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If creating your overall investment strategy is taking up too much time or becoming overwhelming, you can simplify it by creating a monthly investment plan to fit your lifestyle in the UAE. 

A monthly investment plan is easier to create, simply because planning for a month is easier than planning for a year, five years or even trying to play the market on a daily basis. Once it is set up, you can continue to follow the guidelines you’ve established every month until circumstances require that you change it. 

Today, creating an investment plan is no longer a luxury. Those who want to build wealth through investing cannot rush headlong into the stock market without a plan — that is a recipe for failure. “If you have what you want in mind,” said Tiffany Welka, host of Welka Wealth, a financial planning podcast, “everything that you invest in should be working to push you further toward your goal.”

In this article, you will learn how to achieve this goal-oriented investing by creating a monthly investment plan in the UAE. We’ll consider: 

  1. Determining your investment goals
  2. Creating a monthly budget
  3. Designing or selecting investment portfolios 
  4. Automatically transfer money to your investment portfolios
  5. Measuring the performance of your portfolios 

At the end of this article, you will have a ready-to-go monthly investment plan in the UAE, giving you the tools you need to start crushing your investment goals. 

1. Determining your investment goals

Even though we are focusing on a monthly investment plan, still the first step is to determine your investment goals set within a certain time horizon. 

Whether it is daily, weekly, monthly, quarterly, or yearly, your investment plan(s) should be directed towards achieving some SMART (specific, measurable, achievable, relevant, and time-bound) investment goals.

Blackrock, the number one provider of Exchange-traded funds (ETFs) in the world, has provided an easy way to identify and classify your investment goals: 

  • Long term 
  • Medium term
  • Small to medium term 

Retirement and saving towards property purchase are two examples of long-term investment goals (and we can add financial independence to that, too). Saving towards the education of your children is a medium-term goal and saving for vacation or your dream car is a small-to-medium-term investment goal.

You don’t necessarily need to have all of these goals, but whichever ones you decide upon ensure they are SMART. 

SMART starts with “specific,” meaning you need to put real numbers into your plan. Once specific, it will be measurable. Relevancy considers if the specific investment goal fits into your overall life goals, while achievability relates to if those goals are realistic given your income level. 

Next, to be time bound, an investment goal must have a deadline or fixed time period. “I want to buy my dream car of $50,000 in five years” or “I want to retire by 59 with $250,000” are two examples of SMART goals (assuming they are relevant and achievable for the person in question).

The next step is to create what economists call a scale of preference (SoP). Since resources are scarce (no one has enough money to achieve all they want), you need to prioritise the investment goals that are most important.

The scale of preference for Investors A and B might look like the following: 

(Note: 1 represents the most important and 5 the least important)

There is no right or wrong scale of preference; it all depends on your priorities and unique lifestyle choices. The key is to ensure that your scale of preference reflects your life’s goals and personality. 

Task 1: Before you proceed, identify your investment goals, make them SMART, and then prioritise them using a scale of preference. 

2. Creating a monthly budget

Now that you have sorted out your investment goals, the next step towards building your monthly investment plan in the UAE is to create a monthly budget. 

The most popular monthly budgeting system is the 50/30/20 rule popularised by Elizabeth Warren, a US senator.

In this system, 50% of your income goes to necessities like rent, groceries, transportation, utilities, insurance, childcare, etc. Also, 30% goes to wants like eating out, travel, entertainment, and gifts to others. The remaining 20% goes to savings/investment.

Therefore, in this system, if your income is $5,000 per month, $2,500 will go to needs, $1,500 to wants, and $1,000 to savings/investment. 

monthly investment plan in UAE

If you want a more bottoms-up approach that is custom made for you, start by making a list of your monthly needs and wants (use the 50/30/20 rule to identify the items that belong to both categories). Then put a number on each of those items (how much do you spend for each item in a month?). Aggregate needs and wants and subtract the total figure from your income. What remains is what you have available for savings and investment based on your current lifestyle.

[Clever Girl Finance has seven budgeting templates you can consider.]

Now, the big question is if what is available for savings/investment, based on your current lifestyle, can help you achieve your investment goals. If the answer is yes, you are good to go. If it’s no, you might need to consider ways you can cut down on your monthly expenses. 

[For eight simple steps to cut down your expenses in Dubai, read, “12 Hacks for How to Save Money in Dubai Like A Resident”]

This custom-made approach allows you to explore your full savings/investment potential. Why save only 20% if you can do more by cutting down on your expenses? In fact, Jacob Lund Fisker, an advocate of the Financial Independence, Retire Early (FIRE) movement who retired at 33, suggests saving 60% to 80% of your income, what he calls extreme savings.

