“I have R100 000 I want to invest. The only debt I have is vehicles and school fees. Where should I invest my money?” writes Simon.

Maya replies: Where to invest depends on your personal circumstances and it is always a good idea to get good financial advice. There are however four questions to ask when you have a lump sum to invest:

Do I have debt?

If you have short-term debt it makes no sense to invest in a fund returning 10% when your debt is costing you 30% a year.

Do I have emergency funds?

It is important to have emergency funds easily accessible for those unexpected life events that you would normally have to borrow money to pay for. You need to have an emergency fund in an easy-to-access investment with no costs, like a money market fund.

Do I have enough for retirement?

Most South Africans are under-funded for retirement and a lump sum could boost your retirement savings. It is also a good idea to have what is know as “discretionary funds” at retirement – in other words money that does not have to comply with pension fund rules and provides some flexibility in retirement. For retirement savings you could invest in a unit trust that meets sound retirement investment principles. These are usually labeled as Regulation 28 Funds and usually include balanced unit trust funds.

Do I have savings for my children’s education?

With education costs rising, few parents can afford to pay for secondary and tertiary education in full from their monthly income. If you have five years or more to go before you need the money you could invest in a balanced unit trust fund. If you need the money in the next two years then a low risk income fund or the RSA Retail Savings bond would be good options.