The primary objective of personal finance investment is to create assured corpus for various short-term and long-term life goals like maintaining basic need & health, children’s education & marriage, purchasing a house or car, and financial free retirement.
These individual corpus must be acquired at the right time with the right sum of money that is inflation adjusted.
(For example if one need to plan a house after 10 yrs and your bank 10 yr recurring deposit is giving you an assured return of 6%. while housing inflation is at 8% than even getting the assured return one will fail in his investment objective. So the investor for his goal should opt for an investment vehicle like mutual funds that can give him a return of 9 to 10 % minimum.)
Investor should also focus on diversifying his contribution to insure the corpus to be acquired and manage the unexpected risk associated with any asset class.
Your financial plan should therefore give a minimum assurance of the important goals mentioned above. Beyond the contribution for these achievement one may take their calculative risk that may earn them even better returns but also assuring that the above goals are not effected at any point of time. (Coming back to the same example as above, after an assurance of the housing goal by investing in mf with a return of 9 to 10 % one might now take more risk by investing in direct equities or might even invest in 6% fds depending upon individual choice or risk appetite)