Is it 20% or 60% to 80%? There is no right or wrong answer. Use the bottom-up approach to determine how much you can save to achieve your investment goals and still retain your personal quality of life. But remember that “it’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for,” as Robert Kiyosaki, author, Rich Dad, Poor Dad, puts it. 

Kiyosaki pioneered the idea of the Rich Dad mentality versus the Poor Dad mentality. Engendering a Rich Dad mentality requires observing a budget and working hard on savings; a Poor Dad mentality does the opposite, and is usually seen in a spendthrift person. 

Task 2: Create a monthly budget and determine the portion of your monthly income you can save, especially for the purpose of investing. 

Allocating your savings/investments

By now, you have determined the portion of your income available for savings/investments every month. The next step is to determine what portion you will allocate to which investment goals. 

At this stage, you will need to return to your scale of preference. 

Take the first item on your scale of preference and then consider what portion of your monthly savings you need to achieve that goal within the assigned period. For example, if the number 1 goal is to retire at 59 with $100,000, how much do you need to invest monthly to achieve that goal? 

[For more on retirement planning, read, “Retirement Planning:Why It’s Important To Start Early”]

Once you have allocated the portion of your monthly savings necessary to achieve the first goal, you move to the next goal, and on and on till you exhaust your monthly savings. If there is any goal(s) outstanding at this point, then you need to increase the portion of your monthly income you are saving to cater for that goal.

Below is an example of how this will look like: 

investment plan in the UAE

In the event that the money you can allocate to a goal won’t be enough to achieve it (say $100 per month won’t be enough for Investor A’s vacation goal or $200 for Investor B’s property purchase goal), you will either need to increase your monthly savings, modify the goal (extend the deadline or reduce the amount you want to spend it), or change your scale of preference. 

Task 3: Allocate your monthly savings to your investment goals in the order of preference

3. Designing or selecting investment portfolios

Once you have allocated a monthly figure to each goal, the next step on your monthly investment plan is to select investment options in the UAE where you will put the money. 

This approach of selecting investment options (investment portfolios) based on the goal you want to achieve is called goal-based investing. 

[For more on goal-based investing, read, “What is Goal-Based Investing? Achieving Real Results With Your Investments”]

The investment portfolio you select for each goal will depend on the risk and return of the portfolio, your risk tolerance, the nature of the goal (long term, medium term, short to medium term), and your time horizon. 

For example, if you are 25 and you have a goal to retire by 65 (long-term goal over a long time horizon), you should invest in a more risky portfolio with higher returns. On the other hand, if you want to pay for the college education of your 14-year old child who will start college at 18 (short-to-medium-term goal with a short time horizon), you should invest in a less risky portfolio even though the returns will be lower (here risk is more important than returns).  

In the former case, a portfolio consisting of 80% stocks and 20% bonds is appropriate while in the latter case, a portfolio of 80% bonds and 20% cash will be more suitable. 

The best thing to do is to speak to your financial advisor who will help you select or design (if none of the available options will fit you) a portfolio appropriate for each goal based on the above factors. 

For example, Sarwa, a digital investment platform in the UAE with access to financial advisors, will ask you to complete a survey about your investment goal(s), risk capacity, risk tolerance, and time horizon. 

Sarwa Invest, a hands-off investing product, will then use the Modern Portfolio Theory (designed by Harry Markowitz, a Nobel Prize winner in Economics Science) to select or design a broadly-diversified portfolio of the best investment options in the UAE that will help you achieve that specific goal.

[For more on how to build an investment portfolio, read, “Building an Investment Portfolio from Scratch: The Ultimate Guide“]  

4. Automatically transfer money to your investment portfolios

Creating a budget is one side of the coin, sticking to it is the other. It’s easy to decide to keep 20% (or what have you) of your monthly income, but actually sticking to this is another ball game. 

To solve this problem, George Clason, author of The Richest Man In Babylon, suggested that the first thing to do when you receive your income is to pay yourself.

That is, saving should come before spending. Instead of overspending and then cutting from your savings, you should save first and then force yourself to spend what you already budgeted. 

Warren Buffett crystalised this idea into one important statement: “Do not save what is left after spending, but spend what is left after saving.”

How do you best achieve this? 

