How to invest Rs. 10 lakh?

There are numerous ways to invest Rs. 10 lakh, and each of them have their own pros and cons. Since the investment goals and risk appetite differs from person to person, lets talk about a person in their 30s who has to invest for their children’s future.

A good rule of thumb is to diversify your portfolio. Never put all your eggs in one basket. You can diversify your portfolio based on the risk factor and the potential returns. Diversify your investments among traditional savings, gold, real estate, equity and debt mutual funds and so on.

You can use asset allocation to decide how much money to allocate to which investment avenue. For a person in their 30s, it could be 30% in traditional savings and deposits, 30% in debt mutual funds, 30% in equity mutual funds, and 10% in gold.

Overall, the decision to invest Rs. 10 lakh is a big one, so it’s wise to be cautious. Remember to deduct an emergency fund from the amount that you invest. It’s best to have an emergency fund of expenses for the next six months, and the rest can be invested without worry.