Money | How to invest your money wisely

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Investing your cash, no matter the amount, can be fruitful if everything works out. Knowing what to do, and what to avoid, is key.

Investing is a high-risk game that no one wants to lose. While the stakes are high, so is the possibility of reaping good returns. The difference is knowing what to invest in, and when.

Investing your cash may be appear to be a complicated process but it need not be if you are armed with the right knowledge and know how.

When starting out, most experts advise people not to invest in individual stocks, such as one single company. If that operator has a bad quarter or goes bankrupt, you can lose all of your cash overnight. However, you should be aware that all markets endure volatility at some stage. Stocks, for example, can be exceptionally volatile. If you are afraid of such market fluctuations and risks, perhaps stay away from stocks.

For others, such as Warren Buffett, buying stock when the market declines is a great tactic. However, before you jump into such markets, you should seek professional advice on when you should make the right move, and in what stock.

Never invest in something you do not understand. If you cannot explain what you are investing in to someone else, then you clearly do not understand. Always do research and talk to those who are informed about any area that you are considering parking your cash in.

If you plan to put a certain proportion of your monthly income into investments, set out and budget that amount. Set up an automatic deposit into your investment account so you have a set discipline of spending and saving, while this also gives you the ability to stop the transaction when you want to.

Many investment products carry an annual management fee. The lower the fee, the more money for you.

Happy investing!