Invest a lump sum. Here's how.

She can choose a Monthly Income Plan of a mutual fund that has maximum of 30% in equity (stocks). Half of her money can go in this option. 

The rest can be put in a post office Monthly Income Scheme. This is a regular fixed deposit which gives monthly returns.  

So, when you take both the investments into account, her effective equity exposure (total investments in stocks) would be 15%. This will give her some growth in her money. 

Mediclaim can be expensive at her age. Perhaps her children can provide her cover if their employers permit inclusion of parents in their Mediclaim policies. Several companies do so. 

The post office MIS will give her some liquidity. If she does not need more than that on a monthly basis, she must allow the mutual fund MIP to accumulate, choosing the growth option. To understand the difference between growth and dividend, read The best mutual fund scheme for you.

Our business is in Oman. My dad passed away recently and we had to return to India.

We have two homes in Mumbai and plan to sell one.

How should we invest the money? I plan to start working and not study. My mom will manage the money.

- Pinank Sampat

You must build your life the way your father would have done, if he were around. 

Do not compromise on your education. It is an investment that will stand by you all your life. If you begin to work, you may find it a good choice now, but you will find that you are unable to move up the ladder after some time without the necessary expertise. 

If you have a business to run, see if your mother can manage it until you complete your studies.

Consider working right away only as a last option.

When you sell a home, you will make a long-term capital gain which will be taxed. To understand capital gain, read All about capital gains. To avoid tax, you will have to invest that money in bonds of NABARD, NHAI and the like. Check with a tax consultant.

The interest from this investment should take care of a good part of your regular expenses. You should make an assessment of how much you need to run your household and fund your education, and invest that much in income generating avenues, like the post office Monthly Income Scheme, mutual fund Monthly Income Plans and the like. See the answer I have given above to know what I am referring to.

The remaining money should be invested for the long term, in the interest of both you and your mother. 

Consider equity and hybrid mutual funds. Equity funds invest in stocks. Hybrid mutual funds, also known as balanced funds, invest partly in stocks and partly in fixed income investments. Read 3 balanced funds to consider.

Do not buy insurance at this stage, as it would not help either of you immediately. You need to focus on securing your current income, not your future one. 

Many times, a lump sum money tends to distort our view of the future. Tell yourselves that the money should generate adequate income for another 10 years at least (before you are well settled), and continue to be preserved to support your mother for the rest of her life.

Uma Shashikant is a well-known Knowledge Management Consultant.