Following is the type of investments that one should make

1. Short-term investments - Investments that generates income that you would need in the next 1–2 years. e.g. Downpayment for your car

2. Long-term investments - Investments that generates income for your future goals. Such goals should have a tenure of > 5 years. e.g. Buying a house

3. Basic contingency fund - It is a liquid fund that should have an amount equal to your 6 months of basic monthly expenses. e.g. will come handy in case of a medical emergency or you are out of a job

4. Insurance - If you are the only earning member of your family, then it’s imperative to buy insurance. Also, you should buy insurance for your healthcare needs.

P.S. I have been writing on Personal Finance 101. Do I have skin in the game? I am 27 years old now. When I first started my career, I didn’t save much but I saved. I didn’t follow any disciplined approach in saving and investment. Then I founded a startup and bootstrapped with my money. After a year and a half, we had to shut down the startup. I was totally broke staring at a very serious debt. I decided to crawl back from this rabbit hole with all energy that I could muster. After 2 years, I am financially independent. I am trying to compile my financial learning in the recent years.