Investable surplus

Investable surplus is the portion of income or wealth that is actually free to put into investments, after setting aside an emergency fund, near-term goals and committed monthly expenses. It is usually a smaller number than total savings, since not every saved rupee is available to invest right away.

Investment decisions should be sized against this number rather than against total Net Worth or total income. Investing money already earmarked for next year's rent or a pending EMI defeats the purpose of having set it aside.