What is your monthly savings?
Hmm.. the constant fight between liquidity and growth. Where do you invest your money- lock in for growth for a long tenure like 5 years or put it in liquid funds; where you can use it in the next 3-6 months. The answer is almost the same everytime- a Combination. Now that combination is like your locker’s combination- it’s very personal!
For example: For Siddharth, who is 32 and steadily earning and who has growing commitments- EMIs, children’s fees et al- he might think Growth is the last thing he wants as he has these commitments in the next few months. However, there needs to be a balance and Voila, EPF steps in- he is saving for his retirement- albeit forcefully. The fact of the matter is that he has even forgotten about it when he discusses with his advisor, till the advisor asks him about EPF. Now, think again, when I ask you what your monthly savings are? Am sure this time you even added the contributions to EPF on a monthly basis – by both you and your employer.
Back to the question, what should you do? Well, first sort out your goals- Chronologically and prioritywise. Then, put down monthly amounts to each of these goals and see where you need to invest how much. Its pretty fun, especially if you love MS Excel the way I do. Put, some amount to long term goals so that you give it the advantage of time and of course, some to medium term; and then the biggest chunk invariably goes to short term goals. Well, not necessarily, but mostly.