The best investment decision I ever made: Magda Habib and Pakinam Kafafi

In each issue of Money Matters we ask senior members of our community for investment advice based on personal experience. Speaking to us this week are Magda Habib, Vice Chair, Dawi Clinics and Co-Founder Fawry, and Pakinam Kafifi, CEO TAQA Arabia.

Magda Habib

The best investment decisions I ever made were investing in real estate in Maadi and not cashing out my stock options when I left Fawry. My husband and I stretched ourselves early on to buy real estate in installments. That forced us to put aside money each month and not overspend. Once you get into that habit the ball starts rolling. I never flipped real estate. It was just about pushing myself to save a little bit more and invest in rental property that can provide income for retirement.

I don’t consider myself a savvy investor in companies or in the stock market. It’s not my cup of tea, I’m not good at it, and it doesn’t fit my risk appetite. I’m old school. There was a time when I was very active with Cairo Angels but I have to admit, I didn’t make the best choices. I put some early stage money in several companies, none of them worked out. I attended the pitches of some of the companies that flew but unfortunately I didn’t invest in them.

In my own business and on a personal level it was always just a mindset of savings. Throughout our lives, my husband and I had a very solid principle to not spend more than we earned. We live well but never go into debt. I use my credit card like a debit card.That commitment makes you eventually grow your wealth slowly. We don’t need more than that.

When I left Fawry, I had stock options that I held on to because I could afford not to sell and they appreciated very nicely. I still have them so as long as the company is doing well I’m keeping them. I haven’t made huge amounts of money through investments. The fact that we are able to live well and retire well is largely because we had good careers.

Pakinam Kafafi

The best investment decisions I ever made were investing in real estate inside and outside Egypt, followed by a small amount of money that I put into gold (I wish it was more). The real estate that I purchased in the early 2000’s in Cairo and the North Coast is what has increased in value the most.

I made money on real estate investments outside Egypt not because the value of the properties went up but because of the exchange rate. I earn my income in Egyptian pounds. In order to buy real estate abroad I was forced to convert the pounds into sterling at a much more favorable exchange rate than we have today, so in that sense it was a good investment.

I don’t recommend buying real estate today unless you plan to live in it or you plan to use it to generate rental income. So either invest in commercial real estate to rent, or residential real estate for short-term rentals like Airbnb. Otherwise it doesn’t make sense because prices are high, maintenance costs are skyrocketing and real estate tax rates are increasing.