Three Bucket Investment Approach in UAE

The greatest and most beneficial investing plans are usually straightforward to understand and implement. 

The investment strategy for the three buckets is an easy way to invest your funds. 

In order to meet different financial goals, it considers your investing demands in different life phases. 

Three Bucket Investment Approach 

Achieve Financial Security 

Bucket One is a short-term goal for your emergency savings. Savings should be in liquid or near-calculated investments in this category.  If you are single or a working couple without children, I would recommend having emergency savings of at least three months’ household income. 

We would recommend 4 to 6 months of household income if you are a family with children. At a time when all of the globe is locked up due to Covid-19, those who have enough emergency funds are financially safe. Without much effort, they are more assured about the storm. This bucket is designed to protect you from fear and credit in situations (Achieving Financial Security) 

You can put more money in this bucket for short-term purposes like annual holidays, electronics such as smartphones, laptops, television etc. after reaching the emergency savings level (3- 6 months income).

Maximum savings should be allocated to this bucket until the emergency threshold is reached (3- 6 months income). You can assign 20-25% of your money to short-term goals after you achieve the threshold. 

In UAE Short Term Investment 

National Bond investing is an excellent option given the security, liquidity and a slightly improved return on investment they provide. 

National bonds are straightforward to purchase and national bonds may be purchased online via exchanges of monies and institutions. AED 100 is the lowest investment. In order to prevent monthly costs, it should nonetheless be kept at a minimum for AED 3000. 

Achieve Financial Well-being 

In order to attain short- to medium-term financial objectives such, Bucket 2 is an attacking investing approach; 

  • Property down payment 
  • Your ideal vehicle purchase 
  • Save your dream holiday 
  • Immobilien investment 
  • Payment of mortgage and other obligations 
  • Save to establish a company 

In the UAE 

With the coins or bars, the best investment funds like ETFs and Funds certificates are medium term investment. 

Gold remained flat in 2017 but in 2018 and 2019 saw a significant rise. Given that global equities appraisals are high, other asset classes might be safe haven if their value decreases.

Achieve Financial Independence 

But sadly the most significant is Bucket 3. Bucket 3. This method focuses on sustainable goals with a 5-year period, such as retirement saving; 

  • Save for Higher Education for Children 
  • Save to return to home for good 
  • Life insurance investment ( Term Insurance, Whole of Life or Endowment Plans) ● Saving for the marriage of the girl 
  • Planning for legacy 

It’s no surprise, after many years of debt, to read several stories on gulf reports of people who left the UAE empty. 

It is because individuals disregard the bucket and focus on short-term financial objectives and credit in an emergency. 

In the UAE 

UAE provides higher rents than many established property markets. Investors can get gross rents of between 5-9 percent on average. The price of property per square feet in Dubai is cheaper than in many other cities in the world which makes it one of the best Investment options


It is essential to employ an independent financial consultant to assist you select a most appropriate investment or insurance plan based on your goals, your time horizon, your appetite for risks and your present financial status. 

What about you, what about you Invest your short-term and long-term financial objectives?