Investing your money into the market is no child’s play, since there is always an element of risk attached to it. It’s simple logic! The more you're prepared to take a gamble, the better the returns will usually be.

Before investing, it’s important to ask yourself few questions like: Am I prepared to take the risk of investing? If not, the interest earned on your savings account would be ideal for you. Secondly, don't invest if you can’t live without it, or if it might change your life if you lose it. Thirdly, remember that investment is a long-term plan. For instance, if the stock market crashes, you might have to wait for some time (six months or more at times) before you get your money back or make a profit.

Stocks and Shares - By buying shares you’re actually giving companies your money to help them run their business. In return, if they’re successful and their share price goes up, you’ll benefit from the rise in value. Equally, if the company's value falls, you'll be losing money.

Unit Trusts and Investment Trusts - Unlike shares, Unit Trust puts your money into several companies at once. This way, you're spreading your risk across the fortunes of many companies, whereby some might lose money, but some will rise in value. Also, a Trust contains not just your money, but others also, and this larger pot of cash usually gets the Trust a better deal. Most important, your funds are managed after by a Fund Manager whose job day-in and day-out is to look for the best place to park your funds.

Tracker Funds - They invest widely in top companies and are called trackers because they (usually) track the FTSE Index (which is an indicator of how well the stock market is doing). Basically, they are a logical extension of trusts. So, if the FTSE goes up then the value of your investment goes up and vice versa. Trackers are just an easy way to tell what's going on with your cash.

Bonds - Bonds are a loan given to the government for a set length of time, usually between three months and five years. But, because there's no risk, they don't pay back particularly well.

Property – As prices of property is sky-rocketing in many areas, buying and selling property can be very lucrative. However, a lot of money is required to start with, and if the value of your property falls, you stand to lose a large amount of money.

All said and done, it’s important that you don’t jump into investment without getting an advice from Independent Financial Adviser. For stocks and shares, you need to know about the way stockbrokers charge. Basically, there are two types - discretionary and execution-only. Discretionary is where a broker will take your money and invest it as they see fit. This cost more than execution-only, where a broker will simply put your cash into the companies you ask them to. Finally, don't forget that you do have to pay tax on your profits from investing. The government offers some investment schemes which are tax-free.

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