Salary Is Fragile Income: A Cash Flow First Approach

Anees Abdullatif calls himself a Chief Cash Flow Strategist. It is a title he created for himself, and on this episode of the Dubai Stars Podcast he explains exactly what sits behind it. He spent years climbing the corporate ladder, from banking to the tobacco industry, then L'Oreal Middle East, then running companies inside a distribution group in Dubai. In 2018 a restructuring ended that, and the monthly salary stopped.

The idea this episode is really about is simple and uncomfortable. A salary is income you do not own. Anees says cash flow is what comes out of assets you own, and that the two are not the same thing. Everything else in the conversation, the business mistakes, the trading losses, the way he thinks about profit versus cash, comes back to that one distinction.

In this episode

0:43 Why he calls himself a Chief Cash Flow Strategist

1:21 Salary versus cash flow, and why one is fragile

2:56 The corporate ladder, and what happened in 2018

6:27 Losing the salary at 44 with a mortgage

8:53 First year mistakes and the e-commerce inventory trap

12:04 Profit on paper versus cash in the company

18:32 Real estate, bonds and selling options

29:09 The 87 percent year, the minus 90 percent year

32:41 Emotions, news, CPI and staying out of the noise

A salary is cash flow built on a position you do not own

Anees does not say a salary is bad. He says it is a form of cash flow sitting on a fragile base. You are trading time for money, and you do not own the position. That means it can stop overnight for reasons that have nothing to do with you.

He lived the version of that most people fear. He was around 44 or 45, had a large mortgage because, as he puts it, when you earn a good salary the banks here give you whatever you want, and he had no other source of income. He describes a life built on certainty, the SMS at the end of the month telling you the salary is in, followed by total uncertainty. What saved him was savings, enough to feel he could carry on for the next 12 to 18 months.

The practical takeaway is not to quit your job. It is to stop treating one income stream as a plan. If the only thing between you and zero is a payroll run you do not control, the first job is to build a buffer and then convert some of that buffer into assets that pay you whether you show up or not.

Corporate habits do not transfer straight into a small business

The first mistake Anees names has nothing to do with money. It is mindset. He came from multinationals with corporate governance, big teams and clearly divided responsibilities. He walked into a company that was, in his words, a three man show.

His skill had been managing a team and delegating. Suddenly there was no team. He dealt with a third party logistics provider the way he would have in the corporate world, and quickly realised he was a tiny, insignificant customer to them. He had to adapt to their way of doing business rather than expecting the reverse. He says it took some time before they built a system that worked for both sides.

The lesson for anyone leaving a big company: your leverage came partly from the logo on your card. When that goes, your process has to bend to the people you now depend on, not the other way around.

Profit on paper is not cash in the bank

Anees is direct about the confusion that kills small companies. People see a profit figure and assume they can take it out.

His e-commerce business is the example he gives of getting this wrong himself. He wanted UAE and Saudi, was trying to set up something in Germany with an end game in the US, and knew that meant carrying a lot of inventory. Over two years he ended up with roughly 80 percent of his capital tied up in stock. Turnover was slow, outgoing exceeded incoming, and there was no corporate finance manager to call for a temporary loan. That company was not a success. The first one was.

He also describes advising a board in Oman. The balance sheet showed a lot of retained earnings. As CEO he told them he could not pay dividends because there was not enough cash in the company, which was operating on incoming cash plus loans from the board and the banks. The board's response, as he tells it, was to ask why he was holding their money. His answer: on paper you made money, but there is no accessibility to cash.

Takeaway: read the cash position before the profit line. Profit is an accounting outcome. Cash is whether you can pay next month.

Pay yourself a salary, then decide about the dividend

Asked for a rule on how much an owner should take out versus reinvest, Anees refuses the tidy percentage. He says it depends on the business, on whether the receivables are contractual or the work is ad hoc, and he notes that in consignment businesses payment can land between 60 and 90 days.

