Reviewing Saudi Arabia's Seven Years Under Crown Prince Mohammed

 Crown Prince Mohammed bin Salman’s tenure has been marked by significant changes in Saudi Arabia. Since his appointment in June 2017, he has pursued ambitious reforms through the Vision 2030 initiative. Here are some key highlights:

Economic Diversification: Vision 2030 aims to reduce Saudi Arabia’s dependence on oil revenues by diversifying the economy. Initiatives include privatization, investment in non-oil sectors, and the creation of a $2 trillion sovereign wealth fund.

Social Reforms: The Crown Prince has worked to modernize societal norms, empower women, and promote entertainment and tourism. These efforts have faced resistance but are crucial for long-term growth.

Infrastructure Development: Projects like NEOM, a futuristic city, and the Red Sea Project demonstrate the country’s commitment to infrastructure development and attracting global investors.

Youth Empowerment: Vision 2030 focuses on creating jobs for the youth population. Encouraging entrepreneurship and innovation is essential for sustainable growth.

Global Engagement: Saudi Arabia seeks to enhance its global standing through diplomatic efforts, cultural exchanges, and international partnerships.

Crown Prince Mohammed bin Salman has significantly transformed Saudi Arabia since his appointment. Let’s delve into some key aspects of this transformation:

Vision 2030: Launched in response to declining oil prices, Vision 2030 aims to diversify the Saudi economy. It includes establishing a $2 trillion sovereign wealth fund (the world’s largest) and privatizing sectors such as airports, education, and health.

Vision 2030, Saudi Arabia’s ambitious economic diversification plan, faces several challenges:

 Oil Dependency: The Saudi economy heavily relies on oil revenues. Transitioning away from this dependence requires significant effort and investment.

Cultural Shift: Vision 2030 aims to transform societal norms, empower women, and encourage entertainment and tourism. However, these changes encounter resistance from conservative elements.

Youth Unemployment: The plan seeks to create jobs for the growing youth population. Achieving this goal amidst economic reforms is challenging.

Private Sector Development: Encouraging private sector growth and innovation is essential. However, bureaucracy and historical reliance on public sector jobs pose obstacles.

Global Competition: Saudi Arabia competes with other countries for foreign investment, talent, and market share. Attracting global investors requires overcoming perceptions and geopolitical concerns.

Non-Oil Revenues: Since 2016, non-oil revenues in Saudi Arabia have nearly tripled. The country is also experiencing steady growth in non-oil exports, rising from 2.2% in 2017 to 2.5% in 20182.

Investment and Spending: Crown Prince Mohammed bin Salman introduced the “Partner” program to strengthen private-sector collaboration. The total investment expected in the national economy until 2030 is 12 trillion riyals, excluding government spending and private consumption3.

Metropolitan Development Strategy: Salman’s development plan for Riyadh, known as MedStar, focuses on economic, environmental, infrastructural, cultural, and urban aspects. It aims to diminish the power of the religious establishment and diversify the economy.

Overall, Salman’s leadership has been marked by ambitious reforms and economic diversification, positioning Saudi Arabia for a dynamic future.

 Mega Projects in Saudi Arabia

 

Project Name	Value	Total value on commissioned Date	Total Area	Completion Date
MASAR MAKKAH	$9.8 Billion	$8.34 Billion	1.38 million sqm	2030
RUA ALMADINAH	$37 Billion	$,8Billion	1.5 Million sqm	2030
KING ABDULLAH ECONOMIC CITY	$27 Billion	$13 Billion	1.7 Million sq	2028
JABAL OMAR	$5.6 Billion	$4 Billion	2 Million sqm	2026
ALULA	$15 Billion	$6.5 Billion	22,500 sq km	2027
NEOM	$500 Billion	$237 Billion	26,500 sq km	2030
RED SEA GLOBAL	$23.6 Billion	$21 Billion	28,000 sq km	2030-35
THAKER MAKKAH	$7 Billion	$1.3 Billion	4 Million sqm	2030
MARAFY	$5 Billion	$400 Million	4 Million sqm	TBC
ROSHN	$1.9 Billion	$1.8 Billion	4 Million sqm	2026
SEVEN	$1.4 Billion	$400 Million	4 Million sqm	2026
JEDDAH CENTRAL	$20 Billion	$4.5 Billion	5 Million sqm	2030
JEDDAH ECONOMIC CITY	$30 Billion	$1.7 Billion	5.3 Million sqm	TBC
KNOWLEDGE ECONOMIC CITY	$8 Billion	$3.35 Billion	6.8 Million sqm	2025
SHAMS AL AROUS	$2 Billion	$500 Million	863,000 sqm	2025

 Source: Knight Frank, MEED Projects

Drive Smarter In The U.A.E: Understanding The New Traffic Regulations

 The UAE Cabinet has endorsed a novel federal traffic regulation, as announced by Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President, Prime Minister, and Ruler of Dubai.

