Lately, there’s been a lot of advice about avoiding fixed-income options like fixed deposits and investing everything in markets or mutual funds. Mathematically, this makes sense—fixed deposits barely keep up with inflation in Tier 1 cities and won’t help you grow wealth. But there’s more to this than just numbers. Let’s talk about risk appetite.

Not everyone earns the same way or has the same financial cushion. For example, someone in tech with a generous RSU grant may have a much larger corpus to invest compared to someone in more traditional core industry, saving diligently from monthly salaries and yearly bonuses.

❗ During a recent weekend mentoring session on financial planning, one of my mentees shared his predicament. He had invested most of his savings into mutual funds at the end of September when the BSE was around 85,000. Today, it’s hovering around 77,000—a 10,000-point drop. His mutual funds are now in the red, and he’s worried. He has upcoming financial commitments in a few months and might have to cash out at a loss if the market doesn’t rebound.

This is a real problem many investors face when they put all their savings into the market without considering timelines for their financial needs. A sudden dip in the market can force you to sell at a loss or risk defaulting on important payouts.

🟢 Here’s the takeaway: balancing your portfolio is key. Protect your hard-earned money while planning for growth. Have clear personal milestones and understand how to reach them at your own pace.

And most importantly, don’t put your financial planning entirely into someone else’s hands. Learn finance, know your needs, and invest accordingly.

PS: I still have my emergency fund of my corpus in fixed income instruments. This is around 10% of my portfolio. I know that I might not be creating significant wealth from this 10%, but I know that it will come in handy when I need money urgently. Again, this is a % that I am comfortable with and not a benchmark.