With the cost of living rising across the UK, more people are starting to look at what investing is, and how they can make their money work for them. However, investing is a complex endeavour that comes with some high risk, so it’s important that anyone who invests in the financial markets understands where their money is going, and the risks involved. In this guide, we’ll be discussing what investing is, the different types of investing, and our top tips to help you keep your money safe.

What Is Investing?

Investing is the practice of putting your money into something that has the potential to give you a higher amount back. Often, this means buying shares, small parts of a company’s capital, and then holding them to sell later. It can also mean buying property that you can renovate or hold until the value is higher, before renting for monthly income or selling for profit. The combination of ‘assets’ you have is called an investment portfolio, and it is with this that you can make your money work for you by building wealth through a series of calculated financial decisions.

What Are The Different Types Of Investing?

Before you get started as an investor, it’s important to understand the different types of investing that you can participate in. While there are a huge number of ways that you can invest your money, the most popular ones include:

  • Stocks and Shares:

Investing in stocks allows you to diversify your portfolio by placing your money into a range of different corporations. It involves buying a share in a company, and waiting for the performance of that company to drive the share price up, so it’s important to invest in businesses you believe in.

  • Retirement Investing:

Retirement investing is a long-term investment strategy that focusses on building your retirement pot through strategic financial choices. There are plenty of retirement investing options that you can choose from, but typically they include putting a portion of your retirement pot onto the stock market, to experience long-term returns.

  • Growth Investing:

Growth investing defines the process of individuals or companies investing directly into businesses that have the potential to increase their market share – a successful growth investor identifies the businesses who exhibit above-average market success early on, so that they can put money into the company and help it to grow, with the long-term aim of making money on their investment.  

By understanding the different types of investing, you can confidently choose the best route to go down when you start investing yourself.

Our Top Tips For Investing

  • Never invest more than you can afford to lose. 

Any investments have the potential to lose money rather than gain, so it’s important that you never invest more money than you can afford to lose if things go south.

  • Invest for long term results.

As the stock market fluctuates, share and property prices may go up or down to reflect this, so make sure that your savings goal is long term – the general unwritten rule is that you should always invest for a savings goal that is five or more years away, to enable any fluctuations to balance out with a strong average growth rate.

Investing can be difficult to understand, but while the world of investing is complex, there are a lot of ways that you can get involved without needing to be a financial analyst. By following this guide, and keeping our top tips in mind, you can make your money work for you in a way that you’re comfortable with.  

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