Automate your investments (a process now known as an automatic investment plan). Once you have selected an investment portfolio appropriate to each goal, you can choose to automatically deduct money from your checking account to your investment account on a particular pre-selected day (preferably the day your monthly income arrives). This is one of the features that Sarwa provides. 

Instead of relying on pure willpower to save before you spend, you can allow technology to do the heavy lifting for you while you focus on sticking to your budget. 

Task 4: Contact a reputable financial advisor to select or create investment portfolios for your investment goals and set up an automatic investment plan

What about emergencies?  

So far, we have assumed that you already have an emergency fund. If you don’t, focus on creating one before you start investing in your investment portfolios.

An emergency fund is a stash of money you access when emergencies — medical payments, car repairs, unexpected travel, etc. — arise. The popular rule of thumb among experts is that you need to save between three to six months worth of your living expenses (which corresponds to the 50% part of the 50/30/20 budgeting system)  as an emergency fund.

Once you have this ready, then you can begin to invest as we have discussed so far. 

[To learn more about why emergency funds are important and how to set up one, read, “How To Start An Emergency Fund That Is Right For You: Smart Planning To Mitigate Financial Troubles”]  

5. Keeping your investment portfolios efficient

Every investment portfolio contains a certain asset allocation (e.g., 80% stocks and 20% bonds). However, as time progresses, that asset allocation formula can change if some assets are rising and others are falling (80:20 can turn to 70:30 if bond prices are rising and stock prices are falling). 

If the portfolio is an efficient portfolio, created through the Modern Portfolio Theory, it’s essential you maintain the asset allocation formula. The process of restoring a portfolio to its original efficient allocation is called portfolio rebalancing.

“Rebalancing — the constant portfolio monitoring that restores asset classes to their target allocations by selling assets that have appreciated and adding to those that have declined — is at its core a risk-minimising strategy,” according to CNBC.  “It’s not meant to increase returns, though it has proved to do that, too.” A 2014 study, published by the American Association of Individual Investors Journal, also showed that a regularly rebalanced portfolio outperformed its non-rebalanced counterpart.

You must ensure that your investment portfolios are being periodically rebalanced to keep them efficient. Digital financial advisors like Sarwa smartly rebalance every portfolio to keep it efficient.

Keeping emotions in check

While you need to keep an eye on your portfolio, this does not mean checking it out every 12 hours to see if it’s rising or falling. The problem with that — checking your portfolio frequently — is that you can panic and sell off your investments when you see a big daily drop. 

No one loves to see their portfolio value going down. However, especially for your long-term goals, the market will always fall and rise in the short term. What matters is that your portfolio is well-structured to achieve your goals as at when due.

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments,” said Charlie Munger, vice chairman of Berkshire Hathaway.  “You need to keep raw, irrational emotion under control.”

So keep your eyes on your goals and ensure that your portfolios are being constantly rebalanced.   

Task 5: Keep your emotions in check and only ensure that your financial advisor is rebalancing your portfolio when needed. 

Now that you know how to create a monthly investment plan, it’s time you start creating one that fits your unique needs. 

[Schedule a free call with a Sarwa Wealth Advisor and we will help you create a monthly investment plan designed to achieve your investment goals.] 


  • Determine your investment goals and rank them in order of preference.
  • Create a monthly budget and determine what percentage of your income you want to save every month.
  • Allocate this amount to each of your goals and select or create investment portfolios for each goal.
  • Use an automatic investment plan to automatically transfer money to your investment plan
  • Monitor your portfolio and use rebalancing to ensure they remain efficient. 
Want to know more, talk to our advisory team they will be happy to help. Ready to invest in your future?
Important Disclosure:

The information provided in this blog is for general informational purposes only. It should not be considered as personalised investment advice. Each investor should do their due diligence before making any decision that may impact their financial situation and should have an investment strategy that reflects their risk profile and goals. The examples provided are for illustrative purposes. Past performance does not guarantee future results. Data shared from third parties is obtained from what are considered reliable sources; however, it cannot be guaranteed. Any articles, daily news, analysis, and/or other information contained in the blog should not be relied upon for investment purposes. The content provided is neither an offer to sell nor purchase any security. Opinions, news, research, analysis, prices, or other information contained on our Blog Services, or emailed to you, are provided as general market commentary. Sarwa does not warrant that the information is accurate, reliable or complete. Any third-party information provided does not reflect the views of Sarwa. Sarwa shall not be liable for any losses arising directly or indirectly from misuse of information. Each decision as to whether a self-directed investment is appropriate or proper is an independent decision by the reader. All investing is subject to risk, including the possible loss of the money invested.