Saving is setting money aside for expected future use that could be a short-term goal like planning a holiday or a long-term objective like retirement or paying for your child's education. While saving is a good habit, simply leaving it with a bank may not earn you a healthy rate of return to afford the kind of lifestyle you desire.

While investing involves greater risk, it also offers greater growth for your money. A regular savings programme is a good way to start with personal investing. A disciplined way to put aside a percentage of your income on a monthly basis, investment savings programmes can help you benefit from dollar cost averaging.

Before deciding on a direction to achieve your financial goals, understanding your timeframe would determine the right blend of assets to match your needs.

Investment Timeframe

• 1 to 3 years is short-term
• 3 to 10 years is medium-term
• 10 or more years is long-term

Simply by investing a fixed amount of money at regular intervals over a period of time, you can lower the average cost of investments. More shares can be purchased during a market downturn and fewer shares during an upswing. Over time, the cost per share evens out. A regular monthly savings programme is a great way of taking advantage of dollar cost averaging.

At the end of 5 months, 65 units have been purchased worth $10 each making a total of $650 while your investment outlay is only $500, giving you a profit of $150.

At the end of month 5, the average cost of each unit works out to be $8.20. Before you commit to a monthly savings programme, below are some important pointers to consider.

• Portability
• Currency
• Tax Efficiency
• Investment Timeframe

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The views expressed in this article reflect the personal views of the writer. The information provided herein is general in nature and does not have regard to the specific investment objectives, financial situation or the particular needs of any person. Professional Investment Advisory Services Pte Ltd and its affiliates, directors, associates, connected parties, employees and/or representatives may own or have an interest in the securities covered in this article. This article shall not be construed as an offer or solicitation to buy, sell or subscribe for any investment product and collective investment scheme or the giving of advice thereof.