The freedom fund is an important financial tool that gives you the power to become financial freedom. It is a fund for emergencies, saved from your salary after taking care of all your financial obligations.
Invest smart today for a better tomorrow
Smartest investment and life plans in UAE
However, preparing an optimal investment plan requires more than just planting money in some pots. It requires laying out proper foundations that are needed to build a protected lifestyle and a deep understanding of how time will shape your life activities.
Most importantly, in order for you to achieve the best return on your investment in UAE, you need to see the entire picture instead of focusing on small individuals pieces of the puzzle.
Investments and savings, both come down to one sole factor –risk. Diversification of your investment activities goes a long way when it comes to reducing this ‘risk’ factor and maximizing the returns. However, it is essential to extend this concept into your everyday life.
A major part of maximizing the returns as investors in UAE is living a lifestyle that is healthy so that you can realize your long term goals.
Today’s fast-growing and stressful working environments are a contribution to serious health problems.
Making a health insurance investment in UAE beyond the law requirements will help you to protect yourself from an aspect of risk in your strategy for long term savings.
By ensuring adequate healthcare and comprehensive insurance, you provide a guarantee that you can enjoy your other long term investments for as long as possible.
It is good to be clear about where you see yourself in the future as you approach retirement. It is common for many of the working population in UAE to shift to other countries as they approach their retirement age.
The length of the time that you plan to reside in UAE and your anticipated retirement age will define the best strategy for your investment in UAE.
Saving investments provide the best value over long time horizons, so any restriction on the time period will help in shaping the best strategy for you as it may change your risk tolerance as an investor.
For instance, someone at the age of 25 years decides to retire at the age of 65 years after working in the UAE for that entire timeframe can afford to have a higher risk appetite that may bring higher returns. However, someone who is elder in age, or someone who decides to retire at a younger age should be inclined towards investments that are reliable and low risk in order to avoid losing money during their short time horizon.
There is a wide array of options when it comes to making an investment in UAE. Therefore, you should know what suits you the most.
This is a great choice for the working population in the UAE. The main benefit offered by such an investment is stability. It is common in the UAE, for a working professional to have assets in different countries.
Holding an offshore account protects you from risks such as currency fluctuation which makes it a feasible starting point for building a savings and investment plan. Such an account can also protect you from problems related to the financial regulations of your residing country.
In UAE, it is common to hear of a scenario where a working professional loses employment and subsequently the access to the bank account. This threat can be alleviated by investing in an offshore account.
Shares hold an element of risk, especially if you are a beginner at investing. However, at the same time shares have a potential for great returns on investment in a relatively shorter time horizon.
But, it is essential for you to remember the volatility that shares face, even in large companies. The performance varies, and you should not depend on shares alone. Typically, your investments in shares should be for a longer period so that your risk can be offset.
The key to potential profitability is diversity. Instead of concentrating all your investments in one company, it is sensible to spread your investments across different companies, as this helps in spreading the risk as well.
The advantage of investing in shares is that you can purchase shares in very small amounts which makes it easier to achieve a well-diversified portfolio even for the people with a lower budget.
Bonds are a form of debt that is issued by organizations including companies and government for a pre-specified period of time and are considered to carry a lower risk as compared to shares. The bond yields offered are linked to interest rates. There are two kinds available to you:
The yield reflects the risk, therefore, the longer the investment period, the higher will be the risk and the yield.
One advantage of opting for fixed-rate bonds is that the yield is assured and you are aware of what you are getting. The disadvantage, on the other hand, is that you may miss out on the interest rate changes.
If you are a beginner, it is good to get financial advice before opting for any option because there are multiple kinds of bonds that vary with the risk and time horizon.
They are a great option for an investor looking at spreading the risk, as they include a combination of different kinds of investments from different companies and sometimes even different markets across the globe.
Funds can vary but as investors, in UAE you can choose low, medium or high-risk options depending on your risk appetite.
The advantage of this investment option is that the fund manager aims to make all the key investment decisions according to your risk appetite.
The Optimal Strategy
When you take care of your health, you ensure that you are there to enjoy the results of your efforts. Through understanding your time horizon and how it affects the risk of an investment, you can create an optimal plan to suit your financial situation as an investor. By opting for diversification, you build a profitable and reliable strategy that can make your money earn for you.
All the above considerations accumulate to provide you a strategy that suits your custom needs with the minimum risk and maximum potential return.