I am Mr Axe who is an IT professional trying to achieve his FIRE (Financial Independence Retire Early). I am 38 years old and not yet reached my FIRE. I have a BSc in Computer Engineering and a Masters of Science in Enterprise systems. I do not have any rich parents. All the money I have made is through savings from my salary working hard in my career path. I have been able to save somewhat significant money after moving in to Dubai as there is no income tax here. It was the first time in my life I had some significant cash in my account (+$100K). Next question for me was what to do with this money? Where can I invest and how can I prepare myself to become financially independent?

Well that is the million $ question! I have asked around friends and my personal bank advisor what to do with it. I had a meeting with the bank’s investor’s guy and he convinced me to put my savings in to an investment account with Metlife Life Insurance. I have transferred my money and selected some mutual funds that was recommended based on my medium risk profile. I was expecting to make some good money based on historical stats the bank guy showed me. Fast forward 6 months when I checked my account I realized that I was at loss. Yes you heard it right I was almost at 10% loss. Then I was furious and called the bank guy and asked him what is going on. He recommended me to change some funds due to Asia’s situation, I followed the advise and few months after I was even at more loss. That is when I decided to become financially aware and decided to learn about finance for investment.

I started with reading my first financial book called Random Walk Down Wall Street recommended by a friend. Then I understood that cost of investment is the most important factor when you invest. Doing it yourself has the best return as you cut the middle man. The book was such an eye opener for me so I wanted to read more books and learn all about investment. I have read many other books but Random Walk remains a very special book in my heart. I strongly recommend you buy a copy and read it. I will do a future blog post on other books I will recommend you to read.

I have discovered a group called Bogleheads who were following the principles of Jack Bogle who is the founder of Vanguard. It is all free content and great start up kits. You can visit access their kit here . After reading on Bogleheads website and following the community I realized that all the insurance products for life savings are like a SCAM. The mutual funds you choose have on average 5% annual management cost + the insurance company management cost e.g. 1.5% (Metlife or Zurich). Yet there are thousands of people investing in these products. This had to stop. I opened up a brokerage account with Saxo and Interactive Brokers and transferred all my new savings in to these accounts. How can I quit my Metlife without breaking the bank any further. I was already down in my investment and there are hefty management fees to be paid. For early termination of the policy first year hit is 8%, second year hit is 6% and so on. How could I be that stupid to join this? I am telling you all my mistakes so that you do not fall in to these traps like I did. Stay away from Mutual Funds and Life Insurance schemes like Zurich or Metlife. I took the hit and terminated my contract in the second year with a 6% early termination fee. I was initially investing in passive Vanguard Index funds like VUSD tracking S&P500. In the long term 10+ years expected annual return from Index Funds are around 10% including the dividends. I then discovered Government Bonds with high yields around the World. I am keeping most of my money in these bonds now. I also discovered some ways to beat the market by stock picking. I allocated 10% of my portfolio to this strategy. I call it The Money Making Machine. Now I am making a total return of more than 10% annually in USD in my brokerage account. I am now managing a $1M portfolio of my life savings on my way to early retirement at the age of 40. Instead of blindly investing in Index Funds I will show you how to be successful in Emerging Market Government Bonds investing to have fixed income and pick some stocks that would beat the index.