Smartest investment and life plans in UAE

How to Start Investing with Little Money

By PolicyBazaar

Invest smart today for a better tomorrow

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Published: 15 January 2020Last Updated On: 19 January 2021

Smartest investment and life plans in UAE

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A lot of people drop the idea of investing because they think investment needs a lot of money. Interestingly investing small amounts of money can reap huge rewards or returns if done correctly. Investment in UAE can be started with very little money which eventually grows overtime to provide returns.

The key to creating wealth is to inculcate healthy habits- like saving small amounts from your earnings periodically. Getting yourself accustomed to the habit of living on a bit less than you earn will help you to start the process of investing your earnings. The earlier you inculcate this habit the earlier you’ll be stable financially down the road of life. Even if don’t have much, you can let the compound interest do its job by growing the principal amount that you have invested initially.

Investing offers much bigger benefits when you have a bigger financial portfolio, but that necessarily does not mean that you cannot start investing with small amounts of money. The market is filled with several investment options where you can start investing with amounts as low as AED 200.

The concept of micro-investments in UAE is getting popular with time as it allows beginner investors to start investing and build a better and diversified investment portfolio.

According to a recent survey by Amazon, the Majority of residents (38%) in the UAE are only able to save 10% of their total income, while only (23%) residents of the UAE are able to save about 10 to 25% of their total earnings.

As an individual, you can choose any of the investment in UAE, listed below to start with little money-

  • Stocks are the most popular investment in UAE option for investors who want to start with small amounts of money. The option is quite affordable and you can purchase shares from reliable companies for less than AED 200.
  • Similar to stocks, ETFs or exchange-traded funds can be purchased at an affordable price from a stockbroker and can invest in as many shares as they wish. ETFs diversify and enhance the value of your financial portfolio. Diversification of the portfolio helps to mitigate financial risks during phases of market instability and is independent of the initial investment amount.
  • Mutual funds provide investors with the opportunity to invest a part of their savings which is done with assistance from a fund manager who will help you to select the best stocks/securities that can potentially grow your money with time.
  • Gold has been a form of financial investment since time immemorial. Gold provides a hedge against inflation and weakening the value of international currency and proves to be a good financial investment.
  • Investing in commodities is another option that you can consider while investing with little amounts of money. Commodities may include oil, natural gas, livestock, agricultural products, renewable energy, etc. By investing in commodities your returns are dependent on demand and supply balance.

If you are starting your investment journey it is recommended that you should avoid options like Forex and future trading as they involve high degrees of risk which are meant for investors who have an appetite for risks along with returns.

In a Nutshell

Financial investments in UAE are a must for every individual who is earning. Irrespective of the amount you earn monthly or annually you should always consider investing your money into some sort of investment plan or product so that you can receive some returns periodically.

Investing your earnings enhances the value of your financial portfolio and protects against emergencies which require immediate financial assistance.

One should start investing early in life to ensure that they have sufficient time to grow their savings, which will help them to live their lives to the fullest.