Should you save or invest? Really it’s not an either-or, because saving is a type of investing and the words are sometimes used to mean the same thing. However, when people talk about investments they usually mean non-cash products such as equities or bonds. Broadly, when you invest (as opposed to saving) you consciously take a higher risk with your money, on the basis that this could deliver higher returns over a period of time.

Planning your investments

To make the most of investing, you’ll need to have an investments plan. You should build this plan around your life goals. For example, if you want to obtain a regular flow of income from your investments, you will take a very different approach from someone who wants a large lump sum of money at a certain point in the future. You must also factor in your attitude to risk (which should vary according to your stage of life; people nearer the start of their career can usually afford a higher risk exposure than those approaching retirement).

An independent financial adviser can help you create an investments plan by considering your investable assets, your current income and outgoings, and what you want to achieve in life. In this way, you’ll know that there’s a good practical reason behind all of your investment decisions. Your adviser can also help you source the best products for you from across the whole of the market. Find an IFA here.

Some questions to ask a financial adviser:

  • How often should I review my investments?
  • How do I work out my attitude to risk, and how should this affect my decisions?
  • How much of my assets should be in savings and how much in investments?