For the first time in months (or a year and more), I don’t owe a rupee to anyone. And now I have a new problem.
I just got debt-free last month (don’t ask what, why, and how).
A mix of MBA fees and my struggling years in entrepreneurship led me to borrow personal loans from friends and family. I’m glad I’m out of it now (well, mostly).
And that has got me to a good and better headache. For the first time after months (even years), I’m starting to see some free cash flow. Seeing my bank account not close to zero is a good feeling, for sure.
That brings me to my first world problem. What do I do with the amount, where should I put it?
Option 1:
The laziest way is, of course, to let it stay in my bank account. The cash gets me a modest 3% savings interest rate.
Poor allocation, but, I can keep checking my bank balance and heave a sigh of relief after months of anxiety over finances.
Option 02:
The second option is a slight upgrade. Put it in FD (fixed deposits) and get around 7%.
My dad would definitely approve. Even I’m tempted since this is the first set of savings, and keeping it as a runway for the future sounds prudent.
Option 03:
Stocks. Okay, I used to pick stocks after my MBA (Finance major).
But it’s been years and I’m out of touch with the market. Frankly, for the sum I have, researching and diving into stock analysis doesn’t sound like a good ROI for my time.
On the other end, the market is seeing headwinds in the last few months, so maybe index funds sound good.
Option 04:
If stocks are an option, I can go for investing in my own business.
After all, stocks are investing in other businesses, so why not invest in mine?
Except I don’t have a working business model or a clear plan for what to do. Well, I do have some plans, but I’m hesitant to put my first batch of savings there. I did it last time, and soon, I was broke.
Where’s it going then
Well, Option 2 (FD) is objectively better than Option 1 (Cash savings).
And if I’m going the risky investment route, I wanna bet on myself first before on others. So Option 4 (Own business venture) over Option 3 (Stocks).
The choice is now between Option 2 and Option 4. Do I wanna risk it all or do I pay heed to my dad’s words?
I guess I want to build an emergency fund first. So, for the next few months, I’ll go with Option 2 – FD. Once I’ve some runway, I’ll go to Option 04—betting on myself.
PS. I was obsessing over what to do and wasn’t really sure where to go. By writing it down here, I came to the decision. I guess writing it down really helps your thought process!
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