It’s important to me to have cash stashed away in some savings accounts. But to achieve my financial goals, I feel I need to have the majority of my capital invested in UK shares, and with a bias towards FTSE 100 stocks.

I like to hold a portion of my wealth in a Cash ISA, and a handful of other accounts. Partly this is in case I need money for an emergency, or because I need somewhere to store cash before a large purchase.

It’s also because holding cash fits my desired risk and reward profile. The returns I can expect to make with a savings account are lower than stocks. But I know the money sitting in my Cash ISA will still be there five, 10, or 30 years from now.

Here’s my plan

The same can’t be said for my Stocks and Shares ISA. Equity markets go up as well as down, and I know I can lose money investing in a company if it experiences serious trading problems or goes bust entirely.

But as I mention, most of my money is invested in UK and US shares. I’ve achieved this through direct share investment, and allocating capital through some managed funds and exchange-traded funds (ETFs).

This is because I don’t think I’ll make a healthy passive income in retirement with just a savings account. I need to make a superior return by taking a bigger risk with my money.

Past performance is not a guarantee that my decision will prove the right one. But the FTSE 100’s strong returns over many decades suggests my strategy will pay off handsomely.

A £2,219 passive income

Let’s say I ploughed £20,000 in a FTSE 100 fund, and added an extra £300 a month to increase my holdings.

After 30 years I could — based on the Footsie’s long-term average annual return of 8% — expect to have made an excellent £665,822. This would then give me a £2,219 monthly income, based on drawing down 4% of this amount per annum.

Let’s say I put the same amount into a 4%-yielding Cash ISA instead. We’ll also assume that interest rates remain the same over that 30-year period (an unlikely situation, in my opinion).

At the end, I’ll have made a disappointing £274,485 over those three decades. This in turn would provide a monthly passive income of just £915.

A FTSE 100 stock to consider

So what sort of shares would I buy to hit this target? One good idea could be to buy FTSE 100 value stocks like Coca-Cola HBC (LSE:CCH).

The soft drinks bottler trades on a forward price-to-earnings growth (PEG) ratio of 0.6. Any reading below one indicates that a stock is undervalued.

The theory is that value shares could provide especially high returns as the market corrects prices over time. In the case of Coca-Cola HBC, I expect soaring emerging marketssales of its popular drinks to help its share price charge higher over time.

I also like this Footsie stock because products like Coke, Sprite, and Fanta remain well bought at all points of the economic cycle. This, in turn, should help my portfolio remain stable even during economic downturns.