handsome amount considering he was in his early 30s back then. Just to provide context, he has always been associated with real estate and stock market all his career.
Although he choose a lavish life for the income he generated at that time, but this extravagant life was not the reason for him being behind the bars. His timeline in Dubai & mistakes in general are outlined below chronologically:
- 1️⃣ First major incident: After moving to Dubai, he continued his stupidity, with the first major incident happening in December 2007 – the Benazir incident, when the stock market went nosedive and he was having huge exposure to it with high leverage. He sold most of his stocks even though the market did improve afterwards.
- 2️⃣ Second instance of downfall: April 2008 – With global financial crises, he made 2 mistakes. Both mistakes were of same nature which I discussed here in one of the write up – he tried to catch the falling knife and went all in highly leveraged with drowning stock market and at the same time got himself a very expensive Dubai property booked thinking that he got a very good deal (as prices fell considerably.) This never materialized and his full booking amount sunk due to further slump in property prices! Moreover, for stocks, he purchased at high price and sold low and repeated the cycle numerous time.
- 3️⃣ Third mistake: He has always been a person with attitude, even with neck deep debt he was somehow hanging with his job but turn of events made him kick his job in as well – the only source of income (in 2011)! This was mostly because of ego at the height of financial crisis. Not to mention, by now his salary was around 50K AED + hefty commissions.
- 4️⃣ His revival: Although he was still in loads of debt but he joined real estate domain and after some intense time there, he started making money and started recovering. This was 2014 when he saw that this domain is having the potential to get him out of debt albeit with lot of efforts.
- 5️⃣ Complete recovery: He completely recovered from most of his debt in 2017 and started to live a family life – but yet again! old habits die hard! Just when things were all well, he started his own real estate company.
- 6️⃣ Second phase of life, first mistake: Bitcoin crash! Yes, he purchased large quantity of Bitcoin, in anticipation of growth in value – yet again investing / collaborating with others on the promise of high returns to them and the bitcoin crashed hard – early 2018. He again invested borrowed money for an speculative investment!
- 7️⃣ Second phase of life, second mistake: As he was in real estate – and Dubai was again having some good time in terms of property price appreciation, he invested in 20+ apartments which were about to be handed over in coming few month in anticipation of price appreciation by offering deposit of 20%. Not only that he invested 20% in the form of token but a promise that in case of default for full payment he has to surrender the token amount – yet again (investing borrowed money.) He invested the funds from many of his investors too on different terms.
- 8️⃣ Update as of now: Although, a lot has happened after 2018/19 where the world was hit by pandemic and he was out of job, out of visa, and several police cases on him – but that would be too long to discuss here. Currently he is serving jail term for not paying up debt and has several civil cases.
I have tried to stay as concise as possible, but believe you me, every word in this write up has a full length story to tell which I might narrate time to time.
The important aspects here worth nothing and taking lesson from are as follows:
✅ Never take debt without calculating the collateral – I explained in this video
✅ Never leverage already leveraged item (In his case, he took loan to pay for the downpayment of his property in Dubai in 2008.)
✅ Never involve in more than 1 major investment on leverage / loan (Like he took the risk of investing in real estate, crypto & stocks – all on high leverage)
✅ Never take things for-granted in business, I have not explained above, but he collected unnecessary baggage for his business in the form of expensive office & extra staff which he could not afford. The urge to show off & spend money to impress competitors made him fall big time! Your business only care about bottom line and customer service – everything else can wait.
✅ Never underestimate the power of family! I wont go into the details for this story, surely, things can go wrong – but you should not let your immediate family pay the price of your stupidities.
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