A 34-year-old has Rs 1 crore after tax from selling ESOPs, needs Rs 30 lakh for a home down payment in two years, has no emergency fund and a steady salary. How would you invest the money?

Split the money by when it is needed, then invest each part for its own horizon. Put Rs 7.5 lakh, six months of spending, in a liquid fund. Put Rs 30 lakh for the flat in low-volatility debt such as money market funds and deposits. Invest the remaining Rs 62.5 lakh for the long term, about three quarters in diversified equity funds, moved in over six months.

A household sorts its cash without thinking: rent money stays in the bank, holiday savings go somewhere safe, and only money nobody will touch for years goes into anything that swings. The first job is to give every rupee a date, because the date decides the risk that rupee can carry, not the client's age or mood. Nikhil's Rs 1 crore has three dates: any day for emergencies, two years for the flat, and ten years or more for the rest. His claim to be comfortable with risk after a good run is worth noting and testing, not taking as the plan.

Two years is too short for equity to reliably recover from a fall. If Rs 30 lakh sat in equity and markets fell 30% the year he bought, he would have Rs 21 lakh and a Rs 9 lakh gap to fill, or he would delay the purchase. Low-volatility debt, such as money market funds, short-term debt funds or bank deposits laddered to the purchase date, earns less but arrives on time. That is the whole job of this bucket. Tax on debt fund gains differs from equity, so compare the after-tax yield with a deposit; confirm the current rules before choosing.

About three quarters of the Rs 62.5 lakh, Rs 46.9 lakh, goes to diversified equity, such as a broad index fund and a flexi cap fund, and the rest, Rs 15.6 lakh, to debt funds that can be used to rebalance after a fall. Moving the equity in over six months through a systematic transfer planAn instruction that moves a fixed amount from one fund to another each week or month, so a lump sum enters equity gradually., about Rs 7.8 lakh a month, limits the regret of investing everything a week before a fall. Averaging in does not raise expected return; it makes the plan easier to stick with, which matters more for a first-time investor of this size.

Two points. First, his salary and his future ESOPs already tie him to one company, so the portfolio should hold none of his employer's shares, even though he knows the business. His job is already a large, undiversified bet on one company; the investments should diversify it, not double it. Second, check life and health insurance before investing: a flat purchase with a loan makes his family dependent on his income. The overall equity share of about 47% looks low for a 34-year-old, and that is the point: 37.5% of the money already has a job within two years.