His own framing is cleaner than a percentage. If he is operationally running a business, he assigns himself a suitable salary the company can absorb. He does not treat that as a percentage of revenue. Then at the end of the fiscal year, whatever dividend has been generated becomes a separate decision: reinvest into expansion, a bigger team, better premises, or take it out and put it into something that generates passive income.

He also gives rough industry context from his own career. In distribution, margins are largely fixed, and he describes being confined to something like 25 to 30 percent total margin, with an efficient operation landing between 6 and 8 percent net. In retail, he considers a store in good shape when retail profit is at least around 20 to 25 percent of revenue. Those are his numbers from his experience, not universal rules, and he repeats that it depends on the type of business.

The year he lost 90 percent is the year his method changed

Anees started investing in 2018 after joining an academy with a branch in Dubai, based out of the US, that teaches trading and investing across asset types. Like most beginners, his approach was buy low, sell high.

His first year he says he made around 12 to 13 percent and was disappointed because he was thinking about doubling his money. The following year he says he made around 87 percent. The year after that, minus 90 percent. In his words, it was all gone. Asked whether that felt like gambling rather than following fundamentals, he says absolutely.

That is where the philosophy hardened. He stopped buying in the hope of appreciation and organised around recurring income instead. His passive side is real estate, where he says he does not buy to sell, he buys to rent out and cash flow, plus commercial bonds, including ones the industry labels junk that he says can pay between 8 and 10 percent. His semi passive side is options, where he sells rather than buys, collecting a premium and keeping it if the price he selected is not breached by the end of the contract.

He describes selecting setups with a roughly 90 percent probability of success, targeting around 1 to 1.5 percent a month, with some strategies going to 4 or 5 percent. He is explicit that the upside is capped in exchange for that probability: this is not, in his words, hit and run to become a multi-millionaire overnight. Nine out of ten works on average, worst case eight. These are his stated results and his approach. Nothing here is a recommendation, and none of it is a promise of returns.

Emotion is the barrier, so build a method that does not need a prediction

Anthony puts it to him that everything in markets is driven by human emotion, and describes opening his crypto wallet on the day the conflict between Russia and Ukraine broke out and seeing red before he had even opened the news. Anees agrees. He calls emotions the biggest barrier in investing and says the closer you get to a neutral approach, the more successful you tend to become.

His practical defence is to remove the need to be right about direction. He says with the way he sells options, the market can go up, down or sideways, and what matters is the strike points he sells at. So he generally does not follow news. He does check two things: earnings dates, which he avoids because he has burnt his fingers there and finds no predictability, and major releases like CPI and PPI, because those move markets. On a CPI day he takes the back seat and watches. If the market reacts negatively, he treats the higher volatility as an opportunity to sell further out and still take his 1 to 1.5 percent. He says he is not a greedy person.

The transferable principle has nothing to do with options. Build a process that survives without a forecast. If your plan only works when you correctly guess what happens next, you do not have a plan, you have an opinion with money on it.

Watch the full conversation with Anees Abdullatif at the top of this page. And if the part that stayed with you was the buy to rent, not buy to sell idea, and you want to talk through how that works in Dubai, come and have a conversation with me. No pitch, just a straight discussion about what you are trying to build.

Worth hearing in full

"You don't own this position. So the salary that you are earning today, it can immediately stop overnight because of whatever reasons." (1:56)

"I always lived my life with plans and with certainty, the certainty being at the end of the month you get that SMS, your salary is in, and then all of a sudden there is total uncertainty." (7:27)

"Yes, on paper you made money. There is no accessibility to cash." (13:11)

"I do not buy to sell, I buy to rent out, to cash flow." (18:55)

"The following year I think I made like 87% return. The year after that I made minus 90%. Boom, it was all gone. And that's when I completely changed my whole entire approach on investing." (30:14)

Watch the full episode on YouTube, and find Anthony's books and more at anthonyjoseph.com.