This new regulation will introduce modifications to the categorization of vehicles and the employment of contemporary technologies on the roads. The objective is to synchronize with the swift evolution of the global transport sector. The Dubai Ruler has indicated that the legislation will facilitate the increased adoption of autonomous and electric vehicles. It will also evaluate different personal transportation methods and the general dependence on transport systems. The law specifies which groups are ineligible for driving licenses, the conditions for license suspension, and the rules concerning vehicle insurance, inspections, and driving school operations. Although the full details of the law are pending, it is anticipated to encompass:

•  Vehicle classifications
• Driver duties and licensing conditions
• Autonomous vehicle regulations
• Driving school guidelines
• Vehicle insurance and inspection protocols

 The federal traffic law is set to capitalize on the technological advancements that mark the UAE’s roadways.

Sheikh Mohammed proclaimed this law following a UAE Cabinet session he chaired, where numerous issues were considered and sanctioned, demonstrating the nation’s pledge to advancement. 

House Rich, Cash Poor? How Strategic Debt Can Fuel Your Financial Future

Dubai, Sheikh Zayed Road

 The concept of being 'house rich, cash poor' refers to a situation where a significant portion of an individual's wealth is tied up in their home equity, leaving them with limited liquid assets for other expenses. This can be a precarious position, particularly if unexpected costs arise or if there's a sudden need for cash. However, strategic debt can be a tool for leveraging this equity in a way that fuels financial growth and stability.

 By carefully considering options such as home equity loans or lines of credit, homeowners can convert part of their home equity into cash that can be used for investments, business ventures, or consolidating higher-interest debts. This approach can potentially lead to a more balanced financial portfolio, with assets diversified beyond real estate. 

It's important to note, though, that this strategy requires careful planning and consideration of the risks involved, including the potential for increased debt burden and the need to ensure that any new investments yield a return that exceeds the cost of borrowing. With the right approach, strategic debt can be a powerful tool for enhancing one's financial future, but it should be undertaken with a clear understanding of both the opportunities and the potential pitfalls.

 Based on this concept, I am attempting to assess the subject with Robert Kiyosaki's thoughts. In today’s market, where home prices are soaring, acquiring a house poses a considerable hurdle for many. However, for Robert Kiyosaki, the acclaimed author of “Rich Dad Poor Dad,” this task is effortlessly manageable.

 In a conversation with Sharan Hegde, a prominent figure in personal finance on YouTube, Kiyosaki disclosed an astonishing detail regarding his collection of real estate investments. His approach and success in the property market stand as a testament to his investment acumen and strategies that have been widely discussed in his bestselling book.

“I possess a portfolio of 15,000 properties,” declares Robert Kiyosaki, indicating that purchasing a house is perfectly acceptable. However, he distinguishes his method by utilizing debt as a means to finance these acquisitions and strategically managing his finances to minimize tax obligations.

The concept of buying a house using debt and potentially paying no taxes is often associated with strategies employed by real estate investors. Here’s a summary of the key points related to this topic:

 Real Estate Investment: Investors may use borrowed money, or debt, to finance the purchase of properties. This leverage allows them to acquire more assets than they could with their funds alone.

Mortgage Interest Deduction: The interest on loans used to purchase properties can often be deducted from taxable income, which can reduce the amount of taxes owed1.

Tax Lien Certificates: In some cases, investors may buy properties with delinquent taxes through tax lien certificates. This involves paying off the outstanding property tax bill, which may eventually lead to acquiring the property if the original owner fails to repay the debt.

Tax Deed Sales: Unlike tax lien certificate sales, tax deed sales involve purchasing the property itself, not just the tax liability. The buyer inherits the rights to ownership of the property, and a portion of the sale is used to repay the tax debt.

Buying with Back Taxes: It is possible to buy a house even if you owe back taxes to the IRS. However, this can complicate the process of obtaining a mortgage from traditional lenders.

It’s important to note that while these strategies can be legal and financially savvy, they require thorough understanding and careful planning. Tax laws can be complex, and it’s advisable to consult with a financial advisor or tax professional to navigate these investment strategies effectively. Additionally, the ethical and social implications of such investments should be considered, as they can affect communities and individuals in various ways

Real estate investors often take advantage of debt financing to expand their property portfolios. By doing so, they’re able to purchase more properties than if they were limited to their capital. 

The strategy includes several tax advantages: 

Mortgage Interest: The interest paid on mortgages for property purchases can often be deducted from the investor’s taxable income, leading to a reduction in tax liability.

Operational Expenses: Investors can deduct operating expenses related to their properties, including property taxes, insurance, and maintenance costs, further decreasing their taxable income.

Depreciation: This accounting method allows property owners to account for the decrease in value of their property over time due to usage and aging. Depreciation is recognized as a non-cash expense that effectively lowers taxable income. 

Through the use of debt leverage and these tax deductions, real estate investors can significantly boost their investment returns while concurrently reducing the amount of taxes they owe. It’s a strategic approach to maximizing financial growth and efficiency within the realm of property investment.

 Concept of assets versus liabilities as explained by Robert Kiyosaki:

 Robert Kiyosaki draws a clear distinction between income-generating properties and personal residences. He emphasizes that not all properties qualify as assets.

 Kiyosaki bluntly states, “Your dwelling is not an asset.”

 He simplifies the distinction with a straightforward criterion: An asset is something that deposits money into your pocket. Conversely, if it’s extracting money from your pocket, it’s a liability. 

Under this definition, a primary residence doesn’t count as an asset. The typical homeowner, who buys a house to live in, incurs regular expenses such as mortgage payments, property taxes, insurance, and upkeep costs. These outflows represent financial liabilities.